Simon Says: Refine Your Retail

Don Glenn and Jake Leatherman had just wrapped up three store visits to Atlas Oil customers in southern Michigan when their conversation turned from coffee to a slightly more slippery substance: petroleum.

“Four dollars,” said Glenn, director of retail sales at Taylor, Mich.-based fuel distributor Atlas. “That’s where everybody’s world changed.”

Leatherman, Atlas’ senior retail district manager, chuckled remembering the fuel market as it was just five years ago; retailers and consumers would bristle at the slightest fluctuation in price.

“If there was a two-cent shift, people would lose their minds,” Leatherman recalled. “Now if it shifts two to five cents in a day, they’re like, ‘So what?’”

A few years ago, folks had guessed that $2-per-gallon pump prices would spur Americans to alter their driving habits. “Not a chance,” Glenn said. “Then everyone thought it was $3, but no, the tipping point was $4.”

Pump prices in the latter half of 2008 dropped from $4 per gallon to $2—in some cases, $1.50 or less—but stark realities emerged amid all the volatility. For starters, the relentless fuel pumping of yesteryear flat-lined in 2008. It turns out that $4 fuel was indeed the proverbial tipping point.

Those same consumers who cut their fuel consumption know, too, that today’s low fuel prices are going to rise sooner or later, so they aren’t likely to go fuel-binging any time soon.

Like anyone else in the convenience and petroleum industry, Atlas recognizes that convenience store retailers have to tighten up their in-store programs and push brand marketing if they want to survive any volatility at the pump, whether its shriveled margins, high credit card fees or customers reluctant to splurge on chicken tenders and chocolate bars.  

“I can teach anyone to sell gas,” Leatherman said. “It’s the retail side that they have to master—the profit has to be inside the store.”

Shifting Gears

Atlas Oil is foremost a fuel distribution company. CEO Sam Simon started it that way in 1985 and it’ll probably stay that way for the foreseeable future.

The company delivers upwards of 500 million gallons of fuel to customers in 17 states, with plans to add another seven states to its roster this year. It fills more than 13,000 orders every month, including commercial accounts with more than two dozen Fortune 500 companies and upwards of 350 convenience stores, about 50 of which are owned and operated directly by Atlas.

Spend one afternoon with founder and CEO Sam Simon, though, and you’ll quickly find that his time isn’t squandered ruminating on price swings in the fuel market. He invests most of his time on people, employees and customers. 

Sure, you can get him talking about fuel—it is his business, after all—but he doesn’t act as if he’s a sage tapped into the futures market. The company is not afraid to change the way it does business. For example, Atlas had long-term contracts with oil refiners in the past, but three or four years ago resorted to short-term product supply agreements.

“When (low) fuel prices happen, we’re happy,” Simon said. “When the prices are up, we’re less happy. I don’t like when the prices are high. It wasn’t good for anybody—the customers, the industry or the employees.”

The people aspect of the business is where Simon excels, say those who know him best.

“Sam Simon is a man of great integrity and high energy,” said Toni Stafford, Atlas’ vice president of human resources. “He cares about his people and his company. It filters all the way down through the company—it excites.”

It isn’t puffery, either, if awards are testament. Last fall, the Detroit Free Press listed the company as the fourth-best place to work among southeast Michigan’s mid-sized companies; Google was first in the category.

In truth, you can’t understand Atlas’ approach to fuel distribution, convenience retailing, real estate or any of its operations without taking a peak under the hood of a well-oiled machine Simon calls the “corporate culture,” and a little motor he calls “core values.”

A People Company

“I’m a big believer that you have to hire the best people,” Simon said. “We like people who are open and honest and hungry. They say people are your biggest asset. I say the right people are your biggest asset.”

Simon’s business acumen took root when he was about 13 years old, working as a clerk at his dad’s Shell station in metropolitan Detroit. He wiped windshields, checked tire pressure, capped off oil and filled tanks for customers who expected thorough service.

“What did you have then? All you had was service,” Simon said. “I’d make $50 or $75 on tips in a day. It was bigger than my day’s wages. It was all about service—they’d wait in line just to come see us because we offered a service. Wherever you go, people are willing to pay for service.”

He took those lessons and launched his own petroleum distribution company in 1985, using a credit card to purchase his first tank wagon and the Atlas Oil Company name. His penchant for superior service and his keen insight has been a driving force in creating the Atlas of today, a $1 billion outfit employing more than 300.

But how to get those employees to latch on to his valued traits—service and pride, integrity and ingenuity and a hunger for growth? For one, build them into the company’s business philosophy. Dubbed its “core values,” the six concepts are encapsulated by words and catch phrases like passion, pride and image, customer focus, solution-driven, “grow or go” and “do the right thing.”

Simon said he can’t always tell if an employee is the ilk he’s seeking, but added, “We know when he or she is not. Honesty is very important, as is treating customers and employees with utmost respect. It’s a culture that we spend a lot of hours and time working on.”

Simon figures he spends about 50% of his time on employees, whether it’s teaching a monthly class on corporate culture or making calls to every employee on the anniversary of their hire.

“Being a good CEO is not just wearing a tie and walking around looking pretty,” Simon said. “A CEO has to deliver and execute, and people have to believe in him. They have to believe in the culture and leadership and trust you. I tell them I don’t just want your brains in it, I want your heart in it. When you have someone’s heart, they’ll do a lot. They’ll care.”

Which, for instance, leads to one of those core values: passion.

“That’s an odd word to use in a workplace,” said Stafford, the human resources head. “For us it means high-energy willingness to do whatever it takes to get the job done. There has to be a competitive spirit in the person in a good way. What I’ve observed is people who are successful here inherently have these core values.”

Atlas has a hatful of programs that reward employees for strong performance, such as “Ideas Make Cents,” where workers can earn money for suggesting solutions that improve operations in any department. Others benefits include flex time for work schedules, birthdays off, tuition reimbursement, and free coffee, cappuccino, popcorn and soft drinks on the job.

This entire concept of core values and a solid corporate culture fosters a strong work ethic in Atlas’ ranks, and it can’t be overlooked. It spills into every aspect of the company’s operations, from the folks who handle customer orders, to the tank wagon drivers, right down to the retail division itself.

Retail Focus

His preferred method for handling retail operations, Simon said, has historically been to acquire gas stations and then hand them off to dealers who, in turn, agree to buy their fuel from Atlas. But in an increasingly competitive market, it’s become critical for retailers to improve their in-store profit. If the retailer can’t survive, Atlas can’t survive. It’s that simple.

“Every store needs to be helped out,” Simon said. “Their survival is ours.”

Atlas distributes seven different brands: BP, Marathon, ConocoPhillips, Citgo, Clark, and its own brands, Fast Track and ‘WoW!. The latter of those is a proprietary brand created in 2003 to serve as tangible template of sorts so Atlas’ customers could extrapolate ready-made ideas and programs for their own operations. There are two ‘WoW! stores in Michigan.

“The ‘Wow! concept came along as a showcase,” Simon said. “But it’s not about the brand, it’s about how you manage the business—what you put into it, how you handle it. Everyone goes after the brand, but it goes beyond that. It’s all about execution and operation.”

Atlas’ Fast Track brand lets operators own their store, but have a ready-made brand in the Michigan market. The only stipulation is they have to contract with Atlas for fuel. The company also services the Clark brand because of the savings it offers retailers with unbranded gas, Glenn said.

The Marathon brand makes up a sizable portion of Atlas’ distribution. In Michigan, for example, Atlas services 119 dealers: 66 operate under the Marathon banner, 45 are Clark and eight are Fast Track.

Regardless of the brand, convenience retailing can’t exist viably without clean restrooms, friendly cashiers, well-lit facilities, well-stocked merchandise and hot coffee. Simon knew his c-store partners—some of them multi-store owners, others independents—had to understand this if they wanted to survive.

When the ‘WoW! brand launched five years ago, Simon committed to fresh coffee as a brand staple. An old pot was dumped after 20 minutes and a new batch would brew.

“Every 20 minutes we’d throw the coffee away,” he said. “It was expensive at the beginning, but after people got used to it we didn’t have to throw away as much coffee because people were drinking it. Freshness is key.”

Leatherman, Glenn and two others in the retail division head up the company’s relationships with retailers. 

Right out of the gate, Leatherman’s first questions for any retailer are: “What would your wife do if she was here? Would she shop here? Would she buy the coffee here? Would she use the restroom here?”

Atlas is one of the only fuel distributors in the Michigan market that offers retail strategies for customers. “That’s something that sets us apart from other distributors,” Glenn said. “The last few years we’ve really focused on retail, and started dealer training to help their overall business, not just their gas business.”

Eddie Osman is one of those dealers. He owns an 1,800-square-foot Marathon station in Detroit. A year ago, the Ford Motor Co. assembly plant across from his store shut its doors for good. With help from Atlas—store plans, merchandising and category management—Osman has succeeded despite the disappearance of 4,000 Ford workers.

When a convenience store was built recently near his store, Atlas paid to install LED signage to increase Osman’s brand’s visibility. 

Osman said Simon’s ability to plan long-term was evident during the Blackout of 2003, when the vast pool of gas stations throughout Detroit couldn’t buy fuel because fuel terminals were out of power. Simon had purchased a generator a year before the massive power outage, allowing his crews to deliver fuel to every customer in the region.

“I was lucky,” Simon said. “I’m a long-term player. If you plan short-term, you’re going to have problems. You can always adjust to a detour, but you still have to have a plan. One of our plans is to always look ahead.”

This unique foresight and ability to transcend dilemmas through preemptive planning and rapid-fire solutions has ensured the company’s success in a challenging economy.

“Sam is growth-minded,” Glenn said. “There’s no treading water with him. He wants you to come up with something, run it up the flagpole and see if it flies. If it does, we’ll accept it.”

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