The Rise of the Aztec Empire

San Diego State University At a Glance

San Diego State University (SDSU), founded in 1897, is the fifth-largest university in California with a student body of approximately 38,000 full- and part-time students. Its retail arm, Aztec Shops Ltd., was founded in 1932 as a not-for-profit corporation that functions primarily as an auxiliary of the university.

The corporation provides a diverse portfolio of commercial services including operation of Aztec Market convenience stores, more than 20 restaurants, the SDSU Bookstore and SDSU Dining Services on campus. Restaurant brands include Panda Express, Sbarro, Daphne’s Greek Express, Sunset Strips, Rubio’s Fresh Mexican Grill, Starbucks and Taco Bell. Proprietary dining options include the Aztec Grill, UT Grill & Market, Salad Sensations, and Vinnie’s Pizza, Pasta and Sandwiches

Average Student Age
Freshman: 18.4
Undergraduate: 22.4
Graduate: 30.1

Gender Split
Men 42.1%
Women 57.9%

Total Faculty
Full-time: 979
Part-time: 800

The Aztec Mission Statement

Aztec Shops will provide effective “Campus Store” and “Food Service” operations for the SDSU community. These services will be self supporting, sensitive and responsive to the campus community, and will be based on the principle of “value at a fair price.”

Don’t expect the San Diego State University (SDSU) Aztecs to compete for a Rose Bowl title anytime soon, or hoist a trophy following the NCAA’s college basketball finals. But if there is an award for campus retail operations SDSU is on a short list for coronation as the national champion.

The sprawling campus in the heart of San Diego has assembled a dynamic portfolio to satisfy the needs of its diverse student body—foodservice, convenience stores, book stores and student supplies.

The responsibility of meeting these needs falls on Aztec Shops Ltd., the vast not-for-profit retail entity blanketing the SDSU campus. Its dining services division is responsible for six Aztec Market convenience stores, including a flagship 3,000-square-foot store. It also operates more than 20 restaurants and other foodservice outlets on the campus, including SDSU’s meal plan program, residence hall dining programs and a host of proprietary foodservice brands.

In addition to the varied restaurant options, Aztec Shops is the recognized caterer for all events on the SDSU campus and manages the concession stands at Cox Arena, the Open Air Theater and Tony Gwynn Stadium.

And there’s more. Through its vending division, Aztec Shops handles all ATMs, vending machines and pay telephone services on the campus. Plus, the group operates SDSU’s 25,000-square-foot bookstore–one of the largest sales volume campus bookstores in the country. In short, Aztec Shops is all things to the university’s 38,000 students.

“We are not your typical retail operation,” said Rick Barber, associate director of dining services in charge of convenience stores, concessions, vending, purchasing and distribution.

College stores are unique in that they cater to a captive audience. Indeed, every student is a potential customer, said Barber, a 25-year retail veteran who spent three years at 7-Eleven prior to joining San Diego State. Just how much students enjoy the services Aztec provides is evident in the bottom line. The university’s dining services division rang up more than $15 million in sales last year, primarily over a 10-month school year.

“Our customers love having access to foodservice and convenience items at many different points on campus,” said Barber, who serves under Director of Dining Services Paul Melchior. “We work hard to execute these programs and it’s what makes us successful.”

C-Store Operations
Driving the business is what Barber enjoys most about his job, and he’d have to enjoy what he’s doing in order to commute two hours one way to work everyday, or just a little crazy. “I get that a lot,” he said with a chuckle. “When you believe in something and enjoy what you do, you don’t focus on the commute. I consider myself fortunate to be able to do this every day.”

With a quarter-century of retail experience under his belt, Barber’s merchandising experience was an ideal fit for San Diego State. His main job now is maximizing sales and margins at the six Aztec Market convenience stores. There are numerous challenges, all of which could impede progress with little more than a moment’s notice such as distribution, labor, product mix and staying ahead of the trends a transient consumer base is looking for.

“When I came on board a few years ago, I wanted the convenience stores to become an integral part of the university and mimic campus life,” Barber said. “So one of the first things we did was rebranded the stores to the school colors—black and red—and started leveraging the athletics department and the popularity of the school’s athletes.”

The stores, which are all strategically located around popular student hangouts, feature the same color scheme and large pictures of student-athletes.

“The point was to tie into the Aztec theme and create one cohesive culture,” Barber said.

Private label products, such as food items and bottled water, feature pictures of university buildings along with the Aztec logo.

“The stores were already established. We aimed to make Aztec Markets the place to be on campus, and students made the connection,” Barber said.

Keeping the connection strong is a whole other issue. Staying on top of trends requires constant interaction with student-customers, especially when a new semester begins.

“We do quite a bit of customer intercepts and surveys to find out how their needs are changing, what new products they are interested in and what else we can do to satisfy them,” Barber said. “Our goal is to accommodate the students and their daily needs, so that means stocking up on the items that help them get through the day.”

Product Mix
Service is a major emphasis at each of the stores. The main location carries more than 7,000 SKUs and has seven registers to get customers in and out in under two-and-a-half minutes, even at the busiest time of the day.

Each store is operated by a non-student manager that has some latitude to add new products as long as they are on a list of approved vendors. Managers also communicate regularly to find out what trends are emerging at each of their stores. Since prices are controlled centrally SKUs can be moved in and out fairly seamlessly.

The range of products at college stores doesn’t vary all that much from traditional c-stores. Energy drinks, bottled water, snacks and foodservice are all top sellers, but they are sprinkled around nontraditional student-needed items like Scantron sheets (machine-readable papers on which students mark answers to test questions), which are Aztec’s top in-store item, along with pencils, pens and notebooks.

“Whether it’s capturing commuters on a busy highway, or students before and after class, the process of meeting your customers’ needs is the same,” Barber said. “Our job is to find the ideal product mix and offer value.”

Providing these goods and services has its own set of challenges that Barber and his team work diligently to overcome on a daily basis. For starters, stores have limited storage space, which means frequent deliveries—several per day in fact, and that’s no easy task on heavily-populated, narrow campus roads.

“Each of our locations has to be careful not to tie up space with non-selling items. We look at turns and evaluate every item regularly. If products are not selling, we replace them with something new. Each item has to pay the rent,” Barber said. “That’s why it’s so important for us to find out specifically what customers are looking for.”

Aztec Market’s main distributor, Core-Mark, makes two deliveries per week to the campus. Beverage distributors are on campus daily.

In addition to customer intercepts, managers talk to student ambassadors to find out what they are hearing, “so we can find it and sell it at a good price,” Barber said. “Lately, healthy and organic food products have been the biggest trend.”

Another challenge is the university’s decision to go with a single beverage partner, which is Pepsi, and its family of products. SDSU switched from Coca-Cola in 2007. This is crucial because the cooler provides nearly three-quarters of Aztec Market’s top 20 SKUs.

Under the agreement, Aztec stores are only allowed to carry five additional products. Two of those brands remain constant: Red Bull and its proprietary Aztec Water.

“At first there was some concern and feedback from students, but Pepsi has a large portfolio that seems to satisfy everyone and there was no drop off in sales,” Barber said.

Food for Thought
Aside from the cooler, foodservice is a major contributor to c-store sales. National and proprietary food brands are peppered throughout the campus featuring the likes of Panda Express, Sbarro, Daphne’s Greek Express, Sunset Strips, Starbucks and Taco Bell. Proprietary dining options include the Aztec Grill, UT Grill & Market, Salad Sensations, and Vinnie’s Pizza, Pasta and Sandwiches.

The c-stores also offer freshly-prepared foods ranging from sandwiches, wraps and soups to salads, fruit cups and parfaits. Other selections include heat-and-eat and frozen items students can take back to their rooms. All of these items are made centrally at a university commissary and delivered several times a day to the stores.

Even in sunny San Diego, soup has emerged as an immensely popular item. One unit sells on average about 5,000 bowls per day.

“This came as a big surprise, but the more we emphasized soup and expanded our variety, the more sales increased,” Barber said. “It’s now one of my top SKUs.”

Because space is so tight on campus, rarely does the opportunity to expand become available. However, Aztec caught a break in 2000, when it was able to acquire the El Conquistador residence hall near the SDSU campus. Recently renamed University Towers, the facility is home to more than 560 students during the academic year.

To capitalize on its investment, Aztec opened the UT Grill and Market adjacent to the building and a 750-square-foot convenience store in the building. The c-store is just a quarter of the size of its flagship store, yet it does as much volume, Barber said.

Developing a Workforce
While it’s nice to have a matriculated population to recruit from turnover traditionally mirrors mainstream c-stores. Over the past year, however, turnover was much lower, and Barber expects it to stay low through December as the economy struggles.

“We anticipate about a third of our students to come back to work for us at the beginning of the school year,” he said. “That is one of the most difficult aspects of this job. We only have a two-week period before the semester to hire, train and get ready for the first day of school. The good news is once you get going students develop a routine and stick to it.”

Virtually all of the store managers have come up through the ranks as students before joining Aztec in a professional capacity, so they understand the challenges.

“Our staff brings a lot of pride and professionalism to the job that enables them to train and be patient with all of our employees, and I think those qualities help make our campus special,” Barber said. “In return, employees pass that good feeling onto the customers and that has helped make us the place to be on campus.”  CSD

San Diego State University At a Glance
San Diego State University (SDSU), founded in 1897, is the fifth-largest university in California with a student body of approximately 38,000 full- and part-time students. Its retail arm, Aztec Shops Ltd., was founded in 1932 as a not-for-profit corporation that functions primarily as an auxiliary of the university.

The corporation provides a diverse portfolio of commercial services including operation of Aztec Market convenience stores, more than 20 restaurants, the SDSU Bookstore and SDSU Dining Services on campus. Restaurant brands include Panda Express, Sbarro, Daphne’s Greek Express, Sunset Strips, Rubio’s Fresh Mexican Grill, Starbucks and Taco Bell. Proprietary dining options include the Aztec Grill, UT Grill & Market, Salad Sensations, and Vinnie’s Pizza, Pasta and Sandwiches

Average Student Age
Freshman: 18.4
Undergraduate: 22.4
Graduate: 30.1

Gender Split
Men 42.1%
Women 57.9%

Total Faculty
Full-time: 979
Part-time: 800

css.php