Convenience Store Decisions

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(12/01/2008)


July 2008 The Wild Ride Continues By John Lofstock As if industry operators didn’t have enough to worry about, ExxonMobil dealers were greeted with the news that the Irving, Texas oil giant decided to exit direct-store operations by divesting 825 company-owned and -operated stations as well as 1,400 stations leased to dealers. This decision thrust those dealers into an anxious state of limbo, an industry purgatory, if you will. In this month’s cover story I was particularly taken aback by the range of emotions marketers displayed. Some were brimming with an excitement they could barely contain over the prospect of doubling, even tripling the size of their business. For others, it was sheer misery. Many operators I spoke to would only do so on the condition it be off the record. That was too bad for me because that’s where the really juicy stuff came out. Some of it was even printable. But the ones who spoke on the record were honest and sincere. Specifically, I’m talking about Levent Sertbas, president of Sertbas Inc. in Paramus, N.J., and Tommy Todisco, president of Todisco Inc. in Boston. After speaking with these two gentlemen—and never has a word so aptly described two individuals—I came away with a genuine concern for their operations. Like many of our readers, they have poured their heart and soul into their family businesses and now they face an uncertain future that seems to dominate their every waking thought. Why wouldn’t it? Of course as an outsider (whose father just happened to be a single-store Exxon dealer who would be in the same situation as these two had he not retired, by the way), it’s easy for me to be objective and see the upside in their situation. Things could get better, much better, in fact. Only time will tell. I know this much for sure: If the measure of an operator’s character determines his destiny, I know two marketers who are poised to achieve greatness. Food for Thought In this month’s foodservice feature, Associate Editor Shawn Foucher examines the healthy food trend that is rapidly spreading to convenience stores. "Think about the offering in convenience stores today," said Todd Hale, senior vice president of consumer and shopper insights for The Nielsen Co. "It’s obviously not a place you go to get organics and natural." Done right, however, such a store could fill a critical gap in the convenience environment. "Moving into health and wellness and areas of sustainability is potentially a smart thing to do," Hale said. "But you have to be careful that you don’t turn off the shoppers that drive most of your sales." One c-store successfully promoting a healthy and organic lineup is The Green Spot Market and Fuels in Dallas. Foucher explains that The Green Spot’s packaged foods are absent of unhealthy additives, and even the soft drinks themselves aren’t really soft drinks, but better-for-you alternatives made by Blue Sky, who manufactures sodas free of high-fructose corn syrup, caffeine and additives. Scanning is a normal part of convenience store operations these days, but one of the messages to come out of the NACSTech show a few months ago was that operators are using that data effectively to market their stores and increase the ticket ring. Associate Editor Howard Riell reports that it’s typically only among the larger chains where hard data analysis is taking place, and those that are doing it are reaping the reward. Operators sometimes err in thinking that market basket analysis can be their "be all and end all," said John Russo, general manager for RedPrairie Performance Management. "They may have an expectation like, ‘As soon as I know that then that’s half the battle.’ But actually coming up with a promotion that is interesting to that customer is something you have to work on." One fairly counter-intuitive connection Red Prairie turned up for one client was the fact that coffee was its top-selling beverage when consumers bought pizza at dinnertime. And I thought I was the only one who did that.