The Kotler Effect

With more than 600 stores now under its watch, GPM Investments lets the industry know it’s here to stay.

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Meanwhile, several GPM programs will likely get a trial in some of the newly acquired stores, including:

  • A decade-old fried-chicken program for which GPM’s Fas Mart stores are known.
  • The recently rolled out Fas Cash debit-card program, which provides consumers with discounts at the pump.
  • And perhaps most notoriously, a willingness to merchandise atypical products, such as hand sanitizer and hand wipes, in high-traffic areas.

The wipes “have a cult following,” Giacobone says.

“We have days when we sell close to 9,000 packages a day. Last year, we sold close to 500,000 packages in just a few months,” Kotler says. “We bring things to the stores that people need day to day, but maybe they’re not something you expect from a convenience store. We’re looking for things that make sense and are very valuable.”

Meanwhile, Fas Mart is testing a new foodservice program—Red’s—as an update to its Fas Lane Café, a concept that’s changed little over the past decade.

“The Fas Lane Café menu was built on fried chicken. And it’s super-high-quality fried chicken. It’s fresh, never frozen. It’s all hand-battered. It’s a great product,” says Giacobone. “But it’s fried chicken; if I don’t like fried chicken or I don’t want to eat fried chicken every day, I want to be able to go in the store and find a healthy option, and that’s the change with Red’s.”

Fully operational in only one Fas Mart store as this story went to press, Red’s adds to the Fas Lane Café menu with salads, sandwiches and yogurt parfaits made on site, as well as paninis made to order.

“It’s got a healthier menu in addition to the fried chicken, which we are very well-known for. It’s the old menu plus some new items, with a facelift,” Giacobone says.
Developed by Reilly, whose c-store experience includes stints at Sheetz and MAPCO, Red’s aims to keep the current clientele happy while adding something for new customers.

“We couldn’t get rid of the chicken,” he says. “There are people who come in three or four times a week for the chicken.” In fact, as CSP toured stores with Reilly, more than one customer—without any prompting—shared his love of Fas Mart chicken.

“But we needed something else. We didn’t have a lot of grab-and-go food; you can’t really eat fried chicken while you’re driving,” Reilly says. “We’re in markets where we compete with Wawa and Sheetz and a lot of c-stores with great foodservice programs. So we needed to have something for that other end of the spectrum: fresh-made salads, fresh fruit, paninis. …

“Food is our future. We’ve got to make it work.”

Various GPM stores also are homes to Subway, Taco Bell, Quiznos, Dairy Queen and Blimpie franchises, depending on the market.

Along with the Red’s rebranding and improvements comes an update to GPM’s beverage program. While maintaining its Perfect Harvest Coffee Co. brand—supplied through Kraft—GPM brought new, updated equipment to all its stores and redesigned its cups and signage with a soft-purple logo meant to convey a message of freshness. The chain has also put Coca-Cola’s Freestyle fountain machines in several stores, drawing a lot of consumer attention.

These are things that longtime employees acknowledge could have been done sooner.

“When Arie came in, things really started happening,” says Welsh.

With the Red’s foodservice program in operation at Fas Mart’s Montpelier, Va., store only a couple of weeks, Reilly says the site is performing “extremely well,” with foodservice sales up 20%.

Risk vs. Reward

There is one instrument of growth that you won’t see used much by GPM Investments: new-build construction.

“I’m not a big new-construction guy,” Kotler admits. “I believe you’re buying cash flow, at the end of the day. And building a store can cost you anywhere from $2 million to $8 million. … With $2 million to $8 million, I can buy a company.”

He also cites the time and risk that comes with new construction: “Every time you build a store, it’s like a surgery. Even if everybody tells you it’s a simple procedure and you’re 100% safe, there always is a risk. And that’s not a risk that we want to take right now.”

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