Celebrating Our Resilience

By  Hank Armour, President and CEO

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A mid-size operator in the Mid-Atlantic was busy on a recent day installing new overhead track lighting, open-air coolers and an expanded foodservice menu to meet allay-part occasions.

Less than 300 miles away, a one-store merchant was celebrating the grand opening of his nearly 2,500-square-footsore, giving away freshly brewed coffee and introducing himself to customers.

These stories of investment, customer engagement and optimism are playing out across our industry of more than 148,000 stores along the rural stretches of the Appalachians through the urban centers of Philly, Chicago and L.A. to the countless rural outposts and suburban sprawls.

The Great Recession of 2009 is overhand guess what? We’re still around. Not only are we still kicking but we’re also running, celebrating a record year on many fronts as described in the feature by editor Samantha Oller (p. 18).

We couldn’t agree more with John Zikias’ comments at the SOI Summit:“While we’ve gone through tough and trying times, we’ve survived and many thrived and grew their business in tough times.”

Simply put, our state of the industry shows the convenience community playing an even greater role in meeting and exceeding the needs of the carpooling mother, the construction father, the midday snacker, the night-shift worker. We have continued to move the flywheel on foodservice, which still remains our biggest opportunity and, admittedly, the one category with the widest gap between-quartile performers and the res

And we have won an important round in helping you and your customer by making sure that Congress passed debit-card reform. However, that not-so-insignificant victory must be understood within a broader context: Credit-card fees cost our industry more than $11 billion in 2011. That’s more than 50% above our entire industry’s pretax profit of $7 billion. So where are we going? Where are our next opportunities?

  • Technology. There is little doubt that how we interface with our consumer is changing rapidly. It wasn’t long ago that your cell phone was able to receive emails. Today’s smart phones make that predecessor archaic. Today’s gadgets are the purchasing devices of tomorrow—and we mean tomorrow, literally. iPhones, Androids, new Microsoft programs and so on are turning today’s phones into mobile power. Consumers compare prices from their smart phones, take pictures and footage of the good and the bad, tap into loyalty programs and even Skype on their 4-inch device. We’re going to have to adapt our stores, from pricing (QR codes) to plan-ogramming, to win over the increasingly growing tech-savvy customer.
  • Foodservice. We know we’ve been talking about foodservice for years. But the share of stomach remains our greatest opportunity and most vexing challenge. Some of our industry’s best companies, from fewer than 10-store operations tour most prominent chains, are investing in fresh prepared meals, smoothies and other high-margin, high-demand items to further expand their customer appeal, without alienating our industry’s historic core consumer.
  • Environmental Responsibility.We’re not talking about the high-handed government-in-your-office red tape. We’re talk about smart business. Companies are saving tens of thousands to hundreds of thousands of dollars by adopting greener practices in lighting, utilities, building with recycled construction materials, and establishing more efficient supply-chain logistics.
  • Fuel. This is a complex area, but it is clear that Americans are opting for more fuel-efficient vehicles. There’s also a niche population embracing electric or hybrid cars. We will continue to monitor closely American energy policy, global markets and domestic manufacturing to help guide our industry to the forecourt of tomorrow.
  • Tobacco. Whoever tells you that cigarettes are dead isn’t living in reality. At the same time, this is not 1995. Sales of cigarette units are declining. At the sometime, the world of other tobacco products(OTP) is not only growing financially but is also expanding into new smokeless frontiers, from snus to e-cigarettes and a nascent population of oral products. Tobacco is an essential part of our business. What’s important is to understand how it’s evolving and to adjust your store sets to optimize this shift.

In short, do what you do best: Know your consumer, know your market, know when to change and when to hold. Wishing you a prosperous 2012 and beyond. 

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