CST Brands: Turning a Corner

As CEO of Valero spinoff, Bowers brings fresh energy to new retail brand

By
Angel Abcede, Senior Editor/Content Development Coordinator

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Another challenge is luring patrons who might not otherwise be drawn to just another roller-grill menu, while simultaneously not alienating core customers. That’s where there may be opportunities unique to CST. Patrons are already loyal to its eclectic tastes, including whoopie pies and kolaches, so possible opportunity exists in healthy or energizing food options, he says.

Either way, quality is important, Poye says. “How we offer food in a c-store has to be as good as any QSR, fast casual … or any of our great [c-store] competitors,” he says. “Our food needs to be that good if we are to survive in this business.”

Equally important, says Adams, is to view food not from traditional day-parts. “We get so tied up in food being a complete meal,” he says. “People are now eating six times a day, eating when they can and in small bits. That’s what we’re good at.”

Going forward, according to Adams, execution will be key. The way kitchens are laid out, what ingredient sits where, what’s delivered precooked and how meals are prepared—these are all things that will make or break a foodservice program.

“We’re so bullish on the 30 [new-to-the-industry] stores we’re planning, because we know the percentage of food we can sell will be exponentially better than what we have in existing stores,” Adams says. “In a new store, consumers will give you permission to sell food.”

The Fate of Fuel

In an about-face of his enthusiasm over food, Adams addresses the importance of taking fuel out of that particular equation, getting the pump traffic and parking obstacles out of the way of the food purchaser.

Both Adams and Bartys seem to have reached the same conclusion: The fuel-only customer has a different mindset than someone interested in eating. “It’s amazing that we wondered why no one would come into the store when we only had seven parking slots,” Adams says. “We’re now putting in 50 and placing the fuel island on the side of the store.”

Of course, these insights in no way mean CST is ignoring fuel. In fact, in its investor call last fall, the company reported initial success in developing pricing methods that build margins while holding onto volume. Bowers also says CST now has the option to choose other fuel brands or go unbranded (it’s currently testing the Corner Store fuel brand in Houston) as a way to enter corners where a Valero-branded retailer already operates.

That said, shoppers wanting to go into the store do not wish to run a gauntlet to get inside.

“Are we going to lure the pump customer in?” Bartys says. “I’m not going to say never, but the fuel-only customer may be coming in once every 10 days. The food customer ... may come in three, four times a week, sometimes twice a day. Let’s make it easier for him.”

Building a Brand

The ability to debut the Corner Store brand was a long time coming, says Adams. Over 15 years, the company has had three different Valero logos, all starting with the Valero mothership. Corner Store has the opportunity to establish itself as a “fresh choice” both in its product offer and as a c-store focus at the company’s fuel locations. Once CST gets past its 52 C S P January 2014 current audience testing with its Corner Store logo, it intends to go market by market, bombarding the consumer with advertising about what’s behind the sign, he says.

But along the way, Valero did “own” the store side, Adams emphasizes. It developed a private-label program of 200 SKUs, everything from beef jerky to salty snacks, soft drinks to water.

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