Customerz Firzt

Sheetz's customer-centric retooling pays off with CSP-Service Intelligence Mystery Shop win.

By
Linda Abu-Shalback Zid, Senior Editor

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It was the equivalent of a solid B, a grade many college students might study their hearts out to achieve. But when Sheetz Inc. scored 86.3% in the CSP-Service Intelligence Mystery Shop back in 2005, the company took notice and committed to some serious homework.

This year, Sheetz moved to the head of the class. “The survey really ticked us off; it got us going,” says Travis Sheetz, vice president of operations, of the 2005 experience.

The results six years ago were surprising to the broader c-store community, which for about two decades had consistently ranked Sheetz among the industry’s elite, in large part because of its robust foodservice business and a strong family-run culture.

The Sheetz gang, spanning three generations, saw a hole exposed in the 2005 mystery shop. In short, Sheetz was a great brand with a great motif and product, but with only a good to very good execution of fundamentals.

A grueling six-year effort has changed everything. According to the 2011 CSPService Intelligence Mystery Shop results, Sheetz not only was the only company among 10 major regional chains to top

90%, but it also ranked among the highest in the five major categories—customer service, exterior and interior cleanliness, merchandising and employee appearance. It also finished in the top three or four in virtually all 27 metrics examined in more than 110 specific shopping episodes, covering all time segments. (For a detailed report on the mystery shop, see Samantha Oller’s story on p. 45.)

Yet for the 394-store, Altoona, Pa.- based Sheetz, it’s about more than improving scores. It’s about the passion behind this family-run company’s efforts to better serve its customers.

Customer Care

Ask Travis a question about any Sheetz Inc. strategy—foodservice, cleanliness or stock—and his answer will circle back to one thing: customer service.

Travis’ enthusiasm, echoed by other company executives, resonates on the ground level. During guided and unguided store visits, there’s a communal energy in the air, with regular customers chatting easily with employees about local gossip and town matters.

That friendliness is found throughout Sheetz’s six states of business. “Friendliness, specifically providing greeting and parting remarks, is absolutely critical to a mystery shopper’s indicating a likelihood of recommending a location to others,” says Marie Boucher, market research specialist for Charlotte, N.C.- based Service Intelligence Inc., which conducted the mystery shop in partnership with CSP. “There is just no other single metric in my experience that has a higher correlation with our shoppers’ positive reactions to locations.”

Indeed, on five questions centered on the cashier’s interaction with the consumer and overall professionalism, Sheetz scores 95% to 100%. Only two other chains—Kwik Trip and QuikTrip— achieved such numbers. Not surprisingly, each is a two-time winner of the CSPService Intelligence Mystery Shop.

Smiles and friendly service are just part of the Sheetz equation, though. Back in that 2005 mystery shop, Dan McMahon, executive vice president of operations, took results of the company’s lower placement in speed “very, very heavily,” according to Travis. “That was one of those things that through growth and over time sort of came off our radar.”

First, the company’s IT team coalesced to accelerate credit transactions. “Literally,” says Travis, “by the time you hand [the clerks] the card and they swipe it, that receipt is printing out immediately— and you’re able to get in and out of the store very quickly.”

Next, Sheetz implemented a “3-to- 1” ratio of customers to open registers. “That’s a metric that our employees can identify, and it will tell them when they need to go up front.” Some employees, he explains, initially felt it was a weakness to ask for the help. “So we want to strip that away. That’s been a challenge, too, but we’re much better.” To further usher in a speed-and-service culture, the company now assigns a store manager to the front registers to quickly address any issues that might arise. While there’s some allowance for issues elsewhere inside or outside of the store, Travis says, “Unless there’s something we want them specifically to take care of, we want them front and center.”

To accomplish this, Sheetz took some paperwork and other management tasks away from management responsibilities, and grouped other tasks for the managers to do at the end of the shift. Because the managers are at the front of the store and can see everything that’s going on, they also can direct labor more effi ciently to meet customer needs.

Other areas where Sheetz scored high marks are also tied directly or indirectly to the company’s intense customer focus: exterior cleanliness, in-stocks, merchandising and signage, and offering loyalty card membership.

Outside in. When discussing Sheetz positively, just about all of the mystery shoppers mentioned cleanliness (specifi cally the forecourt) and availability of pumps/forecourt size. “Outside, the parking lot areas were clean,” one shopper said. “The pumps were clean and properly maintained.”

At higher-volume stores and stores with large exteriors, Sheetz has a dedicated facilities employee, focused on outside and inside cleaning for an entire shift. At lower-volume stores, the duties are split among employees as part of a checklist or “shift walk.”

The company’s emphasis on the exterior, which Travis calls “the front porch,” is driven by a desire to conquer preconceived notions people might have of gas stations. “We just try to look more like a foodservice place, and the outside is as important as the inside,” he says. “And what you see when you fi rst drive up, that fi rst impression—it’s hard to change that.” The company scored a 96.7% on exterior cleanliness, and an also-impressive 95.5% on interior cleanliness. Steve Sheetz, chairman of the board, says that first impression also applies to inside the store for customers on the go—particularly in the restrooms. Signs in the restrooms encourage customers to call the company if they aren’t satisfi ed. “We want that feedback and it’s a constant challenge, because our restrooms are used heavily,” Steve says. “Our restrooms are a big part of why people stop at Sheetz.”

Stocked and ready. Another strategy to enhance the customer’s experience is “focusing heavily on 100% in-stocks.” And that is obviously working, because Sheetz scored 100% on having the fountain drink/slushy area stocked and 100% in having the coffee area stocked. For coffee, the company has implemented a beverage hostess who keeps coffee stocked and fresh for four hours every morning. “They also greet customers, and they’re very recognized by our customers,” Travis says.

The company scored 98.2% in having the cooler doors stocked, a more than 3% difference over the nearest competition. The company’s own customer service shops, which drive employee bonuses, are behind those efforts. “We look at all the slots and how many you have and you get points deducted based on how many empty slots you might have,” Travis says. “We do the same thing with candy.”

Seeing Signs. “Holy Sheetza Pizza” signs at the stores offer a medium pizza and a 2-liter soda for $4.99. Another lifesize sign will “triple dog dare ya’” to try a frozen Sheetz Bros. Coffeez specialty beverage—courtesy of the company’s “highly creative” internal brand team put in place several years ago. The company came in second for merchandising and signage on the mystery shop, with a score of 94.6%. “We have a lot of fl avor and entertainment in our marketing and in our signage,” Travis says.

Lauding Loyalty. At press time, the company was putting the finishing touches on spreading its MySheetz loyalty card companywide (after testing for nearly two years in North Carolina and Ohio). Sheetz also had the highest score (38.74%) of cashiers mentioning loyalty/rewards programs or company credit card, likely driven by the new loyalty program (although Sheetz has both). “Employees really jumped on that,” Travis says. “We incented them in the beginning, and it’s a natural part of their greeting at the register.”

The program’s savings include 3 cents off every gallon of gas, and offers centered on Sheetz Bros. Coffeez and foodservice. When the company launched its Sheetz-branded peanuts about a year ago, it loaded a free bag onto every loyalty customer’s card. “It’s a good way to sample free items you want them to try,” Travis says.

On a side note, the company has been looking more at doing private-label items. “We have with our kitchen the ability to do much more of it, so we’re researching it more than we ever have,” Travis says. “But just because you can put your name on it doesn’t mean you can always do it cheaper. Our primary business is the retail business, not the manufacturing business.”

Food For thought

In 2008, Sheetz opened that 140,000-square-foot kitchen commissary, The Sheetz Bros. Kitchen, in Claysburg, Pa., to deliver fresh foods seven days a week. Again, that effort goes back to customer service. “We had realized that we had our people doing so much more than serving customers in the store,” Travis says. Those duties included baking bread, cookies and other items, and portioning out dressings for foodservice.

“That all went to the kitchen, because we can do all of that in one place and then send those items out to the store—already ready to go,” he says. “That’s a speed benefi t at the store level and a service benefi t, because now our people don’t have to be as much distracted by all that labor.”

The company also in July announced plans to open another commissary in North Carolina, which will serve that state’s stores and also those in southern Virginia and West Virginia.

Right in the center of a store near Sheetz’s Altoona headquarters, Travis points to a large refrigerated case. There, Sheetz, known for its substantial madeto- order (MTO) selections, showcases “ready to eat” foods premade at the commissary. Introduced about two years ago, RTE (ready to eat) also segues back toward the company’s speed initiative—but the challenge is not to be the stereotypical prepackaged foods of ’70s c-stores. “It’s always a risk,” Travis says, “because you’re going back into time to a business. But I think what we had to do and what helped us do it is that we were proven to be a good freshfood provider, and that gave us license to go back into that kind of world.”

The RTE case also allows the company to sell healthier products, with fresh-cut fruits and vegetables readily visible to customers. While the items are selling well, he says, “from a healthy standpoint, the ready-to-eat case has really helped us, given us a lot of credit in that world.”

Douglas Mills, director of foodservice sales and development, says, “By offering some healthier options, we feel we can better extend ourselves to a clientele that may not always [have been] identified as the ‘typical c-store shopper.’ ”

Sheetz carries staple healthier items such as turkey subs, signature made-toorder salads and steel-cut oatmeal with sliced apples. “But we’ve also recently gotten into more unique items in our ready-to-eat cases, such as melon fruit trays, hummus with crisps and sugar-free gel bites for the more health-conscious, on-the-go consumer,” Mills says. In an industry in which tobacco continues to dominate despite efforts to diversify, Sheetz is the anomaly and perhaps a barometer for where the convenience channels need to pivot. Food and beverages account for close to 50% of company sales. And while having healthier options has enhanced those sales, across from that RTE case is one filled with doughnuts and bakery items, also delivered from the commissary. “We believe that it’s beneficial for our consumer to have a wide selection of choices in both healthy and comfort-food menu options,” says Mills.

Having both signature MTO kitchens and RTE options at the stores, Mills says, “allows customers to choose from either a healthier item or a treat or indulgence if they like, such as chili cheese dogs or an Oreo Cream Smoothie. The same guest may fill either occasion, in some cases depending on time of day, or day of the week—or just the mood they may be in that day.”

The company continuously revamps both offerings, Mills says, rotating seasonal items as well as keeping with current trends in the marketplace. Recently, the company introduced a healthieroption EatShmart! Line, debuting a Tus- can Beef Wrap with less than 400 calories.

Another recent addition was that Sheetza 12-inch pizza for $4.99—an inclusion that is as much defensive as it is to grow sales. “This pizza dinner platform was something that other QSRs have had recent success in. We also thought it may be giving our current regular guests a reason to go elsewhere for their dinner options,” Mills says. “We wanted to make sure we captured that buying opportunity.”

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