CSPs coverage of the 2011 NACS Show.
Ideas 2 Go: Marts, Coves & Drive-Thrus
In a video montage of retail creativity and business best practices, the 2011 Ideas 2 Go session featured nine retailers, each with a concept that should inspire others looking to refresh their own offerings. A sampling:
- Scaled-Down Opportunities: Pak-A-Sak Inc. has repurposed two sites originally designed as Starbucks to fit a smaller version of its c-stores. As customers queue up in the drive-thru lane, they can see the store’s selection of packaged beverages through large glass windows. Sixty-seven percent of sales are made through the drive-thru.
- Healthful Fixings: Nourish Market, a single-store operator in McLean, Va., specializes in homemade prepared foods and has gotten a boost by catering open houses for local real-estate agents. Other offerings include organic wine and gluten-free beer and crackers.
The Coco Cove store brand from The Sullivan Family of Cos., Honolulu, features a deli and sushi case. At the store’s salad bar, customers pick their own greens and fixings and have the salad tossed fresh.
Healthful living and truckers may not always be synonymous, but Russell’s Truck & Travel Center, Glenrio, N.M., is hoping to make the connection clearer. The site offers “an oasis in the desert,” including a fresh-fruit program and exercise equipment for truckers.
- Bold Design: Open Pantry Food Marts of Wisconsin Inc., Pleasant Prairie, Wis., also aims to remake the convenience mold with one of its newest sites. The high-end store includes 72-inch gondolas, flat-screen TVs above the coolers in lieu of signage, and a beer vault stocked with a huge microbrewery offering.
Honolulu-based Aloha Petroleum’s Aloha Island Mart chain has also used design to make a new convenience statement with a tear-down and rebuild. The 3,000-square-foot site, designed by Joseph Bona of retail branding and design firm CBX, has a Polynesian feel to tie into its tropical surroundings. Tall, loft-style ceilings and large windows lend an open feel, and angled gondolas enable customers to more easily navigate the store. —Samantha Oller
A Tale of Two Refiner-Marketers
Valero, Speedway execs share rare passion for retail
At a time when refiners are quickly divorcing themselves of their retail holdings, two refiner-marketers are embracing their street presence as a counterbalance to the cyclical drop in refinery margins. In the “Tale of Two Retailers” panel at the 2011 NACS Show, moderated by Cumberland Gulf CEO Joe Petrowski, Tony Kenney of Speedway LLC and Gary Arthur of Valero Energy presented their retail philosophies and opportunities.
For Valero, San Antonio, retail is focused on five platforms, Arthur explained:
- Foodservice value and quality.
- Private label, which began with an offering of 100 SKUs and will expand by 50 more SKUs in 2012.
- Self-distribution, through Valero’s Texas warehouse.
- An emphasis on the core categories and big brands within beer, tobacco, packaged beverages, snacks and candy.
- The expansion of services such as car wash, ATMs, lottery and Redbox DVD rental kiosks.
With 995 company-ops in eight states and 1.2 million customers a day, Valero is a leaner, more productive company since culling underperforming sites over recent years. The result: Valero’s Corner Store sites are three times more productive than the average of only a few years ago.
Speedway, Enon, Ohio, has also hit its fighting weight, spun off with Marathon’s refining and terminal business into Marathon Petroleum Corp. (MPC), and down to 1,375 sites after it exited non-key markets. As the fifth-largest U.S. refiner and fourth-largest company-owned and operated convenience chain, Speedway serves more than 2 million customers a day, with a dedication to elevating its brand positioning.
Components of this effort include:
- Customer service, delivered by 19,000 Speedway employees.
- The Speedy Rewards loyalty program, Speedway’s “go-to-market strategy,” with 3.8 million active members.
- A dedication to consistency in its retail offering across the network, which develops trust and confidence between the retailer and its customers and forms the foundation of its brand equity.
- An embrace of technology to help trim costs and keep the company running efficiently.
Petrowski asked both execs why their companies continue to grow the retail and wholesale distribution businesses as many refiners exit them. Arthur explained that Valero’s investment in retail and its growing ethanol business provide counter-cyclicality to refining.
A big point of difference between Speedway and the majors, said Kenney, is that his chain has differentiated its retail business—Speedway—from its distribution brand, Marathon. In addition, the retail and wholesale businesses create flexibility and synergies for MPC’s pipeline and terminal businesses.
Petrowski asked whether the general consolidation trend in the c-store channel will expand. Kenney said the c-store model has replaced the old two-pump setup and is more viable in the long term. “I think there is still room for rationalization of assets,” he said, but he sees them being replaced by larger sites.
“We will see some decline, but not as dramatic as over the past 20 to 30 years,” said Arthur, who pointed out that the channel is still very fragmented. At the same time, sites are much more efficient and productive.
One area of industry focus—foodservice— is still a work in progress at both chains. Kenney described Speedway as a “good foodservice operator, not a great one,” and said the industry has to raise the perception of what it can offer. Arthur said Valero was not built on foodservice, but it has come “a long way,” with its advanced foodservice program rolled out at 40% of its sites within the past five years of its existence. Even so, it is no silver bullet.
“Foodservice is not perfect for every store,” he said. “It’s just one of those levers we pull each day to improve our business.”