By Chris Blasinsky
Check out a few buzzwords from this year’s NACS Show: excitement, engagement, innovation and world-class. You may have a few more to include. And now that you’ve had ample time to digest the entire experience, it’s time to take those ideas and put them to work in your operation. (If you didn’t attend this year’s Show, it’s just about time to start planning for the 2010 NACS Show in Atlanta on October 5 to 8.)
Maybe you’re okay with the status quo. Business is good, customers are happy and the boat doesn’t seem to be rocking. However, if you’re a savvy retailer who is constantly on the lookout for best practices, opportunities and profitability, then you undoubtedly got some food for thought from one of the NACS Show’s 66 workshops, three general sessions, an expo covering more than 350,000 net square feet of floor, 1,222 exhibiting companies and countless networking opportunities.
Quite often, it’s the Show speakers that energize attendees and give that one good idea that could change their business.
“Our industry is all about ideas,” said 2008-2009 NACS Chairman Sonja Hubbard, CEO of Texarkana, Texas-based E-Z Mart Stores Inc.
Citing Thomas Edison — “Opportunity is missed by most people because it comes dressed in overalls and looks a lot like work” — Hubbard noted that the convenience and petroleum retailing industry seizes opportunities and continues to evolve from change and innovation.
But despite the industry’s growth and resilience, it’s not without its threats and challenges.
“I cannot think of another industry that faces more tax and regulation challenges than convenience stores. The poorly thought out, irrational legislation that is pouring off of Capitol Hill today is a huge threat to our business,” she said, noting tax increases, fuel mandates, labor laws and FDA regulation.
When Hubbard became NACS chairman, the economy was in the midst of a recession. And while some retail channels are still struggling, she reminded attendees that the convenience store industry is poised to survive and thrive — a lesson learned by enduring previous economic hardships, such as the early 1990s recession. “Back then, our sales were about $130 billion. Today they are five times that. Our stores used to be thought of as the last option for many items, but today we are a destination.”
The opportunity to dramatically grow foodservice sales — which already account for nearly one in every seven dollars spent inside convenience stores — is almost unlimited, said NACS President and CEO Hank Armour. To help retailers achieve their sales potential, NACS is launching the NACS Center for Achieving Foodservice Excellence, also known as the NACS CAFÉ.
NACS CAFÉ, debuting in early 2010, “is designed to bring compelling value to both small companies just getting into foodservice and sophisticated retailers already in the business,” he said. (For more on the program, visit nacsonline.com/nacscafe.)
Armour cited another initiative to fix the broken credit card system. “We need to light grassroots fire around the country” and get customers to speak out over credit card interchange fees via a new NACS-sponsored petition campaign — similar to those that have resulted in more than 1.6 million signatures at 7-Eleven and Circle K stores, he told attendees.
“Between now and the second week of January, we want every convenience store in the United States to run an interchange fee petition drive,” said Armour. “Let’s overwhelm Congress with millions and millions of signatures demanding action to fix the broken credit card system” (For more, visit nacsonline.com/fightswipefees.com.)
Jay Ricker, president of Anderson, Indiana-based Ricker Oil Company, took the gavel as the 2009-2010 NACS chairman and shared his passions about the industry, passions that he maintains after 40-plus years as “an oilman.”
“Sharing is what our industry is all about,” said Ricker, emphasizing how getting involved with study groups can help retailers improve their business (click here for more about Jay Ricker, your new NACS chairman).
He also stressed how customer service is essential to any successful retail operation. “You can share all the great ideas in the world, but it still comes down to one thing: how you treat your customers.”
In closing, Ricker shared the three-legged stool that supports NACS: knowledge, connections and advocacy. “We are all part of an incredible industry that shares best practices. That’s knowledge. Our passion for customer service is really about connections. And our engagement with the media and our elected leaders is all about advocacy,” he said. “Whether you own one store or 500 or somewhere in between, those are the principles that bind us together, and will make us all better.”
What’s the tie-in between the travel industry and the convenience store industry? Trillions of dollars filtering back into the U.S. economy.
“It’s amazing how big [your] industry is,” said opening general session speaker Roger Dow. “If you put it together with the travel industry — we’re about $770 billion — we’re talking about $1.4 trillion dollars of the U.S. economy. If you put all our employees together, we employ one out of every seven people that have a job in America...I see you as part of the travel industry,” he said. “All of our numbers say that two-thirds of the people that take a trip anywhere and stay overnight do it on a highway or on a road.”
Roger Dow has learned quite a bit about customer service over the years, particularly in the travel and hospitality industries in his current role as president and CEO of the U.S. Travel Association and 34 years at Marriott International.
But forget about customer satisfaction, he suggested, and think bigger and broader about how convenience stores will keep customers coming back.
“Where we need to get to today is customer enthusiasm,” he said “How do you get the position where someone is tattooing your logo on their bodies, like they do for Harley Davidson? Then you know you’re there!”
Using Howard Johnson as an example, Dow also noted the importance of adapting and evolving with the market. At one time the company had 1,500 restaurants. Today, just 20. So what happened? “Howard Johnson didn’t pay attention” to the pressures that families were facing, said Dow. “Folks like you came along, and fast food came along and literally stole the restaurant business away from Howard Johnson because they didn’t pay attention to how the market had changed.”
Citing the challenges and realities facing both industries, whether economic pressures, the media or government regulation, Dow commented that retailers have to be unified if they want to win. “You’ve got to play to win the game,” he said.
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By Chris Blasinsky
The strong NACS Show attendance of 22,500 made a statement in October: This industry knows that surviving a recession means a stronger focus on evolving, getting better at what it does best and meeting the changing demands of today’s customers.
This view can expand to the world stage, as we seek out best practices and ideas that evolve the communities that are home to our stores into interdependent societies that support the global economy. It’s a tall order, but fortunately, at the NACS Show closing general session, former President Bill Clinton shared his insights on how the United States — and the world — can meet today’s challenges and lay the groundwork a prosperous future.
As founder of the William J. Clinton Foundation, the former president works on economic projects in the United States, Africa and Latin America, distributing AIDS medicine in 70 countries and conducting energy and climate change projects in 40 cities on six continents. “I have a very different take on the world now,” he told the crowded ballroom, adding that most of his time is spent working with the private sector, government and other charitable organizations “to actually solve these problems.”
Reflecting on his political career and that of his successors, Clinton noted that there were two “great questions debated and two questions constantly emphasized” in the press and asked of the sitting president: What are you going to do and how much money are you going to spend?
And today, those questions actually deserve important follow up he admitted, especially on a local and personal level: “How do you propose to turn your good intentions into real changes in your lives, your businesses and other people’s lives?”
He shared how the Clinton Global Initiative has partnered with the Solar Night Company to put its solar flashlights in half a million homes in Haiti, providing electricity for more than 25 percent of the country. “Everyone should contribute to some sort of charitable endeavor,” Clinton said.
Are we out of the woods yet? Well, it depends on who you ask, Clinton stated.
“If you’re just an ordinary American business person or worker and you’re out there living in this economy, the answer is ‘no’ because unemployment is still going up in the economy as a whole, people’s incomes are very strapped,” Clinton said, adding that 92 banks failed last year and 100 more will fail this year. “There’s a lot of uncertainty out there,” he said.
Citing high college costs and health-care spending, Clinton questioned whether the United States is prepared to “do what it takes” to be globally competitive and change our current system, or if we’re prepared to “let the American economy sink and others rise because we can’t figure out how to be more competitive?”
Globally, while the outlook is challenging, it holds promise. But there is one economic bright spot closer to home: convenience stores.
“I’m very grateful for the contribution that all of you make to our economy: About four and a half percent of our GDP, over 1.7 million employees. You are one of the few sources of job growth in the United States in the last year,” Clinton praised the crowd.
“We have to look at the job killing aspects of our economy where we’re not competitive,” continued Clinton, and specifically addressed one issue that directly affects the convenience and petroleum retailing industry: credit card fees.
“I think the deal you got with the credit card companies is terrible,” he said to applause, adding that the idea that they “get an antitrust exemption” and set fees that “give them no incentive to compete” is wrong.
“When I read the background on the deal you have to eat with this credit card thing, I couldn’t believe it. You almost couldn’t make this up,” said Clinton. “When I think of all the pious speeches that are given on the floor of the Congress every day about the free enterprise system and competition, and then have the law making sure that whoever you’re trying to protect never has to compete. That’s pretty bad.”
His advice: “Keep pushing for legal changes.”
In a question-and-answer session after Clinton’s presentation, NACS Chairman Jay Ricker asked Clinton about his take on the most effective ways to advocate the industry’s issues before Congress. Make it personal, Clinton advised.
“Whatever the issue is, make sure they [members of Congress] know it from your point of view,” and “make the argument from the point of view of your customers and from the fact that 56 percent of your stores” are single-store operators and small businesses. “[Members of Congress] know that most jobs in America are created by small business, so I’d talk about your business, your employees and your customers,” he said.
Clinton added that most members of Congress will “try to do the right thing” and those who represent small town America “will be more likely to personally know your members and I think you ought to get them to carry water for you.”
Sound advice.
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QuikTrip’s Chet Cadieux and Quick Chek’s Dean Durling led an interactive and candid panel discussion on Business Strategy Day.
NACS Show attendees got a rare chance to hear industry insights from leaders from two of the leading convenience and petroleum retailing companies: Chet Cadieux, president and CEO of QuikTrip Corp., and Dean Durling, president and CEO of Quick Chek Corp. Both openly shared their insights, passions and vision for the industry during Thursday’s general session, “A Tale of Two Retailers,” presented by NACS Magazine.
“Today we’ll take a look at how two successful companies continue to innovate and grow their customer bases,” said moderator Steve Sheetz, chairman of the board of Sheetz Inc. “This isn’t about who they are, but about what they do and how they do it.”
Both Cadieux and Durling painted a bold picture of how important culture is ingrained in their companies and how it pays to hire and maintain the best and brightest employees.
“We’re based on a strong culture,” said Cadieux, calling QuikTrip’s culture more like a cult. “People either want to be there or they want to be gone really quick and think that we’re whack jobs. The people who really drink the KoolAid have certain things in common,” he said.
“We want people who are absolutely driven, the classic overachievers who cannot fathom not wanting to be the best,” he said, adding that team members are never satisfied with the status quo. “We have institutional paranoia — high achievement is not enough.”
QuikTrip also seeks individuals who focus on doing the right thing. “I know that sounds corny but that’s probably the core value we use most. The definition we use is my dad’s definition: At the end of the day if you told your mother what you did that day, would you be proud to tell her?”
Quick Chek, which excels at foodservice and customer service, didn’t get to its position as an industry leader by accident. What has helped propel the company to $600 million in gross annual revenue — with average inside sales reaching three times the industry average — and a foodservice program that represents 25 percent of sales and 48 percent of in-store profit, is the company’s emphasis on culture. “I’m proud of a lot of things that Quick Chek does, but we’re really proud of our people,” said Durling.
“Quite simply, our vision is to be the best convenience marketer in the New York metro market. It’s what we strive to be and strive to do throughout our entire company. Our mission is also simple,” Durling continued, sharing how the mission makes Quick Chek a great place to work, a great place to shop and a great place to invest. “A great place to work makes it a great place to shop. Customers can feel it and see it.”
Cadieux stressed the importance of focus, adding that QuikTrip’s focus is its people. “We do a lot of things to invest and make sure that we have great people,” he said, citing competitive wages, respect and transparency. “We’re firm believers in letting everyone in the organization know exactly what’s going on … If we’re hiring the right people, they want to know what they’re doing wrong because they want to get better.”
The first question Sheetz posed to the panel explored the concept of channel blurring, and what retailers can do to step up their game “and compete for the convenience customer.”
Cadieux reiterated the importance of having a strong focus: Take that quality or aspect of your operation you’re great at — the differentiator — and become the best.
“We cannot be a better Walmart than Walmart. We cannot be a better Kroger than Kroger and we cannot be a better Giant than Giant,” he said. “But what we can do is be a hell of a lot better convenience store than they will ever be.”
Durling agreed, and provided a glimpse at how focused and tenacious Quick Chek is when competition steps into its arena. “We’re great convenience marketers. That’s our game and what our task should be is to continue to be the best convenience marketers in our industry.”
And when a retailer from outside the industry comes in, such as Toys “R” Us, don’t cede your turf. “That’s a stock-up store for Christmas, that’s not a convenience store. We’re convenience stores and we’re the best. So when somebody else comes in from the outside, don’t give it to them,” Durling said.
Also, make sure your convenience store is actually convenient.
“Every customer who comes through the door feels like they don’t possibly have enough time to make this stop,” said Cadieux. “Whatever we can do to lower their blood pressure a little bit and maybe put a smile on their face, then we’re a hero. That sounds like an overstatement but that’s reality to that customer. We’ve got to make sure that we are convenient. That’s an art form and it’s something our industry is great at.”
A robust question-and-answer session consumed much of the 75-minute session.
Greg Parker, president and CEO at The Parker Companies in Savannah, Georgia, cited the current economic climate, diminishing real estate and access to values and liquidity when he asked the panel to share their long-term growth plans.
Citing a quote from someone else’s playbook — “We don’t participate in recessions” — Durling responded that Quick Chek continues to invest in the company’s future. “We have not stopped our growth; our growth rate is six to eight new stores each year, our remodel program and our rebranding program continues, redevelopment of our core and important categories continues — we haven’t stepped back,” he said.
“A recession is a terrible thing to waste, because everything has gotten really cheap,” said Cadieux, adding that the company is taking advantage of low-cost real estate, equipment and construction. “We’re making hay while that’s the case, because we may not get another shot at it in this generation.”
Dell Nichols, owner of CK Management in Salt Lake City, asked the panel their thoughts about new products that could gain traction.
“We try to not take on a bunch of new stuff,” said Cadieux. “In our case, we try to only do a few things and do them extremely well — foodservice for now. We haven’t seen anything else that gets us really excited and makes us want to distract from that focus.”
Durling also warned against straying too far from your core in searching for the next big thing. “If you stray too far, customers don’t understand what your role is in their life and you can’t be great at it. We want to be famous for certain things that customers know they can come to us for.”
“If we can’t be the best at it, then we don’t want to play,” agreed Cadieux. “That helps clarify for us what we want to focus on.”
Gene Gerke of CSX LLC asked about building and maintaining the QuikTrip and Quick Chek brands.
“Our people are our brand,” said Cadieux. “Our attitude is that we run about 1.6 to 1.7 million transactions a day, and [QuikTrip associates] are our brand. Our marketing plan literally is to put the best person we can in front of the customer every single time.”
“It’s our stores, it’s about our people and it’s about our product,” said Durling. “Quick Chek represents fresh convenience,” which includes delivering fresh products to its customers as well as the behavior of its employees. “A fresh attitude is fun,” he said, adding that all new employees go through a TCD (total customer dedication) orientation program before stepping foot in a store. “They learn about what the Quick Chek brand stands for and how they need to behave in the store and what they’re allowed to do.”
Julian Mitchell, president of J.E. and R.B. Mitchell Inc. in Frederick, Maryland, asked what QuikTrip and Quick Chek are doing to address interchange fees and PCI compliance mandates.
“We have to do something...and we have to do it together,” Durling said, but acknowledged that Quick Chek has to give its customers a choice. “We give our customers a choice because we have to answer to them as a retailer. I don’t see us reinventing the cash/credit card issue other than what NACS can do to help us.”
Cadieux added that on behalf of the industry, “NACS is doing everything it can possibly do and I think they are doing a phenomenal job. None of us as retailers want to take the kind of pounding that they have taken on behalf of us and I’m hopeful that everyone in this room is doing everything they can to help...I think we’re on the right path, whether we’ll be successful or not is something else altogether, but by God it’s the good fight.”
Sheetz posed the last question — the “moderator’s choice” — asking Durling and Cadieux to share one idea that changed their business.
Both retailers cited the decision to add fuel to their operations, but also had a few insights to help attendees focus on one great idea that they can really run with.
“Grab an idea that you think is in the realm of your DNA” and “become famous for it,” said Durling.
“It took us 30 years plus to get this good at gasoline,” said Cadieux, noting that the company’s board of directors made the decision to add fuel to QuikTrip stores while traveling to a football game. “An idea can be as small as that,” he said.