24/7 Operations | NACS Online – Magazine – Past Issues – 2014 – August 2014
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24/7 Operations

In a recent survey, NACS explores the specter of 24-hour operations and its misperceived ills.

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By Chris Blasinsky

T​wenty-four hours a day is not acceptable — 10 pm to 4 am, I don’t know any [resident] that’s coming out to buy a sixpack of beer, tobacco, and whatever else they sell. It affects our community …” a Long Island, New York, resident said about a proposed 7-Eleven store during a June 10, 2014, Town Hall meeting. The quote and accompanying story appeared on a blog called “No7Eleven,” created by a group of New Yorkers who are fighting corporate-run and chain businesses coming into their neighborhoods.

A convenience store would bring unwanted traffic (and therefore accidents) and noise to the community, reduce home and property values, introduce tobacco and alcohol to kids and increase crime — with all those evils wrapped up in unappealing aesthetics. Or so say neighborhood residents and local activist groups.

This type of strong reaction against convenience store zoning at local town hall meetings is not unusual across the country — and 7-Eleven is not a lone target. “I will spend every spare moment to boycott your gas station,” commented a resident of Conway, South Carolina, to her local newspaper, about a proposed Palmetto Pointe convenience store in her neighborhood.

Issues often raised by the opposition center on the same basic question: Who could possibly need a store to be open in the middle of the night? The answer: shift workers, nighttime travelers, those in peril searching for a safe place to go, and cities and towns that will gladly take the extra tax revenue from additional overnight sales. In short, most communities.

Sadly, when local residents and activist groups show up at zoning hearings, this is not the information they present — and more than likely don’t know. Instead, what they come prepared to share are their misperceptions about convenience stores.

An Image Problem
NACS initiated the “Dangerfield Project” in 1999 to change public perception and the reputation of an industry that “don’t get no respect!” The catchphrase coined by the late comedian Rodney Dangerfield rang true 15 years ago, and in the ensuing years NACS and its members have
considerably elevated the industry’s image with an increased focus on foodservice, customer service and community engagement.

However, many retailers continue to address vulnerability on the local level — especially related to zoning issues and permitting of 24/7 operations. Local groups often cry “NIMBY” (not in my back yard) over new convenience stores because of a broader misunderstanding about the industry. Zoning commissions and homeowners associations are increasingly turning down requests for new stores or remodels and cite a variety of reasons, including increased traffic, noise, crime and litter. Twenty-four-hour operations are especially susceptible.

We’re (Mostly) Open 24/7
Given that more than 90% of new convenience stores have 24-hour operations, local opposition to late-night operations can significantly delay or derail the opening of a new store.

So what exactly happens in the midnight hours at stores? Who shops then and why? Just as importantly, what else happens behind the scenes that helps justify 24/7 operations? We asked NACS members these questions in March 2014 and their answers are proving valuable as we develop and communicate the industry’s voice around NIMBY issues.

The survey found that 65% of convenience retailers operate all or some of their stores 24/7. Another 9% of stores are open after 11 pm but are not 24/7 operations. For those retailers who say they ran into resistance in opening or remodeling a site into a 24/7 operation, they say that a perceived increase in crime, noise, light pollution, traffic and litter were cited as the primary concerns.

Among the retailers surveyed who say they don’t operate stores 24/7, the top reason (83%) is that sales simply don’t justify the extra hours of operation. On the flip side, who wants to minimize the inconvenience of a delivery truck blocking prized parking spots during busier hours — and give employees time to prepare for the morning rush.

Retailers also cited a number of other essential tasks that occur during late-night hours, such as restocking shelves and taking inventory, thorough cleaning of food prep and serving areas, deep cleaning at the forecourt and basic store maintenance.

It’s Often the Law
The NACS member survey supports the fact that state and local laws and regulations often dictate how convenience retailers must operate a 24/7 location.

Some efforts in recent years have focused on mandatory two-clerk rules during the hours of 11 pm to 5 am. Although there is no statistical evidence that proves multiple clerks on duty can have a significant effect on reducing the rate of convenience store robberies, according to security experts like Dr. Rosemary Erickson, that hasn’t stopped state and local governments from mandating the two-clerk rule. The number of people onsite is “meaningless” to a thief trying to rob a convenience store, notes Dr. Erickson in “Armed Robbers and Their Crimes.”

Akron, Ohio, was the first city to propose (but never enacted) a two-clerk rule in 1980. Gainesville, Florida, became the first city to legislate a two-clerk rule during late-night hours of operation in 1986. The entire state of Florida followed suit, requiring that retailers open between the hours of 11 pm to 5 am must have at least one of the following security measures: two or more employees, bullet-resistant safety enclosures, a security guard or a pass-thru window to conduct business.

However, data from Florida and four separate government or government-supported studies found that the two-clerk mandate does not reduce the likelihood of crime in stores. Yet in many cases, retailers often staff two clerks overnight as it makes many employees feel safer.

Late-Night Shoppers
The U.S. convenience store industry really took off in the 1960s, recording its first $1 billion in sales in 1966 and $3.5 billion a year in sales by the end of the decade. During this period, convenience stores added a new service: 24-hour operations. The most common claimant of the idea for the first 24-hour store is a 7-Eleven in Las Vegas, which makes perfect sense, given the 24-hour lifestyle of visitors to “Sin City” — and the shift workers who serve them.

Convenience stores remain one of the few 24/7 businesses that provide much-needed food, fuel and refreshment for millions of shift workers, those working in local bars and restaurants, police officers, factory workers, emergency room physicians and nurses, contractors and so on.

While those protesting 24-hour stores likely don’t have jobs that require shift work, they are dependent upon this growing workforce. According to the Bureau of Labor Statistics, there are approximately 15 million shift workers in the United States who work outside the hours of 7 am to 6 pm. The prevalence of shift work is greatest among protective services (police, firefighters and guards), followed by hospital workers, manufacturing, foodservice, transportation and utility workers and long-haul truckers.

According to the NACS survey, more than 95% of convenience retailers say that shift workers are the most common customers they serve during overnight hours, which include police and other protective service workers, hospital workers, taxi drivers and travelers driving long distances.

Living in a 24-hour economy has introduced competition for the late-night dollar; QSRs and Walmart are increasingly keeping their doors (or drive-thrus) open at all hours. Many grocery stores have employees working around the clock to stock shelves, take inventory, clean the store, accept deliveries and prepare food — so why not add a late-shift store clerk to the mix? Many now do.

It’s possible that a longtime key differentiator that sets the convenience store industry apart from other retail channels — 24/7 hours of operation — is facing disruption by other retail channels. In many cases, our competition is welcomed by communities, so why don’t the same groups welcome convenience stores operating the same hours?

What Late-Night Shoppers Buy
Beyond store operations, misperceptions abound around what is sold in stores late night. In fact, NACS survey results refute the common misperception that late-night shoppers are there to grab a six-pack. Our survey found that customers, predominately shift workers, are shopping for a snack or meal (92%), coffee or beverage (83%), gasoline (81%), cold medicine (35%) or to use the ATM (56%).

“While community groups often cite sensationalized news stories to make a point about why they don’t want 24/7 stores, they can’t ignore the positive news about late-night hours,” said Jeff Lenard, vice president of strategic industry initiatives at NACS. “No one will ever run a news story about a parent able to pick up medicine for their sick child at 3:00 am or a college student coming home on break safely fueling up late at night, instead of running out of gas on the side of the road. But these positive stories are told every night at convenience stores across the country.”

Shift workers also depend upon stores for that quick pick-me-up — and that includes coffee and energy drinks. Caffeine has ample science that backs up its ability aid in alertness and performance. It’s the only “drug” that, in small doses, was recommended by the U.S. Centers for Disease Control and Prevention (CDC) as an aid for shift workers in a 1997 report. “Who do you want on patrol in your community on the overnight hours — someone who is tired and weary or someone alert and active?” asked Lenard.

Convenience stores with 24/7 operations are perfectly positioned to cater to consumers looking for a “fourth meal” (food eaten between 10 pm and 5 am). Many restaurants close after 11 pm, meaning the local c-store is often the only option for people to buy a prepared meal, beverage or snack. These late-night occasions are particularly attractive to the Millennial crowd; the majority of those seeking late-night food are age 34 and younger, according to Technomic.

NACS consumer data confirms this trend. A January 2014 NACS Consumer Fuels Survey found that 13% of Millennials most often fill up their tank late in the day (defined as 7 pm until 6 am), a rate three-fold higher than those age 50 and above (4%). These late shoppers also buy grab-and-go meals: One in eight (12%) say that they buy a sandwich or other meal item from the grab-and-go fresh case at a store. In fact, the percentage of consumers who buy grab-and-go sandwiches at night surpasses every other time period, including the morning rush (10%) and lunchtime (8%).

Making a Case for 24/7
You don’t have to be in the big city to require 24-hour operations; small towns increasingly rely on overnight hours as well. Just look at Casey’s General Stores, which based its model on serving small Midwestern communities with populations of 5,000 or fewer. The stores were open from 6 am to 11 pm until 2011.

What changed Casey’s thinking was its acquisition of a small truck stop in Pella, Iowa, a 24-hour store located near the corporate offices of Pella Windows and Doors Corporation and the Vermeer Corporation. If Casey’s reduced the hours of operation at the store, it risked turning away not only a strong customer base, but also nearly one-third of the store’s total sales throughout the day.

Instead, Casey’s tested its newfound opportunity to move its other stores to 24/7 operations, but not without overcoming some initial reservations. “Our number one concern was the safety of our employees and we found that we could manage that by making sure that we had at least two employees on staff during that 24-hour period,” commented Terry Handley, president and COO of Casey’s, in the 2013 NACS “Ideas 2 Go” program. Today, more than 750 Casey’s stores are open 24/7.

Like many retailers, Casey’s also fielded community concerns. “There are definitely concerns of safety, also the concerns with neighbors with regards to noise control and so forth,” said Handley. “We try to be a good neighbor wherever we are operating and make sure that we communicate to our local neighborhoods that this [store] is going to be a 24- hour operation.”

Casey’s also found that there are mutual benefits for 24-hour operations in small communities, especially where there are local factories and businesses with shift workers. According to the retailer’s 2013 Annual Report, Casey’s converted 200 stores to 24-hour operations in fiscal 2013 and was pleased with the lift in foodservice sales. Aside from increased pizza sales — Casey’s is the fifth-largest pizza operation in the country — around-the-clock operations also impacted fountain, coffee and bakery sales. “Expanding to 24-hour operations is another way to reach new customers who may have not tried our prepared food offerings,” noted the report.

Local Battle
Demonstrating the heightened sensitivity to these issues, one retailer we spoke with requested that we withhold the location of his convenience store because of a current legal battle with the city council. He maintains that limited operating hours are damaging his business, and that he’s missing sales opportunities from early morning and late-night shoppers, noting that the amount of road traffic warrants a 24/7 operation.

About a year ago, he opened a store in a residential area, and because of local covenant restrictions he agreed to limit operating hours (6 am to 11 pm) and delivery hours between 7 am and 7 pm. Within a year, the store was broken into three times after hours. Crime, being one of a handful of complaints that a group of residents brought to the table during a zoning meeting, is exactly the result they feared. While the community raised fears about robbery, what they got instead was burglary.

More often than not, the groups that adamantly oppose 24/7 hours of operation are not representative of the community at large, and in an increasing number of cases aren’t even from the community — they just squawked the loudest and threatened legal action.

Our retailer says that these types of local battles are becoming tougher to fight, which is unfortunate for the majority because convenience stores provide a valuable service to their communities. “If the authorities didn’t believe that our businesses should be there, then they wouldn’t grant the zoning,” the retailer said, adding that from his experience, the real fight often begins with local residents after zoning requests are approved.

Chris Blasinsky is the managing editor of NACS Magazine and director of editorial projects at NACS. She can be reached at cblasinsky@nacsonline.com.