Learning Together

From safety to seasonal offerings and from foodservice to fuel, NACS Show education sessions had it covered.

Learning Together

November 2023   minute read

By: Leah Ash , Shannon Carroll , Lisa King , Batya Levy , Keith Reid , Emma Tainter

A State of the Industry Update

Chris Rapanick, managing director of research at NACS, led attendees of “State of the Industry Update: Leveraging the Latest Financial Benchmarks” through a deep dive of the convenience industry’s financial report card with “a goal to help you make use of this data to make better strategic decisions.”

The session covered top-of-mind and key performance metrics on inflation, fuel and store counts based on the data presented at the State of the Industry Summit in April 2023. While a lot has changed since earlier in the year, inflation remains a top concern. “Everyone was concerned with how inflation was affecting business and asking, ‘How bad will it get?’” noted Rapanick.

NACS, using BLS data and other syndicated sources, determined the actual level of inflation on the categories accounting for at least 85% of sales (for example, salty snacks). This meant, “If you were operating in 2022 and you grew your merchandise sales at a rate less than 9%, then you were probably losing against inflation,” explained Rapanick. Today, that percentage is closer to 6%. Inflation’s impact on foodservice improved as well. Inflation’s impact on foodservice came in at 10.5% in the first half of 2023, down from 15.5% in 2022.

Recent data on fuel sales revealed that fuels’ total sales contribution saw a year-over-year decrease from 75.3% to 71.1%, and total gross profit contribution decreased from 43.6% to 41.7%. Fuel prices settled at about a $3.50 average for the first half of the year, a 14.5% decrease from the same time last year.

“Another thing that we always share at the summit is the store count, and everyone waits with bated breath to see how the store count changes over the year,” said Rapanick. “In the first half of 2023, the total store count grew 1.3%, driven by single stores and large chains. Companies with stores in multiple regions drove much of the E-size chain store growth.”

Rapanick closed out the session with some advice: “Do something to get outside of your company. Benchmark against your competitors, as well as top performers in the industry. Whether you are foodservice-focused or fuel-focused, it’s important to evaluate your competitive position.”

Innovating Your Menu

The first step of becoming an innovator is to never settle, Jessica Williams, founder and CEO of Food Forward Thinking, stated at the “Innovating Your Menu” education session. It involves always looking to improve, no matter how hard or impossible it may seem.

Additionally, Williams said that “success doesn’t come by accident. It doesn’t happen by chance. It’s planned.” She emphasized the need for a formal innovation process and open communication within the team. Innovation doesn’t work as well if only one person understands the process.

Stephanie Hurt, head of food innovation and development at QuikTrip, discussed the logistics of menu innovation.

According to Hurt, menu innovation requires operational innovation. And in order to successfully innovate, she said, you can’t just consider things at the corporate level—you have to look at them from the team members’ perspective.

Recently, Hurt and her QT team went to talk to crew members. “Not the managers, by the way, and they’re great, we all love them,” she said. “However, we really want to talk to the people who are actually doing the work.” After talking to the team and implementing operational changes, QuikTrip saved 16 hours of labor per week, per store.

Say what you do, do what you say ... and prove it.”

Instituting operational change is just one aspect of menu innovation. Tony Sparks, head of customer wow at Curby’s Express Market, stressed the importance of using the data you have to move forward: “It’s not getting the data. It’s not reviewing the data. It’s doing something with the data.”

As an example, Sparks discussed his process of creating the menu at Curby’s. In his research, he noticed the rapid rise of cold beverages and energy drinks, causing him to focus on hand-crafted drinks in his menu.

Curby’s Express Market offers fresh-brewed tea, craft sodas, hand-crafted customizable energy drinks, shakes and various coffee creations. With these offerings, Curby’s beverages make up 38% of sales and continue to grow, said Sparks.

“Menu balancing is more than just food,” said Sparks. It can be beverages, it can be trimming the menu and it can be instituting operational changes.

Williams added, “Don’t be so food-focused that you can’t see opportunities outside of your category.”

The Future of Fuel Retailing

The session “The Future of Fuel Retailing” discussed how fuel retailers need to anticipate the evolving needs of their customers and adapt accordingly. Transportation Energy Institute Director John Eichberger moderated the session and provided some significant background information for the discussion. Gallons are going away, but not necessarily from the most perceived source. He addressed the common messages coming out of the media and many governmental institutions related to electric vehicles compared to reality. For example, surveys show that Americans believe 20% of vehicles in operation are electric. In reality, only 1.5% to 2% of vehicles in operation are electric.

“Electric vehicles are a huge part of the future, and they’re a great tool to be leveraged on this path to a lower environment-impact transportation system,” he noted. “However, they alone are not going to achieve what the objectives are.”

Eric Nelsen, managing director for AlixPartners, added that perhaps 5 to 10% of traditional gas stations will be closed in the next 10 years or so. “It doesn’t matter what’s driving [the loss of gallons],” he said. “It’s still a challenge for you all and you should be focused on how to win in that environment as opposed to being one of those casualties.”

Matthew Dunn, head of mergers and acquisitions at Pilot Company, discussed its approach to the challenge. “It’s about offering the guests quality product—what they’re looking for. We have a loyalty program, we have a mobile app, so we try and engage customers where they are as frequently as they need so that we can let them know what we’re offering,” he said.

Food Safety and the Risks You Can Control

Intentionally managing food safety can enhance your brand and reputation—and protect the customers you serve. During the “5 Food Safety Risks You Can Control” session, food safety and foodservice leaders from La Crosse, Wisconsin-based Kwik Trip discussed how convenience retailers can build the foundation of a food safety program by addressing the top five food safety risks and help mitigate most foodborne illness risks. They also emphasized that with the 2011 Food Safety Modernization Act, focusing on food safety is more important than ever as rules and regulations are rapidly changing.

Dr. Jay Ellingson, chief scientific officer at Kwik Trip, summarized the thousands of pages of the 2011 act (the most sweeping changes in food safety in the U.S. since 1933) with three statements: “Say what you do, do what you say and now, today, you have to prove it.”

The leading five food safety risks are: purchasing food from unsafe sources, improper cooking temperatures, using contaminated equipment, poor personal hygiene (particularly improper handwashing) and improper holding temperatures.

To avoid purchasing from an unsafe source, examine your food supply chain and have a written vendor approval process. Only purchase from reputable vendors, review annual third-party food safety audits, confirm liability insurance and develop a recall plan and verify its effectiveness.

Kwik Trip’s food program began in 2002. That year the company had food sales of $61.5 million, and in 2023 food sales reached $1.4 billion. Christina Hanson, director of foodservice, said of those early days, “Honestly, I felt like we were throwing away more food than we were selling, but we were dipping our toes into the food business.”

“With the growth of our food program, we also had to grow our leadership teams,” Hanson explained. Kwik Trip instituted a layer of Food Service District Leaders who undergo training focused on safely selling food.

Engaging women consumers is not about excluding men, it’s about excluding stereotypes and elevating the customer experience

Improper handwashing is the No. 1 cause of foodborne illness in the United States. Review the most important times to wash hands, such as after using the restroom or handling raw product and allergens. In addition, part of personal hygiene is keeping ill co-workers out of the establishment. Create an illness policy and document when illnesses are reported. In the event of an outbreak investigation, documentation of who was sick, their symptoms and the action taken is required.

Showing the proof behind a food program also includes documenting temperature checks and equipment cleanings.

The best way to grow your food program is to start benchmarking with the right companies and the government, and continually communicate with those groups. Ellingson recommends reaching out to your health inspectors to walk through their expectations and your business model.

“I’m an old baseball guy. By benchmarking, you hit the sweet spot and you’re one step ahead of regulations,” said Ellingson.

The next step in foodservice regulation is active managerial control and tech-enabled traceability, which will become prominent in the coming years.

“Before 2026, every retailer or production facility needs to understand what these new laws and regulations are to mitigate risk for your company,” said Ellingson, in reference to the FDA’s final rule on tech-enabled traceability.

Seasonal Offering Tips

In the session “Growing Baskets with Seasonal Offerings,” category managers gave their advice for capitalizing on these products.

The session began with insight provided by Jason Zelinski, vice president for North American retail at NIQ. Internationally, 21% of yearly fast moving consumer goods (FMCG) value sales occur during eight main international holidays: Thanksgiving, Halloween, Christmas, global New Year, Chinese New Year, Valentine’s Day, Easter and Ramadan.

Data shows that convenience stores don’t see the sales spikes that other channels do around the holidays. However, c-stores still see seasonal surges. Beer sales spike near the Fourth of July and Thanksgiving, for example, including a major spike in beer packages with more than 12 cans.

Zelinski also pointed out that seasonal spikes are not just related to holidays. Depending on customer demographics, seasonality can revolve around sports, school calendars, vacation destinations and more.

The panel consisted of Rebecca Gregory, the center store category manager at Weigel’s Stores; Joseph Bortner, senior category manager at Rutter’s; and Peter Kempton, Jr., senior category manager at TravelCenters of America. They agreed that using data is vitally important.

“It’s like you’re up against the clock, right? You’re kind of gambling with your forecast and hoping that you hit that sweet spot as the last Reese’s pumpkin is sold on Halloween,” said Bortner. “So how we’ve always approached it is using data as the guidelines.”

The panel also emphasized the importance of making the offerings fun for associates—they make it fun for the customers. Gregory described how Weigel’s will have store decoration contests, where the winning store receives prizes.

Being a Safe Store

Being a safe store requires focusing on a variety of things—among them crime deterrence, hazard prevention and food safety—and all are important when making sure everyone in your store returns home unharmed every day.

At the “Creating a Safe Store Environment” small operator workshop, speaker Mark Wells, the owner of LJT Management, reminded attendees that while they may have policies and a plan in place, the key to success is daily enforcement.

Attendees sat at round tables around the room and were frequently given time to converse and collaborate. Wells would pose questions to the tables, and people at them would then talk through issues before bringing what they had discussed back to the larger group.

Discussion started around what a safe store environment is—and what everyone in the room thought were some elements they needed to work on.

One thing top of mind for those in the room was robbery deterrence and prevention, and Wells asked the group to share some of what they’ve been doing to mitigate these issues. Some people shared that they had been working on employee training, making sure employees are never alone and implementing new security systems.

“There’s no better way to train than through experience,” Wells said. He recommended quizzes or simulations such as fake robberies.

Wells said that everyone in the workplace needs to be properly trained on correct procedures, such as how to lift items, and that food safety is a weak spot for a lot of operators.

“My priority for employees is: What is our culture of business?” Wells said. “[It’s] that we care about our employees and our customers and that we have a safe store environment.”

Thriving in a Shifting Fuel Market

Today’s vehicles are more efficient than ever, which is cutting fuel demand along with the current push to decarbonize transportation. The session “Thriving in a Shifting Fuel Market” provided insights on how to maintain profitability at the pump when drivers demand less fuel, and how to leverage low carbon trends. Still, there is plenty of expected demand for energy.

“Gasoline demand is not going up. Let’s be honest about it, it’s going down. But we have a population that continues to grow, not just in the United States, but globally,” noted Denton Cinquegrana, chief oil analyst at OPIS, a Dow Jones Company. “So, we’re going to need energy. I don’t care where it comes from—renewables, nuclear power, fossil fuels, whatever.”

Katie Kline, U.S. south sales manager for Exxon Mobil, expanded on the theme. “Governments are not going to be able to subsidize their way into the emissions reductions that they want to see. It must have consumer support. There’s not one pathway that’s going to get to this energy transition state. What we need to consider is an all-of-the-above approach. There’s no outlook for 2050 that doesn’t include oil and gas.”

From a success standpoint, it was noted that Casey’s fuel sales were up 0.4% in a region where the overall sales were down about 4%.

Nathaniel Doddridge, Casey’s VP, fuels, noted the company prides itself on things that attract people to the stores besides the fuel. “Being able to offer a competitive pizza price against the Papa John’s and Pizza Huts of the world brings traffic to our locations,” he said. “You think about some of your value items like our private label, those things are attracting people in this kind of recessionary environment. We’ve got seven million rewards members. So how do you attract and retain and reward people for coming to your pad? I think those are the things that make the most difference right now.”

Embracing DEI as a Business Imperative

According to Larry Hughes, the vice president of corporate human resources and DEI at 7-Eleven, diversity, equity and inclusion (DEI) should be a “business imperative.”

“Within convenience, nearly two-thirds of customers consider inclusiveness and brand marketing to be important when choosing a store,” he said at the “Building a Culture of Diversity and Inclusion” session.

Kent Montgomery, PepsiCo’s senior vice president of industry relations and multicultural development, said he and his team take a multipronged approach, looking at the impact they can have on people, businesses and the community.

7-Eleven has a three-pillar approach to DEI:

• A culture that embraces diversity

• A diverse workforce where everyone feels included

We really want to talk to the people who are actually doing the work.”

• Community outreach

To help with these three things, 7-Eleven has created a number of Associate Business Resource Groups (ABRGs)—“groups inside of the organization that really focus on the development and progression of folks that belong to certain demographics,” Hughes said. These include 7Hola, which recently hosted Dr. Franklin Chang Díaz, the first Hispanic NASA astronaut, as a guest speaker.

The company has a number of other ABRGs, including for veterans, Black professional women and young professionals.

Hughes said 7-Eleven has only leaned on ABRGs over the last five or six years, but they’ve already become an integral part of the company’s strategy. Recently, 7-Eleven reached out to people to see how the ABRGs are being received, and “82% said they feel more engaged with the enterprise because of their activity inside the ABRG, and we know there’s a straight line between engagement and productivity, and there’s another straight line between productivity and profitability.”

He added that the ABRGs help 7-Eleven maintain a “competitive advantage through our human capital” because, in a time when employee turnover is high, happy, engaged workers stay longer. DEI is so important to 7-Eleven that it’s part of the company’s enterprise strategy, and Hughes said these ABRGs will continue to gain momentum moving forward.

Montgomery said the retention rates he has seen among these affinity groups has been double what he’s seen elsewhere.

“Our affinity groups do a great job recruiting on behalf of our company,” he said. “And there’s nothing better from a recruitment standpoint than to have someone … who’s currently in a company saying this is a great place to work.”

Recognizing Innovative Fuel Retailers

The FMN Fuels Innovator of the Year Awards were presented by Fuels Market News Magazine at a combination award and education session. OnCue Marketing received the award for an operation with under 100 sites and Sheetz for an operation with 100 or more sites.

The convenience retailers were selected for the award based on overall fuel excellence, technology and operational efficiency. The awards were determined by combining the criteria used in the annual OPIS/FMN Fuel Leaders issue that ranks retailers with a core focus on fueling efficiency, plus examining how retailers innovate with fuel products, their use of technology and strategies for EV charging.

A lively Q&A session ensued after the awards were presented. Representatives from both companies were asked how they perceive and promote the energy and fueling offer compared to the other offers that they have inside the store.

“Our company has always had a focus on using the forecourt to get people to come into the main store,” said Scott Minton, director of business development, OnCue. “We want to have a nice, open, inviting forecourt, so we have canopies that cover our customers from the dispenser all the way to the store. We want to make sure everyone feels comfortable going in, but once they get in you have to give them a good experience there as well. And of course we offer a lot of different fuels to get as many people on the forecourt as we can.”

Brian Renaud, director of retail fuel pricing and analytics, Sheetz, gave his company’s perspective. “I’ll just echo some of Scott’s comments,” he said. “We feel fuel is the front door to our business, then you take advantage of our tremendous inside offers. Our customers value both fueling and our inside offer. And now with EVs coming along the way it is, just a diverse product mix across the space.”

Wooing Women to Your Store

Bridget Brennan, CEO and founder of Female Factor, a consulting firm focused on understanding women consumers, shared her work researching women’s purchasing behaviors and the external factors driving them to the store in a Super Session.

“Engaging women consumers is not about excluding men, it’s about excluding stereotypes and elevating the customer experience,” she said. Brennan implored operators to understand the connection between profit and purchasing power—women are responsible for 70-80% of consumer spending.

She notes that, based on her research, 43% of convenience store shoppers are women. She wants to know why that number isn’t higher. “When women participate in a business, a sport or an industry ... it grows,” she said, citing the global fitness industry explosion in recent years. Driven by women, new sectors include studio/boutique fitness, athleisure fashion and wellness and nutrition supplements.

Brennan discussed the four reasons why women buy:

• Societal and family roles

• Time and money

• Cultural relevance

• Health and safety

She noted a cultural shift from “Where can I buy it?” to “Where do I want to buy it?” How can operators incorporate what women want with how best to give it to them? Brennan explained her Four Motivators Framework, a formula for driving an emotional connection and winning women’s business.

1. Connection:

Women want to feel connected with the brand, the store and the associates. More women are looking for services over products, so how is your business helping her check off her to-do list?

2. Inspiration:

“Inspiring is the new selling. Nobody wants to be sold.” Brennan explained that women want to feel inspired to stop, shop and buy. Are you making shopping easier for her by bundling products or offering new ideas? Does she feel inspired to come in because the exterior looks well-maintained, clean and safe? If a woman can feel safe, she can feel inspired.

3. Confidence:

“Women want to feel confident they will have a good experience,” she said. Does your store make them feel confident that they will have a good experience? Brennan specifically noted that good lighting inspires confidence.

4. Appreciation:

Brennan lauded the “underappreciated art of appreciation” as a significant factor in driving repeat business. Frontline associates can welcome women into the store, initiate conversations and thank them for their business.

Making a Profit Selling Charging

The market for electric vehicles continues to expand, creating increased demand for publicly available EV chargers. The session “The Business Case for EV Charging” dove into the realities of charging economics with insights that can help retailers realize a profitable return on investment.

“Don’t underestimate the amount of learning that needs to happen. Everybody in your company has to go through their own learning process,” said Scott Shepard, director, EV program research, Center for Sustainable Energy (CSE). “There’s a lot that you can do with data to help tailor your program to make sure you’re optimizing takeaways. Using transaction data to understand the relationships and what users need is key.”

Data aside, applying the attention to detail and customer service that you are already providing to the conventional fueling customer to an EV customer is beneficial.

“Our philosophy at Parkland has been that EV charging is more than just a plug. I think everybody in this room recognizes that a gas station is more than just a fuel pump,” said Scott Sharabura, vice president, EV charging, Parkland Corporation. “Having strong amenities, a great bathroom, great food, safe lighting, great easy access, location—things like that. We’ve been trying to recreate that for EV drivers as well.”

He noted that Parkland has been putting in lighting to continue that safe environment, and canopies to protect the EV driver from sun and rain. EV drivers also provide some special opportunities. “People are there longer than fuel customers would be,” Sharabura said. “They’ll be at your site for 20 to 30 minutes. It’s a great opportunity for retailers if you have a captive customer there for 30 minutes.”

First slide

Chris Rapanick delivered an update on the industry’s financial report card.

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Innovation is about much more than new flavors, the “Innovating Your Menu” panel agreed. It’s also about better operations.

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How should retailers adjust to gallons going away was a theme of “The Future of Fuel Retailing.”

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The panel discussing seasonal offerings agreed that seasonal displays are a great way to engage associates.

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Overall demand is going down but operators still have opportunities, according to the “Thriving in a Shifting Fuel Market” panel.

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The FMN Fuels Innovator of the Year Awards recognized OnCue and Sheetz.

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During a super session, Bridget Brennan described how wooing women to a store helped attract more men, too.

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How can c-stores best profit from EV drivers? “The Business Case for EV Charging” dove into challenges and opportunities.

Leah Ash

Leah Ash

Leah Ash is an editor/writer at NACS and can be reached at [email protected].

Shannon Carroll

Shannon Carroll

Shannon is a former contract writer/editor for NACS.

Lisa King

Lisa King

Lisa King is the former managing editor of NACS Magazine.

Batya Levy

Batya Levy

Batya Levy is a former editor at NACS.

Keith Reid

Keith Reid

Keith Reid is editor-in-chief and editorial director of Fuels Market News. He can be reached at [email protected]

Emma Tainter

Emma Tainter

Emma Tainter is the NACS research analyst/writer. She can be reached at [email protected].

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