Is CST the Next Foodservice Powerhouse?

Adding new program to at least 20 new-to-industry stores in 2016

By 
Kristina Peters, Associate Editor, CSP

CST Corner Store foodservice

SAN ANTONIO -- Early results indicate CST Brands Inc.'s new made-to-order food program is a success.

CST adopted the program from its 2014 acquisition of Canastota, N.Y.-based Nice N Easy Grocery Shoppes, and implemented it in five San Antonio stores in November and December.

“The program has quickly moved the higher-margin food mix in these stores to more than 30% of sales,” said Hal Adams, president of retail operations for San Antonio-based CST, during the company’s year-end and fourth-quarter earnings call on Feb. 19. “We’ve been very encouraged with the success we’ve had.”

  • Click here to view a report on CST's fourth-quarter and full-year 2015 financials.

So much so that Adams said CST plans to add the made-to-order food program to at least 20 additional new-to-industry (NTI) stores in 2016.

The increased focus on food also extends to CST’s grocery program, which currently is in 100 stores.

“Based on the success of this project and the needs of our customers for grocery fill-in items to complement their milk, bread and egg purchases, we will have expanded this to another 100 stores” by the end of 2016, Adams said.

CST expects to open 45 to 50 new stores in the United States, including two in Georgia, and 10 to 15 new stores in Canada during 2016. Kim Lubel, president, chairperson and CEO, said these new stores have a “much larger footprint” that will accommodate broader food offerings and an expanded fuel island.

“We continue to look for other opportunities to increase shareholder value,” Lubel said during the earnings call. “We plan on continuing to refine our operational platform, including our made-to-order food and grocery program, and we will continue our efforts to lift our overall sales and margins.”

CST has approximately 1,900 convenience stores in the southwestern United States, New York and eastern Canada offering a broad array of convenience merchandise, beverages, snacks and fresh food. In the United States, CST Corner Stores sell fuel and signature products such as Fresh Choices baked and packaged goods, U Force energy and sport drinks, Cibolo Mountain coffee, FC Soda and Flavors2Go fountain drinks. In Canada, CST is the exclusive provider of Ultramar fuel and its Dépanneur du Coin and Corner Stores sell signature Transit Café coffee and pastries.

CST also owns the general partner of Allentown, Pa.-based CrossAmerica Partners LP, a master limited partnership (MLP) and wholesale distributor of fuels.