CHICAGO -- Emil Brolick, COO at Yum! Brands, the world's largest QSR portfolio with iconic brands such as KFC, Long John Silver's, Pizza Hut and Taco Bell, faced a daunting challenge at a leadership session at the NACS Show last week. The highly successful businessman who has endured the vicissitude of retailing and fast food, tackled what many are calling the worst economic slump in the U.S. since The Great Depression.
But while acknowledging the obvious, Brolick (pictured) sought to transcend it. "It's times like this where survival seems like a victory," he said. "But we should have [image-nocss] loftier goals than survival.… I'm personally very optimistic about growth."
Brolick, who presented along with Sam's Club executive Michael Heintzman before they joined a larger retailer panel, cited the similarities connecting his world of QSRs with that of his attentive c-store audience: the on-the-go consumer, strong franchising commitments, the relatively low transaction ring, the total scale of each industry—QSRs at $510 billion, convenience stores at $600 billion. Indeed, he could have added high-turnover store employee rates and the need for value propositions, as well.
Nonetheless, once the connection between him and the audience was forged, Brolick sought to engage his listeners to avoid the traps that cut into the success of Kmart, Sears, Circuit City and other retail giants. "Too often we fall in the trap of focusing on things we have no control," he said, like weather and competition. "The only way to predict the future is to invent the future."
Brolick urged all operators to build a store identity, not just a retailing outpost. He then followed with a litany of powerful retail names, such as Best Buy, Target, Toyota and Costco, as "incredible brands."
"The reality is we're competing for the consumer's mind," he said. "[We need] to create and build a brand identity…not just sell products.… The marketplace has clearly taught us sameness is the death of brands."
NACS president and CEO Hank Armour moderated the followup executive panel discussion that featured Brolick; Heintzman; Kum & Go president and CEO Kyle Krause; Stripes LLC president and CEO Sam Susser; Nichole Torsey, president of Mt. Counties Supply Co.; and Fiona MacLeod, BP's president of convenience retailing in the United States and Latin America.
Of the economy, retailers represented both micro and macro markets. For Susser, who caters to a large Hispanic base near the Mexican border, the harsh economy has not ripped through his region. "The need for convenience is strong," he said, though adding, "We're very sensitive to price points."
Susser drew laughter when the conversation moved toward health trends. Susser quipped he took his customers' appetite need to heart—the need for high cholesterol, greasy, bad-for-you menu items.
Offering a broader, cross-country view, BP's MacLeod said, "It's definitely a challenging period, but it's also a period to thrive through."
She pointed to the importance of BP's decision to embrace a single-brand U.S. retailing strategy around ampm. "What is it we stand for and really to stick to that." Adding that one can't be all things to all people, she continued, "We're not trying to be a sit-down restaurant or a grocery store."
Armour asked the panel members whether they were witnessing the so-called new customer or the same old customer perhaps with some new needs.
"I don't see signs of big consumer changes yet," Susser said.
"People are perhaps coming in less, but the basket size is holding up," said MacLeod, noting that patrons are pursuing more value deals.
On the issue of so-called health trends among consumers, Brolick was effusive, especially about the 18-24-year-old population that he sees as much more health concerned. "There is absolutely no doubt about it," he said. "We're working to offer lower fat, lower caloric [menu items]."
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