The newest Open Pantry convenience storeits fourth in Brookfield, Wis."sparkled" at its August grand opening, said the report. Human-size coffee cups danced in front of the doors to promote the company's upscale coffee line, Willow Creek. A cozy lounge area invited VIPs to sink [image-nocss] into its overstuffed chairs and take advantage of the free wireless Internet, but most were eager to line up for goodies such as free deli sandwiches and 25-cent smoothies offered in eight flavors.
Buhler bought Open Pantry from his father, Robert W. Buhler, 14 years ago. The younger Buhler has revolutionized the 44-year-old company's image, turning it from a franchised network of typical c-stores into an innovator in design and product offerings targeting middle- and high-income customers, industry experts cited by the newspaper said.
Buhler sees growth for the company in the future, he told the Journal, though he hesitated to make detailed predictions. The Pleasant Pairie, Wis.-based company employs about 400 people at its 27 locations, most of which are in Madison and southeastern Wisconsin. After opening one store this year, he plans to open two to five next year. He said that he is also working with potential equity partners who could help Open Pantry grow, possibly by acquiring other chains. The company recently incorporated the name Open Pantry Chicago and is interested in expanding into northern Illinois, he said.
Buhler, who lives in Lake Forest, Ill., left a 17-year career in investment banking to run Open Pantry so he could spend more time with his family, he told the paper. At the time, the company had a jumbled identity.
He tried to enact programs to improve the company's image, but found little interest among the 38 franchises, he said. So he started buying back select locations and allowing other locations to exit the franchise. Today, the company owns 27 stores, only a handful of which were part of the company when Buhler took over, he said.
At the same time, Buhler studied best practices, not just in c-stores, but also in successful restaurant chains such as Starbucks Corp., Panera Bread and Potbelly Sandwich Works. He hired Jim Fiene, an experienced c-store executive, as senior vice president and later made him COO.
"We started to try things, including the colors, the paintings, the coffee bar, the fireplace," Buhler said.
An important part of the plan was Willow Creek, Open Pantry's coffee brand, and a relaxing environment that would encourage customers to stay and sip.
The company opened its first prototype of the new model seven years ago in Brookfield.
Open Pantry has created its own niche by appealing to high-income customers, Angel Abcede, senior editor for CSP magazine, told the paper. "Many of their newer stores are located in suburban growth areas, places that would attract someone interested in more gourmet coffees [and] potentially more of a variety of taste and flavors with foods, someone who might not think twice about a bigger spend."
The company has nailed the concept of tailoring its stores to the needs of the neighborhood, Abcede added. For example, the company worked closely with Marquette University on its store in Milwaukee, Buhler told the paper. The 7,200-square-foot space has special offerings for students such as a burrito bar, enlarged grocery section and beer cave. A lounge area in the corner offers public computers, a fireplace and flat-screen TVs. The floor is modeled as a basketball court, and Golden Eagles gear decorates the walls.
Recently, Open Pantry has brought more customers inside through its giveaway program, the report said. This summer, it started offering free water with a gasoline fill-up, and customers now get Keebler crackers with purchase of a fountain drink, said Buhler.
The success of Buhler's model is demonstrated by Open Pantry's growth in recent years. Same-store inside sales have increased just under 10% in each of the last five years, Buhler said. Gallons of gasoline sold has increased by more than 10% this year. The company posted more than $150 million in revenue in 2008, Buhler said. Revenue was down in 2009 because of a sharp decline in gasoline prices, but gasoline sales in gallons were up.
(Click here for previous CSP Daily News coverage of Open Pantry.)
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