After the company's annual meeting in Cary, N.C., Marks sat down with the News & Observer to answer some questions:
Q: You've been leading The Pantry [image-nocss] for about six months now. How's it going?
Marks: It's clearly a tough environment. The Southeast has been hit harder than the rest of the country, and you see that in not just our data but industry data. But there's tremendous opportunity, and I'm more excited than I was when I came here.
Q: Can you tell us any more about the on-the-go food pilot program?
Marks: We're going to go live in the Charlotte market in [the company's] third quarter.
Q: Are those the Petro Express stores? You've previously said you will convert all of the Petro stores into Kangaroo stores.
Marks: Yes, it's an opportunity to be really efficient with the construction. It's about 60 stores.... We will begin work in April, and we'll have some number done in May. We'll have the majority of them done by the end of the summer.
Q: What exactly will change?
Marks: We're contemporizing our logo and our graphics. We're making changes to the inside of the store to make it brighter and more contemporary. And we want to improve our coffee offering, and that should be evident.
Q: When do you think the program may expand outside of Charlotte?
Marks: We're not ready to say yet which market will follow Charlotte. But construction will begin almost sequentially. In fact, construction in the second market will probably overlap [construction in Charlotte] by about three weeks. By the end of the summer, we'll be moving.
Concerning foodservice, Marks recently told CSP Daily News, "Overall, it's fair to say that many of our stores could use a refresh; however, we believe a refresh is not enough. Our convenient locations present us the unique opportunity to meet the needs of our increasingly time-starved customers by developing more comprehensive, on-the-go meal solutions focused on specific occasions, such as breakfast, lunch and snacks."
He added, "Frankly, we're doing a poor job of capitalizing on this opportunity."
Marks said the company is planning two initiatives to overcome this shortcoming. First, over the next year, the chain will add 25 new nationally branded foodservice locations to its store base. "Subway will comprise the majority of these additions," he said. "This represents a significant acceleration from last year, during which we added 10 new locations to existing stores."
Second, The Pantry will develop store reimaging concepts that feature broader foodservice offerings. "We will pilot, monitor consumer response and refine accordingly," Marks said. "Once comfortable that we have a winning formula, we will move quickly to commercialize [and expand the offer]."
He added that convenience, value and variety will drive the development of the new food options.
"Consumers...don't want to have to choose between convenience and something that's good for them. The other variable that's come into play recently...is the whole value aspect," Marks said. "So our principal focus area initially is going to be around things like sandwiches, wraps, fruit, fruit plates, things that don't require a lot of additional in-store labor. We're looking to do this across the overwhelming majority of our store base."
These products will likely be self-branded and work as an addition to The Pantry's current nationally branded programs. The company has budgeted $50 million in 2010 for store maintenance.
Headquartered in Cary, N.C., The Pantry is the leading independently operated convenience store chain in the southeastern United States and one of the largest independently operated c-store chains in the country. As of Feb. 2, 2010, the company operated 1,655 stores in 11 states under select banners, including Kangaroo Express, its primary operating banner.
(Click here for previous CSP Daily News coverage of Marks, including a special two-part "Focus on The Pantry.")
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