"Our industry was assaulted by McDonald's last year, when it started heavily promoting its coffee program, and we saw some sales declines in that area," said Gary Tabor, director of marketing [image-nocss] and sales with Pak-A-Sak Inc., Portland, Ind., a 35-store operator who has Indiana and Ohio sites on the fringes of SSA's markets. "Now SSA is letting that coffee consumer know there is a good, affordable coffee offering available at Speedway locations, but that kind of advertising spreads a good message for our industry as a whole."
But as SSA sees it, foodservice is still in its infancy. "From an evolution standpoint, it's fair to say we rented out the food program before we realized, 'We have our own real estate, let's consider doing our own private-label'," Grant Heminger, vice president of marketing, said in an exclusive interview with CSP Daily News. The retailer had partnered extensively in the past with QSRs such as Blimpie and Subway, at one point with 150 such locations, but has since whittled those company-owned and -operated sites down to 20.
As its latest statement in private-label foodservice, SSA is rolling out pizza to many of its stores in 2010. Sold by the slice or as an entire 12-inch pepperoni pie, the pizza illustrates the complexityand promiseof expanding foodservice in a retail chain that, because of its acquisition past, has some 800 different formats.
"We have many different store formats, but having an on-site construction group, drafters and designers, and a standards group is very important to us," said Heminger. "We can cut and paste what we want and see how many stores that will work in, and then we have to go fight for that capital to make it happen. We have built fewer stores in favor of rolling out more food programs."
SSA's operations planning group was involved from the program's conception, assisting with time-and-motion studies, equipment selection, labor requirements and roll-out logistics. Between January and May 2009, four food trainers performed in-depth training for all 1,600 SSA store managers and 165 district managers.
"You have to roll a food program out to 800 different footprints in 1,600 stores, you can only imagine how hard this is, especially to get it in a premium position," said Glenn Plumby, vice president of operations. He credits an SSA marketing employee who devises all store plan-o-grams.
"As far as I'm concerned, his job is more important than mine," said Plumby. "When we look at what goes inside the store, when you have so many different footprints, it comes down to math. What's the right thing to put in the stores? What's going to drive sales? What's going to drive margins? We're looking at those equations very hard right now to make sure we upgrade square-footage profitability wherever we can."
SSA's success, whether it be in foodservice or another category, is all about preparedness, said Rich Haen, senior vice president of sales with Eby-Brown LLC, Naperville, Ill., SSA's wholesaler for the past 15 years.
"You can go out and tell anybody to build a pizza program; you're going to get 100 stores doing it 100 different ways," said Haen. "But they've built programs and expect the operations folks to follow step-by-step to make it executable. They've got to have a plan, and have the direction to execute the program."
Eby-Brown's Springfield, Ohio, commissary supplies the food to most of SSA's Midwest stores, save the Minneapolis market, which is served by SuperMom's, an SSA-owned commissary and bakery. Eby-Brown distributes SSA's 7th Street Deli to regional branches of its distribution network and then delivers to stores on a twice-a-week basis.
Foodserviceand in particular, consistency of executionis where SSA sees its opportunity as other major oils move out of company-ops and retail in general.
"Anything we do, we'll do wellor we won't do it," said Heminger. "But if we're going to do it and commit funds to it, we're going to do it well."
Read about the other areas of the c-store business that are earning SSA's investment dollars in the March issue of CSP magazine. Also be sure to watch this week's exclusiveCSPTV feature on SSA's Tony Kenney.
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