The Pantry Caters to Various 'Lifestyles' in New Initiative

Kangaroo Express focuses on Hispanic, college, beach communities first

Steve Holtz, Editor in Chief, CSP Daily News

CARY, N.C. -- Executives at The Pantry/Kangaroo Express convenience stores aren't offering too much detail, but a new "lifestyle" merchandising program is opening the door to store differentiation and, so far, increased profits.

Cary, N.C.-based The Pantry has "identified nine different lifestyle local merchandising needs," according to president and CEO Dennis Hatchell. So far, it has enacted three of them--Hispanic, college and beach--in numerous stores to drive the sales of products specific to relevant markets.

"The early results of this initiative are positive, and we are pleased with the progress we are making," Hatchell said during a first-quarter earnings conference call on Tuesday.

The Hispanic platform is now in 130 locations, college is in 120 locations, and the beach is installed in 47 locations.

"We have plans to add another 56 Hispanic locations in the month of February, and we will continue to rapidly add more locations to all lifestyles as we remodel or reset our stores," Hatchell said.

The Pantry is remodeling 70 to 80 stores a year, and many of those will become part of the lifestyle initiative.

As an example of how the lifestyle program works, vice president and controller Berry Epley offered this description:

For beach stores near the beach, "we carry the usual drinks and food that you might take to the beach, but the general merchandise, the stuff you use in the water, the surfboards, sunglasses, that sort of stuff, we didn't have a good mix of product in those stores to offer up to the folks. That's what's being prepared right now to get out to the stores."

The idea is the same for stores in predominantly Hispanic markets or in college communities.

"Part of it is our ability to source it fast and get it in. McLane's been a big help to us there," Epley said. "And then it's figuring out which stores should get it, because you've got to make room or delete some of the catalog items that aren't performing."

The executives wouldn't offer other details "because we think it is a competitive advantage right now." They added, however, "We're accelerating the rollout of these lifestyles as we go so you can read into that that the performance is good."

The Pantry is a leading independently operated convenience store chain in the southeastern United States and one of the largest independently operated convenience store chains in the country. As of Feb. 5, 2013, the company operated 1,571 stores in 13 states under select banners, including Kangaroo Express, its primary operating banner.

Steve Holtz, CSP/Winsight By Steve Holtz, Editor in Chief, CSP Daily News
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