NEW YORK -- Diane McCarty directs a modest-sized Texas chain founded by one of the convenience industry's venerable luminaries. Amer Hawatmeh leads a Tampa store with street-smart savvy and a penchant for the latest technology. And Ramzi Khoury runs a family store in Rhode Island that features a much-appreciated drive-thru.
Three operators. Three approaches. Welcome to the world of independents, an eclectic collection of old-school shopkeepers, trailblazing entrepreneurs, foreign-born idealists and multi-generation, industry-wise operators.
Presenting in a CSPNetwork CyberConference program called How To Sell To Independents earlier this week, McCarty, Hawatmeh and Khoury shared their stories and the challenges they confront as small players competing in neighborhoods replete with big-box magnates. Their audience included some three-dozen suppliers and wholesalers seeking to better understand the world of independents, a community of latchkey retailers that make up 60% of the convenience channel.
McCarty is president of the 15-store Lone Star Food Stores of Sherman, Texas, a division of Douglass Distributing founded 25 years ago by her father, recent NACS chairman Bill Douglass.
She talked of how being a small operator differs from being a large operation with ample resources. First are the multiple tasks independents must bear just to function day to day.
I handle vendor relations, in addition to being president, marketing director, pricing coordinator, QSR queen, fill-in manager and whatever comes my way, she said. I think that's how many small businesses work. We're not some Wawa or huge organization, so we all wear a lot of hats.
As for the role vendors can play with independents, McCarty said smaller operators like her rely on suppliers and wholesalers to provide key market data on product movement and keep operators abreast on competitive issues.
Other key points she offered:
Communication: Vendors should use email and voice mail to communicate most of their messages. And in-person pitches should run no more than one hour. We are pretty time-starved. We appreciate short and simple presentations. Loyalty: I think we are a good group of people to do business with, but it does require extra work. If you give up the time, you'll actually find we're a very loyal bunch. We don't have the time or the interest to constantly change suppliers Once we make a dealI've been with the same coffee people for eight years, the same pest control company for almost seven yearswe're a lot easier to get along with than Wal-Mart, even if we don't provide the same business value as Wal-Mart does. Personal Touch: To improve chances of winning space, McCarthy encouraged vendors to pursue meaningful relationships through sampler bags or retailer charity event donations. If you scratch my back I'll scratch yours. Contracts: I wish contracts would be a little less heavy on how much space I give you. Instead of space, push for strong in-store promotions, McCarty said. Also, she urged vendors to offer refundable/returnable offers on new product introductions. I do prefer pick-and-choose elements, she said. Sometimes in the past, contracts were you must do these 10 things or we cannot do a contract with you.' It's better to get some of our business than none of it.Both Khoury and Hawatmeh talked about their experiences of building business and the challenges they face.
One thing we are unable to compete on is the cost of goods, said Khoury, who operates Engine FoodLane with his wife, Ann, in North Kingstown, R.I. Our cost is going to be quite higher than everyone else. To remain competitive, your profit margin is almost nil on some items.
While Khoury may not be able to match supermarkets and mass merchants on price or promotions, his store offers a strong single-serve snack line and a strong tobacco presence that features Cigar Cabana and a super-premium cigarette offer. He also offers a drive-thru service that generates about 10% in total sales. Even though tobacco is shrinking a little bit [nationally], we decided to expand it, he said.
The Khourys, who have nearly 15 years of c-store experience, took over a former XtraMart store in July 2004, transforming the 1,800-square-foot outlet into the Engine FoodLaneEngine as the fuel brand and FoodLane, the store. We developed a concept built on customer feedback, customer complaints and customer necessity.
Hawatmeh, who was weaned on oil changes and was Shell Oil's youngest dealer, talked about his experience as president of Coast to Coast convenience center. The 2-acre lot features a 4,500-square-foot store, including a proprietary Quick Caf, a fuel island with 12 MPDs and a tunnel wash capable of cleaning 100 cars in an hour.
Hawatmeh is about big offers and the most sophisticated technology retail has to offer. Today you've got independents using their experience and know-how and stepping up to marketing groups and designing groups developing concepts like Coast to Coast.
Speaking of his approach, he said, Technology is very important to me. You've got to keep up with tomorrow.
Specifically, Hawatmeh's unit features biometric payment, coupons at the pumpWe're trying to sell them car washes, we're trying to entice them to buy in the storedigitized signage and a touch-screen prepaid unit that offers a wide array of phone cards.
Speaking directly to the vendors in the conference, he urged a relationship based on mutual respect and mutual need. It's important we partner up with you folks, he said. We cannot exist without each other. We, the retailer; you, the vendor.
To view an OnDemand broadcast of the How To Sell To Independents CyberConference,click here.
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