"We sell a couple hundred thousand food items per day, and the No. 1 item we sell is tacos," he said, adding that proprietary "made from scratch" foodservice is a big differentiator for the company.
There are currently 267 of the company's proprietary Laredo Taco Co. restaurants built into Stripes [image-nocss] convenience store locations. And while the industry standard for gross profit for food prepared on site is 13% of gross profit, Susser boasts a 17% "disproportionate concentration," according to Susser. Foodservice accounted for $71 million in sales in 2006, and now accounts for $162 million.
One reason for the success is that the food is prepared in front of the customers. "We've come to believe that consumers just don't wake up in the morning and say, 'Gee, I want to eat at a convenience store today.' We are not the trusted place for food, and we had to get the cooking out in front of the customer where our customers could see who was making the food and the quality of the food and see the authenticity of the food."
He said that when you walk into a Stripes store with the Laredo Taco offering, it can be a "feast for the senses," with positioning right next to the sales counter allowing customers to smell, hear and even feel the steam from the food. "All of your senses are triggered by the way we execute our food program."
In describing the tacos, he said, "It's great food, great quality and it's guaranteed to make you thirsty. Our food is spicy, and that's by design. That's the way our customers like it, and it helps drive drinks and snacks."
Susser said that 72% of customers that buy a food item from the restaurants buy something else, and that their most common purchase is beverages, which have a higher margin. "So the collected ring is really profitable for us and drives our business strategy."
The foodservice strategy is also part of Susser's overall strategy of becoming less reliant on cigarettes. Susser also compared his company's annual merchandise sales per store to The Pantry and Casey's. The company had $1.48 million in merchandise and foodservice vs. $958,000 at Casey's and $1 million at Pantry. Of Susser's sales, 22% came from cigarettes, compared with Casey's 29% and The Pantry's 34%, he said.
He also shared some of the company's upcoming plans: Five new stores have been opened year to date, seven are under construction and there are 24 sites in the company's landbank. The company will pursue strategic acquisitions in existing and contiguous markets. Susser's will leverage years of investment in information technology. The company will continue to leverage Susser's increasing purchasing power. Store personnel and leadership team skills will continue to be improved upon with "relentless" coaching and training, using a balanced scorecard framework. Susser also commented on the future of c-stores in general, saying that the building of more Walmart supercenters will have a positive impact. "We think that the Walmarting of the economy is a very positive trend for convenience."
He said Walmart stores force grocery retailers to build bigger stores, that require more time to shop in. ""And that creates kind of a fill-in opportunity for those that operate at the other end of the spectrum of retailing, which is where I believe convenience stores live. I firmly believe that the need for convenience is going to be greater in the years ahead."
In other company news, Stripes and the Texas 4-H Youth Development Foundation have announced a 4-H fund raising alliance in selected Texas cities, reported The Llano News. The effort called "Helping Today's Kids Become Tomorrow's Leaders" will run from September 6 through October 3.
To participate, Stripes customers in Wichita Falls, San Angelo, Midland, Odessa, Lubbock, Victoria or Houston can buy a 4-H cutout or "mobile" for $1. All the proceeds from the mobiles sold will be donated to the local county 4-H program in the city where the purchase was made.Corpus Christi, Texas-based Susser Holdings is a third-generation, family-led business that operates more than 520 c-stores in Texas, New Mexico and Oklahoma primarily under the Stripes and Town & Country banners. Restaurant service is available in more than 300 of its stores, primarily under the proprietary Laredo Taco Co, brand. The company also supplies branded motor fuel to approximately 385 independent dealers through its wholesale fuel division.
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