MIDDLETON, Wis. -- Kwik Trip Inc.’s pending acquisition of the PDQ Food Stores chain of 34 convenience stores in southeastern Wisconsin represents the joining of two well-respected c-store enterprises.
- Kwik Trip, La Crosse, Wis., is No. 15 in CSP’s Top 202 c-store ranking for 2017; PDQ, Middleton, Wis., is No. 174.
Dick Meyer was executive vice president and CFO of PDQ Food Stores Inc. and Pick Kwik Food Stores for eight years. CSP asked the 40-year industry veteran to share some of his reflections on the transaction.
“This deal fits like a glove,” said Meyer. “I am thrilled with this great marriage of quality companies and people cultures. It made sense for these two low-profile Midwestern chains to combine their strategic marketing prowess and reputations. It’s a win-win for this combined synergy.”
Here are a few of Meyer’s observations on the Kwik Trip-PDQ deal:
- One of the best things Kwik Trip is getting is some of the investments PDQ made in the prime areas of Milwaukee that Kwik Trip couldn’t enter because PDQ was too dominant.
- Kwik Trip and PDQ both built solid stores on spacious sites that are operated by passionate store management and supported by meaningful market-basket-type technological tools.
- Both companies have lower-than-average turnover in operations, enviable compensation packages and bonus arrangements keyed to their employer’s profits performance. And PDQ has its share of pride as an employee-owned company.
- I’ve always looked for what I call “common denominators” of successful companies—best practices—such as when you see Kwik Trip repeatedly winning mystery shop of the year.
- And Kwik Trip has an enviable, efficient system of distributing to their stores every day.
Meyer attributed much of his own success to the lessons he learned from PDQ’s founder, Sam Jacobsen. He said he was "confident Sam would be happy to realize that his ‘survivor’ students realize the value of his wisdom.”
Jacobsen opened his first store, under the Tri Dairy name, in 1948 in Middleton, Wis. He opened the first c-store to fly the PDQ banner in 1962. In 1977, through multiple acquisitions and new builds, Jacobsen had grown PDQ (and then Pick Kwik) to a company of about 150 c-stores operating primarily in Wisconsin, Minnesota, Colorado and Florida.
Here is a sampling of the lessons Meyer said he learned from Jacobsen, or his “favorite five”:
- Don’t reinvent the wheel. Sam revered his confidential Figures Exchange group, which may have been the first retail share group in the c-store industry. The top executives of this group of noncompetitive chains would get together about twice a year to analyze per-store metrics, tour area c-stores and debate best practices for their stores and organizations.
- Negotiation tactics. Do your homework so you achieve a fair and informed deal and “leave something (economic or otherwise) on the table” that is evident to the other party. Jacobsen believed that such goodwill would be respected by honorable parties.
- Sleep on big decisions and “trust the Constitution.” When PDQ hit a brick wall on a business or related issue, Jacobsen "encouraged us to sleep on the matter or to read the Constitution, which he proudly had in bronze on his office wall." He felt that after doing so, “common sense” would help trigger the best solution.
- There is no such thing as a “free” lunch. That needs no explanation, especially to c-store foodservice operators.
- Have fun! Jacobsen loved a good laugh. "There were many times that we’d say something goofy during a weekly meeting or when visiting competitive stores. Instead of questioning the person’s sanity, he’d shrug off the incident with a big laugh followed by his query: How many stores do we operate?"
More observations from Meyer:
As I learned in my business experiences, it’s one thing to create admirable policies. It’s another to translate these principles into practice. The following were a few action items in response to Jacobsen’s “common-sense” objectives:
- Give back to the industry. Sam was one of a dozen or so co-founders of NACS and one of its early presidents.
- By-store P&Ls. I suspect, somewhat pushed by Sam’s original Figures Exchange share group, as well as his own hunger for store managers’ awareness of business trends, PDQ was one of the earliest chains with bottom-line accountability of controllable income from store managers.
- Metrics benchmarking. Before personal computers, and when available reports were limited in substance compared to today’s more dynamic analytics, PDQ searched for credible companies’ per-store trends to aggressively crystallize opportunities where we missed exceeding the “average” or known top 25% performers’ results.
- Close “dawg” operations. The hardest lesson to address, but one that had the most significant effect on PDQ’s financial strength, was when we ranked the chain’s stores by volume, profitability and ROI, then closed or sold underperforming stores.
"While I conclude these thoughts about my first mentor in this wonderful industry, I admit that the Kwik Trip acquisition of PDQ triggered a lot of special memories." Meyer told CSP Daily News. "It’s comforting to move behind the curtain and be thankful for so many mentors that shared their wisdom and support to me over four decades. Thanks to Fred, Bill, Drayton, Jack, Rex, Greg, Paul, Bryan, Lyle, David and so many more industry founders that Sam introduced me to, who allowed me to learn from their experiences and trust in this kid from Jersey.”
A “Big 8” CPA (KPMG Peat Marwick) by background, Dick Meyer has 40 years in the c-store industry, including CFO and executive vice president of PDQ and sister company Pick Kwik Food Stores; president of ProfiMax; co-founder and partner of C-Store Xchange (CSX); and president and owner of Meyer & Associates, which provided executive-level strategic services for suppliers, retailers and investment managers to the industry. He also was a member and chairman of the NACS Suppliers Board. Contact Dick at [email protected].