Despite pressures on core categories and other competitive challenges, Steve Loehr, the incoming chairman of NACS, has unabashed optimism about the c-store industry, believing that the channel is staying relevant as its core demographic changes.
In an interview with CSP, Loehr, vice president of operations support for La Crosse, Wis.-based Kwik Trip Inc., talked about what he sees as the industry’s greatest hurdles, but he also expressed faith that operators are making active choices to overcome them and thrive in a new environment.
Q: Can you share your thoughts looking ahead to your upcoming role as NACS chair?
A: These are exciting times. The c-store industry is evolving and more vibrant than ever. For me, growing up in a family of seven kids with my dad running a small grocery store and meat-processing business, I learned the value of hard work and customer service. And today, that’s what our industry is all about: customer service. It’s awesome and humbling at the same time to represent NACS for the year but also represent our 13,000 co-workers at Kwik Trip.
Q: What do you see as the main challenges facing the industry in 2015?
A: We face continued fuel-volume destruction due to renewable-fuel standards. We’ve relied on gas gallons growing every year, but it’s a different paradigm now. Then there’s the continuing battle on credit-card fees and, overall, a plethora of new government regulations—especially the impact of Obamacare (the Affordable Care Act) on the industry.
Q: But you seem more interested in the bright side of things.
A: Again, going back to vibrancy: More c-stores are getting into healthier foods and getting out of just selling beverages and cigarettes. It’s a great opportunity to sell non-traditional things, healthier things that are blurring the lines between supermarkets, drug stores and dollar stores. For example, Kwik Trip just [started a] fresh-meat program. It goes along with our work with Partnership for a Healthier America and developing healthier foods to sell.
Q: You refer to channel blurring. Many consider that a threat. Do you?
A: Four or five years ago, McDonald’s started selling mochas and lattes. ... [Decisions like that] help c-stores ... because it broadens the market appeal for those products and the category. It makes more people aware of these drinks and we as c-store operators can jump on that. [At Kwik Trip], we’re installing those same mocha and latte machines. Our challenge is to be aware.
Q: So you see a bigger vision. Can you explain further?
A: It’s not just [c-store] customers; it’s retail customers we have to get. They’re going to the drug, dollar or Walmart with their smaller-format stores. And especially the newer, younger customer and female customers. They’ve been looking for these things for many years—convenience, quality, healthier products—but didn’t find it in our industry. I never though 24 years ago we’d be selling 45 million pounds of bananas or have a fresh-meat program. Or start selling mochas and lattes. Our consumer is changing; their needs are changing, and we have to stay relevant to them.
Q: How do you feel NACS is positioned to help the industry?
A: NACS’ mission statement about knowledge, connectivity and advocacy is right on the mark. NACS can provide knowledge c-store operators need to run their businesses better. And with connectivity, they can create relationships with suppliers ... to improve their stores. And with advocacy, we need a spokesperson in D.C. There’s more and more regulation to be aware of. NACS can be an advocate and encourage our members to be advocates.
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