From the Editor: Where We've Been, Where We're Going
With the snow finally melted and temperatures now comfortably above freezing, I’m packing away my scarf and winter coat and thinking about what we just experienced and what we soon could be seeing.
... As summer approaches and gas prices keep climbing, I’m sure many of us are still counting our shekels from 2014. We reaped rich penny profits, at least 20 cents a gallon and at times topping 30 cents due to oversupply, flat demand and lower credit-card fees (due to low street prices). Many retailers I’ve talked to say the six-month stretch of fourth-quarter 2014 and first-quarter 2015 was the best period they’ve had in a decade.
My only caution: Don’t relax. Like politics, the forecourt is fickle and high profits ephemeral. Don’t build a business strategy based on short-term treasures. Stay humble and focus on inside the store, new technologies and fuel opportunities at the fuel island.
... This year we’re saying goodbye to The Pantry, the Southeastern retail giant that took off in the late 1990s and early 2000s as an M&A specialist. Ironically, it was acquired during a new wave of M&A activity, by rival consolidator Alimentation Couche-Tard.
One fundamental difference I see between the acquirers of the 1990s and today’s buyers is that the current wave seems better attuned to the nuances and tendencies of the c-store channel, as opposed to misapplying broader marketing and merchandising principles to a sector that is in many ways unique.
I remember M&A players from 15 years ago suggesting that all they needed to do to be successful in c-stores was maximize high in-store margins and plunk down a major oil brand. How times have changed.
... We also saw the federal court support the Federal Reserve’s willful circumvention of the Durbin Amendment, which affects debit-card fees. While it’s certainly better than pre-Durbin pro-retailing efforts, plastic will continue to gnaw at our bottom line and capture billions of dollars annually from our channel. But as one retailer said, “I don’t like it but it hits everyone across the board, so I can live with.” It’s a case of que sera sera.
... And speaking of what will be: We’re hearing concerns about the growth trajectory of electronic cigarettes and vapors. A number of responsible companies are trying to do the right thing. Suppliers such as NJOY, Logic and 21st Century, along with big tobacco, are right to fight for reasonable government regulations on the state and federal levels.
One problem: We’re losing the battle.
Mainstream media is gravitating toward the negatives, some legit, some not. I just came across this headline in a respectable New Jersey publication (The Bergen Record, March 13): “Nicotine Refills Hold Dangers for Kids.”
The story, the fourth I saw about vaping in area newspapers in less than two weeks, talked about how minors as young as 4 are consuming high levels of liquid nicotine, and how poison-control centers across the country are responding to more and more calls.
With the federal government in no rush to adopt permanent regulations, and state and local governments seemingly interested only in taxing and restricting sales, the burden falls on the manufacturers to engage in a national campaign to educate the public about the dos and don’ts of vaping.
... Another controversial topic is weed. Yes, more states are legalizing it, and a euphoric high seems to excite some retailers. However, put the toke down. Pot will not only be regulated, but we also must ask ourselves: Do we want to be the retailer of choice for something that inherently endorses mental escapism and likely will increase the number of arrests for driving under the influence?
... On a more positive note, unemployment continues to fall, though the actual amount of able-bodied adults working remains in the low-60% range. What that means is that a higher-than-healthy percentage of capable performers has given up on the job market or has taken part-time positions to cover their most essential expenses.
There’s a recruitment opportunity for you both in the back office and on the front line. According to employment experts, many younger baby boomers and older Gen Xers, notably those who worked in financial services, communications and factories, will likely never reach their projected peak incomes. They’re taking positions that pay 30% to 40% below their highest salary, and many are open to career changes.
On the younger front, many millennials graduating from college are not finding jobs out of school or are encountering what they perceive as dead-end, glorified minimum-wage positions. Many of our best convenience operators espouse a ladder of opportunity, growing CSRs to become store managers and regional supervisors.
The talent pool is teeming with a new generation of leaders that will fast-forward you into the world of social media, loyalty apps and a broader customer experience. Here’s your chance to truly become an employer of choice.