Long the retail arm of family-run Douglass Distributing, Lone Star Food Stores is forging its own brand identity. Its latest prototype launches the Sherman, Texas-based retailer into the world of freshly prepared foodservice. Lone Star CEO Diane McCarty shared her vision and the company’s transition from being a franchisee of multiple brands to crafting its own concept.
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Q: Can you share a brief history about Douglass Distributing and, specifically, about its retail arm, Lone Star?
A: We have 21 Lone Star Food Stores outlets and one 7-Eleven now. We had four On the Run and one Circle K last year, but we did not renew that contract and instead are working to build our own brand.
Lone Star is the retail division of Douglass Distributing, a diversified, midsize company that primarily does business in the north Texas area. We’re privately held and also have a trucking, dealer, propane, lubes and commercial fuels division. Lone Star’s growth has been slow because there are so many opportunities and needs that must be funded for the other companies to remain competitive, compliant and viable.
The retail division is an important part of our long-term strategy, and we’d like to have 30 stores within the next five years. Future acquisitions will be branded Lone Star.
Q: Your newest store is larger and really dives into a fresh, diverse food program. Can you elaborate on your newest location and what you believe will distinguish your foodservice program?
A: This store was acquired from Circle K in late 2013. It’s at the busiest intersection in Denison, Texas (population 23,000), borders Oklahoma and is 75 miles north of Dallas.
We expanded the store from 2,400 square feet to 6,300 square feet while never actually closing the store. The biggest challenge was the amount of time it took to complete the project, in large part due to weather delays. Our area had record amounts of rainfall last year.
We had already rebranded the fuel offering prior to the store overhaul, and we expanded the parking area to accommodate the additional traffic. Although we wanted to have a drive-thru, it would have had to be hidden behind the store, so we opted instead for additional parking and a store size that accommodates a full kitchen.
About 600 square feet is devoted to our proprietary Tex-Mex concept we named Mí Taco, which offers burritos, tacos, salads, nachos and quesadillas made your way and serves fresh-made tortillas prepared on site. There are six protein options and 16 different fillers customers can choose to customize their meal. We make our three salsas, pico de gallo, guacamole and killer queso in-house every day. Our seasoned chips are unique and addictive! We’re open for breakfast, lunch and dinner.
We contracted someone I knew, who had decades of Mexican QSR experience, to develop the menu, source the product, implement the concept and train the staff. We worked on the project for several months before opening for business in October 2015.
Q: How is the concept progressing? Do you foresee any changes?
A: We are working on how to improve the interior image of the concept to better convey the message that we have a high-quality, fresh, made-to-order offering with generous portions. We didn’t devote much space to the restaurant inside this remodeled store. But we plan to have a much bigger area to work with in the location we’re slating for the next iteration of Mí Taco. Not only would it be a larger footprint, but we’ll also change the interior graphics.
What is nice is we can roll out this concept within different store layouts. We believe this is a concept that could be implemented into areas as small as 500 square feet, assuming there is adequate kitchen space in the back. We have 2,300 square feet to work with at our next site, so we’ll be able to expand the menu to include more ancillary items, such as a wider range of beverages, snacks and desserts.
Q: Do you see your new concept as your prototype for future ground-ups? Are you also planning on remodeling legacy sites to incorporate some of the best elements of your new design?
A: We finished a remodel of another large store last year and incorporated a number of the items we liked (stone on the front of our building, a beer cave, granite countertops and touch-free restrooms) and changed a few that we weren’t as fond of (floor color, granite color). A somewhat unique challenge was to merchandise the large space to maximize sales but still carve out designated space for the restaurant. We’ll also revisit the identification and overall branding look of the hot- and cold-beverage counters.
Q: What are the biggest obstacles to successfully rolling out both Mí Taco and a completely new customer experience?
A: Introducing a proprietary food offering inside most c-stores is very difficult. As our industry knows, many customers won’t walk into the store from the pump and even fewer will consider us among their dining choices. Also, branded QSR competition is all around us, so getting people to try our food is crucial. We’ve given out thousands of coupons for free tacos, but working Mí Taco’s way into enough consumers’ paradigm of “Where should I eat today?” remains a challenge.
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