An Investment in the Future

Mitch Morrison, Vice President of Retailer Relations

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About 2 ½ hours from its Cary, N.C., headquarters, the country’s largest independent convenience chain has broken ground—both literally and figuratively.

The Pantry is opening its first ground up location in four years, a nearly 5,000-square-foot Kangaroo site in Charlotte that ushers in an updated store format centered on improved foodservice and a drive-thru. It portends a new model for a business not long ago centered on the acquisition of sites small enough to be considered Kangaroo’s joeys.

As our cover feature by Angel Abcede and Abbey Lewis reflects, our industry is not only acquiring but also building. That means securing good dirt, working through the expense and time of zoning and planning, and designing thoughtful prototypes to answer tomorrow’s consumer needs. It means putting fresh skin in the game, investing today for a healthy return tomorrow.

Several months ago we gauged your optimism amid a struggling economy. And our 2012 Outlook Survey bore surprising results.

You’re upbeat. Despite a fractured Washington Beltway, despite fears of a health-care riptide, despite an economic metronome that cannot steady itself, more than 57% of you—our convenience operators—expected business conditions in 2013 to improve, marking the highest level of optimism seen in the survey since 2009. And of this group, more than one out of 10 predicted great improvement, marking a record high of extreme enthusiasts since we launched our CSP Outlook Survey in 2007.

As we see Walgreens go upscale, McDonald’s contemporize its arches and Dunkin’ Donuts push its customer experience, it is not only positive that we counterpunch. It’s urgent.

A front line of leading chains—from QuikTrip to Kum & Go and Stripes to more modest-size operations such as Rutter’s, Parker’s and NOCO—is investing tens of millions of dollars in configuring formats with robust forecourts and flattering store sizes starting at 4,000 square feet. They feature marquee foodservice, ambient lighting and greater interior accessibility.

In delivering the newest generation of c-stores, these companies are investing thousands  of man hours in contemplating the customer experience and calculating how to grow share at a time of certain dichotomies, when money is cheap but customers are tight-fisted

Fundamentally, these operators are answering the question that you must begin to ask: Do I risk investing in something bigger and fresher, or continue to cling to the mindset of incrementalism and playing it safe?

Chains of repute and scale are losing share in their core markets, giving way to emboldened encroachers that are seizing an opportunity.

Last month we told you about Quik-Trip’s Generation 3 stores (see photo)and shared exclusive market data that shows QT’s extraordinary gains in parts of Arizona. The company is succeeding because of great execution—and because it’s delivering a store format that allows for the seeds of execution to bear extraordinary fruit. Simply put, great execution in an outdated box will yield far less than the exponential potential of a well thought-out design.

This is happening in Florida, where Wawa and Thornton’s are boldly charging in a growing state rife with opportunity. It is happening in Texas, where Stripes is launching ambitious venues and taking down legacy locations. It is happening in upstate New York, where NOCO and Nice N Easy continue to impress with creative concepts that exceed their consumers’ needs.

It is happening everywhere you go, in every retail format, whether it be a c-store, drug store, dollar store or local boutique.

“What a new-store build allows us,” says Tony Miller of Kum & Go, “is the store prototype and footprint we want to build. It adds to brand consistency and the standard we want to achieve across all company [stores].”

I would respectfully take it a step further. A new store, specifically a new prototype, not only adds to brand consistency, but it also creates a pathway for a new consistency.

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