Tom Robinson, outgoing NACS chairman and president of Robinson Oil Corp., Santa Clara, Calif., is “pretty optimistic about our 2013 prospects.” The industry at large survived the roughest economic downturn in recent memory, he said, “and did pretty damn good.”
He quoted Carl Bolch Jr., CEO of Atlanta-based RaceTrac Petroleum, who told an earlier NACS Show gathering, “We may not be recession-proof, but we are recession-resistant.” This is partly because the industry provides “the consumer with a terrific offering, and we make it convenient for them to shop with us,” said Robinson. It also speaks of values, including personal connections, knowledge and advocacy.
The c-store industry has members with stores in every Congressional district. Hank Armour, NACS president and CEO, cited successful grass-roots efforts in passing legislation to close a loophole allowing roll-your-own (RYO) tobacco manufacturing in some tobacco shops, which were stealing 10% of c-stores’ RYO business.
But some battles continue to be fought—for example, the effort to bring transparency and fairness to the swipe fees charged by Visa and MasterCard for debit and credit transactions. The Durbin Amendment helped save the industry and consumers $500 million in debit transaction fees in 2012, with the average fee cut from 44 to 22 cents per transaction, Armour said. However, if the Federal Reserve had followed the rule of law, the fee should be 12 cents per transaction. NACS has filed suit against the Fed; it presented oral arguments and expects a ruling at the end of 2012.
Armour also highlighted NACS’ opposition to a proposed $7.2 billion settlement with Visa and MasterCard in an anti-trust lawsuit. The settlement would “cement Visa and MasterCard’s roles as price fixers,” he argued, and prevent associations and retailers from suing for changes in the swipe-fee system for several years. With a judge considering the proposed settlement, Armour urged retailers to sign a declaration against it by e-mailing NoDeal@nacsonline.com.
Despite the amount of money the industry has lost to swipe fees, “This was never about the money,” said Armour. “It was about fixing a broken system.”
—Samantha Oller
Sheahan: For Future Success, Follow the Fringe
In the early 1900s, the mayor of London assembled a team of the country’s best minds to deal with the city’s massive population growth. One of their conclusions: London would need 1 million more horses by 1925 to transport people. This was at a time when there were already 78,000 automobiles on the road.
Retailers must avoid this strategic tunnel vision, warned Peter Sheahan, keynote speaker of the NACS Show 2012 general session. Sheahan is CEO of ChangeLabs, a consultancy based in New South Wales, Australia, that works with corporations on behavioral-change initiatives. After analyzing industries and companies that thrived during periods of massive structural change, his firm found that one key to success.
“People who make the most money make the best assumptions,” said Sheahan. “It is always something on the periphery that gets critical mass.”
For example, c-store retailers in the 1970s may have scoffed at modern industry staples such as bottled water or energy drinks. “Change is slow until it’s not,” said Sheahan. Before a future development hits big, it has already made multiple small headlines. The challenge for retailers is to adjust their “filter” of trends to accept those with promise.
Above all, they need to avoid what Russian chess player Garry Kasparov called “the gravity of success.” Though the c-store industry may be recession-resistant, it should still “flirt with things in the fringe,” Sheahan urged. “Be prepared to question your assumptions,” because with new possibilities come new filters.
Also envision how you may perform a different role for customers. Consider the example of McDonald’s when it began selling salads in Australia. The month after the launch, about 350,000 customers returned to the QSR after avoiding it for the past year. And few of these customers ordered salad. Instead, the new offering changed what McDonald’s could mean in customers’ lives.
“You have to actively change the story people tell themselves about the role you play in their lives,” said Sheahan. “Don’t leave it to someone else to figure out how to deliver that value. He who gets critical mass first … wins.”
—Samantha Oller
Big Ideas
Steal these inventive, effective strategies from Ideas 2 Go
This year’s Ideas 2 Go session was packed with terrific insights and ideas from a dozen retailers across the country. Here are our favorites:
Stick It: Greg Parker’s Savannah, Ga.-based chain has given customers an incentive to slap a Parker’s bumper sticker on their cars: Vehicles spotted around town with the decal are awarded a $50 gas card, and one lucky driver from that group will win free gasoline for a year.
Salad Days: Offerings from Rogers, Ark.-based Pinnacle Station Local Market’s salad bar are sold by the pound, and the store moves more than $1,000 worth of greens every day. Customers who buy breakfast at the store get a free cup of coffee. And our favorite part of the store: a full-service bar open after 5 p.m. If ever we needed a reason to stop on our way home ...
To Market: Papa’s Healthy Food & Fuel puts a focus on fresh/healthy/organic foods, so it’s no wonder that a farmers market springs up on the site from 9 a.m. to 1 p.m. every Saturday from May through October. Owner Larry Southard has this advice for retailers: “Look at your area and figure out what others are not doing.”
Green Getaway: The extreme-green Propel Fuels Clean Mobility Center is “one of the few gas stations that encourages customers to drive less,” says CEO Matt Horton. The site offers regular fuel along with E85 and biodiesel, and customers can make a donation at the pump as part of a carbon-offset program. For those with different types of wheels, transit maps and a bike tuneup station complete with tire pump are available.
Star Turn: Lone Star Food Stores’ 19-acre site in Sherman, Texas, was built in the early ’90s and expanded recently to include a post office and dining area. Young ladies called “Starlets” are on hand to offer food samples at the pump and help other women navigate the choices at the site’s car wash.
Inside and Out: Employees of Omaha, Neb.-based Fantasy’s Food & Fuel are strongly encouraged to learn every customer’s first name and greet him or her by name on entrance and exit. The store underscores its dedication to the customer with another convenient feature: an outdoor ATM.
Reade About It: Duane Reade’s stunning flagship in Manhattan strives to make navigation as easy as possible. Sections of the store—pharmacy, beauty, convenience—are color-coded. Shelves are backlit with ambient light, and magnifiers hang on strings near products to help with reading labels. If you grab a shopping basket and fill it with too much stuff, never fear: The basket has wheels for rolling it around.
Food for All: The city council of Brewerton, N.Y., requested that Nice N Easy Grocery Shoppes come to town—and bring some groceries. The 6,700-square-foot site has conveyor belts at the checkout to enhance the grocery-store feel. President John MacDougall is bullish on the store’s plentiful home-meal replacement offering. “Dinner is growing faster than any segment we have,” he says.
Chow Down: Los Angeles-based Corner Deli & Grill is small, but it’s big on food. Its menu has more than 200 items, including delivery service. Owner Richard Speckman stresses that he doesn’t offer combo meals because it encourages folks to pick up chips and soda in the c-store area.
The Mark of Zaremba: Zarco 66 president Scott Zaremba is one of the greenest retailers in the country, offering five blends of ethanol and five blends of diesel at his sites, but he’s becoming known for something else, too: catering. He can feed up to 1,000 with his catering services, which includes box lunches for schools. The next big push for his stores: drive-thrus, which he believes is a significant facet of the industry’s future.
Rumble in Vegas
Dean, Santorum face off on key c-store issues
Both Howard Dean and Rick Santorum have favorite c-store products. Dean, former governor of Vermont, enjoys York Peppermint Patties; Santorum, former Pennsylvania senator, goes for chocolate milk. Other than a fondness for chocolate, the onetime Democrat and Republican presidential candidates agree on very little—which made for a lively sparring match at the NACS Show.
Moderated by political analyst Michelle Bernard (pictured, left) of The Bernard Center for Women, Politics & Public Policy, Dean (center) and Santorum butted heads on issues directly affecting c-store retailers.
▶ The American Dream: “The American dream is about opportunity—the opportunity to get ahead,” said Dean, who expressed concern that it has gotten difficult for many Americans to realize this dream. “There are people at the bottom who no longer believe it’s possible to get ahead.”
While Santorum agreed that there’s a problem with people not being able to achieve the American dream, he believes the problem is cultural, not economic.
“It’s the breakdown of the American family,” said Santorum, referencing the high number of broken families suffering through poverty. “It’s not just about succeeding, but succeeding as a family.”
- Childhood Obesity: Bernard asked both to comment on childhood obesity, which is often blamed on retailers, especially when a c-store is the only option for groceries in impoverished areas.
“First thing you should say is you’re there; other businesses are not,” Santorum said to a wave of applause. “Be proud that you’re part of the solution.”
“It comes down to individual choices,” Dean said, calling for more consumer education on healthy eating habits. “If someone buys a pack of beer and french fries, that’s not the store-owner’s fault— unless the person is under 21!”
- The Upcoming Election: “Mitt’s got two problems: likability and changing positions,” said Dean. “Authenticity matters. Romney doesn’t care who he is; he just wants to be president.”
Once again, Santorum agreed with Dean on the principle: that Romney has a likability issue. But he countered that, while likable, Obama does not have the chops to actually lead the country.
“[Obama is] an average politician away from the teleprompter,” he said, claiming Obama was elected in ’08 on image, not substance.
Of course, the upcoming election is about much more than Obama and Romney. “If the Democrats control the Senate, health care won’t get repealed,” Santorum said, firing up the crowd. “If the Senate goes Republican, ‘Obamacare’ will be repealed. It’s a tax, not a mandate.”
“There’s going to be a redistribution of wealth,” said Dean. “The question is, do you want it to be upwards or downwards? Don’t forget, it was a Democrat who fought the big banks on swipe fees.”
- Health Care: In what was the most heated discussion of the session, Dean and Santorum sparred on whether or not President Obama’s health-care reform will work and whether it will help or hurt retailers.
“You should hope ‘Obamacare’ passes,” said Dean, pointing out that retailers could choose to pay the tax rather than provide their own health-care plan, allowing employees to get coverage through the government— meaning employees would not be looking for jobs that do provide insurance. “It’s morally incomprehensible to let people die or go bankrupt to pay for health care.”
Even if the current health-care reform remains in place, Santorum argued it would not solve the rate of the uninsured in the United States: “Not everyone is going to do what the government tells them to. We’re Americans.”
Dean countered: “Twenty-two percent of children in Texas don’t have insurance. That’s scandalous. Responsible adults can choose not to have insurance; it’s different with children. If the private sector can’t solve this problem, the government has a moral responsibility to step in.”
And while Santorum certainly didn’t agree with Dean’s beliefs, he also expressed displeasure with how his own party’s presidential candidate has handled problems such as health care.
“The campaigns have not been about big issues,” he said. “Neither party has laid out how to effectively deal with the problems we’re facing as Americans.”
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