Kangaroo Express Hops on Drink Opportunities

The Pantry focuses on merchandising, immediate consumption, malt beverages

Steve Holtz, Editor in Chief, CSP Daily News

Kangaroo Express convenience stores' beverage center

CARY, N.C. -- The Pantry's Kangaroo Express convenience stores are keeping a close eye on beverages as they aim to improve inside sales. In its efforts to increase merchandising and brand awareness, the convenience-store chain has identified the beverage category--both packaged and dispensed, alcohol and non-alcohol--as a key driver.

The extra attention comes as the chain reported less-than-ideal sales of dispensed beverages during the third quarter of its fiscal year. Dispensed-beverage sales "were not as strong as planned, and our merchandising team is developing programs to stimulate sales in this high potential category," president and CEO Dennis Hatchell said during a quarterly earnings conference call this week.

"[We] developed our beverage merchandising with the introduction of frozen, noncarbonated beverages, as well as frozen and iced coffee," Hatchell said. "We expanded the number of immediate-consumption beverage coolers and continue to innovate in alcoholic beverages as we increase the number of flavored malt beverages."

Newer soda fountains include 16 heads with most major soda brands on tap. The newer Chill Zone (See photo below) integrates frozen cappuccino drinks with a frozen-yogurt offer, with frozen-dispensed beverages nearby. The newly branded Beverage Center cold vault is clearly marked and brightly lit inside and out.

Hatchell said the effort is part of a larger focus on immediate consumables and foodservice.

"We are continuing to build our proprietary foodservice offering and increasing the overall mix of our foodservice as a percent of merchandise sales is a major focus for us," he said. "During the quarter, we added grills and expanded condiment programs to additional stores. Our promotional activities increased with our Buy More Save More beverage program, and we introduced several $1 ROO-deal programs to increase impulse purchases."

Buy More Save More deals drive product sales volume by discounting prices on multiple purchases. For example, a current deal offers two 12-packs of Pepsi-Cola for $8 and three for $11. A single 12-pack is priced at $5.29.

The Pantry owns and operates 1,525 convenience stores in 13 states, primarily under the Kangaroo Express banner.

Part of CSP's 2014 Convenience Top 101 retailers
Steve Holtz, CSP/Winsight By Steve Holtz, Editor in Chief, CSP Daily News
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