SAN ANTONIO --CST Brands Inc. is expanding both its foodservice and its grocery programs based on lessons it learned from its fall 2014 acquisition of Nice N Easy Grocery Shoppes, Kim Lubel, chairman and CEO of CST Brands said during the company’s second-quarter 2015 earnings call.
The new Corner Store Market program will implement synergies from Nice N Easy “to ensure great tasting food offerings across all day-parts,” according to the company presentation. CST Brands will implement it in five new-to-industry (NTI) convenience-store prototypes in the greater San Antonio area in fourth-quarter 2015.
The program “will enhance our food offerings in the afternoon and evening day-parts,” said Lubel. “Going forward, all of our NTIs will be built to support an expanded food program. These five test stores will give us the opportunity to do some menu testing.”
She said that food sales make up approximately one-third of total inside sales at Nice N Easy stores. “This effort underscores the added benefit to CST from our acquisition strategy as we begin to bring acquired best practices to scale across our network.”
Lubel also offered details on the grocery concept.
“The expanded grocery offering that we will be implementing across 50 of our stores in the central Texas, San Antonio and Houston markets in the third quarter … is a program that we believe will not only enhance our overall product mix within these stores with the addition of over 300 new items, but it should improve our overall margin capture,” she said. “As we continue to work through our NTI program, we intend to include the grocery program in nearly all of our future builds. These new items will help us offer expanded choices to our customers, from more produce, to bakery items and even fresh meats. We will also be able to offer our customers a greater assortment of easy-to-prepare meals providing more convenience on the go to our customers.”
CST Brands will also implement these concepts in Canada, but because of the slightly smaller store footprints, the stores will have a more limited selection.
While the new grocery strategy leverages what CST has learned from Nice N Easy, it also builds on an existing strategy.
“You’ve heard us talking about our ‘milk, bread and eggs’ strategy, where we’re trying to capture the express-lane supermarket customer and gain the knowledge and the advantage of information that we can get when a customer comes in our stores and make the market-basket purchase,” Hal Adams, senior vice president and chief marketing officer said. “We’ve gained a lot of learnings from that, and we continue to grow momentum [with] that strategy, particularly in Texas. And so that is why … we’re expanding our grocery offering in the stores … because we are finding that space is fitting well for us. As grocery stores get larger, we fit well into that fast fill-in grocery customer’s needs, as well as the fact that we’re certainly the place of choice for immediate consumables in the hot U.S. Southwest—cold drinks and quick snacks.”
CST Brands is one of the largest independent retailers of motor fuels and convenience-store merchandise in North America. Based in San Antonio, it has nearly 1,900 locations throughout the southwestern United States and eastern Canada. In the United States, CST Corner Stores sell fuel and signature products such as Fresh Choices baked and packaged goods, U Force energy and sport drinks, Cibolo Mountain coffee, FC Soda and Flavors2Go fountain drinks. In Canada, CST is the exclusive provider of Ultramar fuel and its Dépanneur du Coin and Corner Stores sell signature Transit Café coffee and pastries.
CST also owns CrossAmerica GP LLC, the general partner of CrossAmerica Partners. A master limited partnership (MLP), CrossAmerica Partners, Allentown, Pa., is a leading wholesale distributor of motor fuels and owner and lessee of real estate used in the retail distribution of motor fuels. Formed in 2012, it distributes fuel to more than 1,100 locations and owns or leases more than 625 sites in 16 states.
To see a Grand Opening slideshow featuring one of CST Brands' already-opened new-to-industry locations, click here to view the story from the Augsust 2015 issue of CSP magazine.
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