CHICAGO -- To help small retailers compete more effectively and secure their “continued survival and prosperity," three convenience-store owners with unique stories to tell shared their wisdom based on their experiences competing against larger chains in a 2017 NACS Show educational session titled, Where Is the Industry Going and What Does It Mean for the Small Retailer?
“There’s nothing to be ashamed of" for being a small retailer, said session moderator Bill Hanifin, COO of Wise Marketer Group LLC, Boca Raton, Fla., a customer-loyalty resource and the publisher of TheWiseMarketer.com.
He put that sentiment in perspective: The NACS 2015 census showed approximately 154,000 convenience stores. Out of that total, 67% were owned by retailers who had fewer than 10 locations, and 63% were single-store operators. “Those numbers tell me that everybody in this room is hugely important to NACS, to the business and to all of the consumers that we serve,” he said. “It’s something to be proud of.”
Each of the three retailers gave some background into his or her own business. They offered tips and spoke candidly about challenges and opportunities and about how to manage for profitability.
Meet the three retailers …
Mary Braddock is co-founder and owner of Meiners Market, Kansas City, Mo., which operates c-stores with car washes and foodservice, apartments and a hotel in the Kansas City area. Braddock is also president of the Missouri Petroleum Marketers and Convenience Store Association.
For small chains, one opportunity is to customize a store’s offering to fit the neighborhood. “It doesn’t make sense for big chains to offer different products at different stores," Braddock said. "But it can make perfect sense for a small chain store to do so.”
For example, one Meiners store serves fishermen and boaters who use five lakes in the area. “We offer live bait because the big chain down the street does not,” she said. “We quickly started to see new faces in our stores to buy the bait, and they would buy other items such as beer, ice and jerky. We started to see those fisherman customers come into our stores when they just need a hot cup of coffee or a cool fountain drink.”
She also recommended getting involved in the local community. At one location, Meiners dedicated one gasoline dispenser to the high school’s booster club. Students decorated the pump quarterly, and the company donates a penny per gallon sold at that pump to the school. “On game nights, we see a big flood of people waiting in line to use this one dispenser. We started to gain new customers,” she said.
An Achilles' heel of bigger chains, said Braddock, “is that they are slower to roll out a good idea. A big chain has to go through different departments for approval, do market research and have focus groups. We can have a good idea over breakfast and roll it out shortly afterwards.”
She cited the recent solar eclipse as an example. Meiners was able to get eclipse-safe glasses in the store within 24 hours, and the chain sold out of them.
Rob Razowsky is CEO of Rmarts LLC, Deerfield, Ill., which has operated more than 30 locations in the Chicago and Milwaukee markets, including c-stores, car washes and foodservice. Razowsky also is a founding member of Royal Buying Group, Lisle, Ill., and serves on its executive committee and board.
In 2014, Rmarts remodeled a gas station at a busy intersection in suburban DuPage County to its a new concept, Fillinup. The c-store is about 600 square feet. In 2016, Pilot Corp. built a travel center across the street with a 9,000-square-foot store. “So we’ve adapted,” he said. “It has been about a year and a half of some pain and suffering. We raised some margins, and we are surviving, although we are not doing the volume that we were doing.”
But for c-stores, he said, “the name of the game is still location, personal service and unique offering that will allow you to stand out in the marketplace.”
Big retailers are challenged with adapting to changes and trends in the marketplace, Razowsky said: “You need to adapt quickly and find contemporary trends and make those changes as often as you can.”
Rmarts resets its stores often and leverages its relationships with its distributors and wholesalers “to take advantage of their knowledge and ability to recognize those changes and shifts in trends,” he said.
He also suggests seeking out new profit generators. “Convenience-store trends and preferences still favor local businesses, fresh product options and wide variety and the ability to customize,” Razowsky said. “These trends tend to play very well for the independent convenience operator.”
Finally, he said, “We know most of our employees and their families. A lot of my success over the years has just been maintaining great relationships with employees.”
Rick Levitan, owner of Convenience Retailing LLC, College Park, Md., has five retail locations, four of which offer gasoline, small c-stores, car washes and Subway restaurants. All five have automotive service departments. The newest location is a stand-alone automotive repair facility.
The company began as franchised dealers, so the oil company controlled the real estate. Because the stores are in village centers, they are subject to heavy local restrictions, and the c-stores are very small—for example, 400-square-foot “snack shops.” They couldn’t offer foodservice.
Its fourth store was a new-to-industry location that it built from the ground up, and it took five years because of the difficulty in permitting by the county.
Following the favorable settlement of some litigation, it was able to get control of the real estate at all of its locations. It was then able to get better fuel supply contracts. The company was also successful at keeping some hypermarkets out of the county.
But because the company was limited in its ability to expand its stores, it decided to focus on the automotive repair business, because it was “what we were best at.” It created its own brand, called AutoStream Car Care. Its latest location has no fuel and no c-store. “It’s about service, not a commodity,” Levitan said.
He recommends building relationships with politicians. “When something happens in your area, if you don’t have any relationships with the politicians and zoning boards or council members, it’s too late, because the big guys are going to," he said.