PHILADELPHIA -- A company that operates more than 700 convenience stores in 46 states should be a household name in convenience retailing. It’s right up there with QuikTrip, Pilot Flying J and Wawa.
But Aramark? Not so much.
The company is well-known as an on-site foodservice and facilities-services provider in the education, healthcare, business, corrections and leisure industries. Been to a baseball game, hospital or college campus lately? It’s likely you were served by Aramark staff.
But the Philadelphia-based company also operates a major network of c-stores ensconced in schools, stadiums, corporate offices and other institutions across the United States. And it pulls it off with an attentive focus on each site’s clientele, with no fuel, tobacco or alcohol sales, but one very flexible format.
Here's a look inside some of its stores ...
A nod to P.O.D.
At the root of Aramark’s small-format strategy is a store concept called Provisions on Demand, or P.O.D. “[The brand] was initially launched in 2008 and continues to be the primary identity of our convenience solutions,” says Mark Walker, associate vice president of convenience retailing for Aramark. Walker has spent almost two decades with the company, first focusing on specialty retail for Aramark’s higher education division before taking over the convenience-retailing side nearly two years ago.
“The name truly communicates our inherent brand promise as we provide consumers the products and services they desire in a quick, convenient manner,” Walker says.
Depending on the size and footprint, Aramark’s c-stores typically fall into one of two P.O.D. formats.
The P.O.D. Market is a full c-store solution that combines the functionality of a corner store with the style of a modern market. At least 1,000 square feet, the P.O.D. Market features grab-and-go dining options for breakfast, lunch and snacking occasions, including freshly prepared breakfast sandwiches, burritos, wraps, sushi and salads, as well as fresh produce, bakery and coffee selections, all rounded out by traditional c-store essentials.
P.O.D. Express, meanwhile, is a solution for places where space is limited or traffic counts are lower. These locations offer a variety of snacks, fresh food, hot and cold beverages and everyday c-store SKUs.
The stores are designed to give consumers an easy shopping experience, with open layouts that reflect a “less-is-more” merchandising strategy. Aramark uses materials that evoke a modern, fresh, clean feeling. Wood floors are accompanied by earthy green walls and ceilings, while simulated stone panels adorn the entrance and checkout area. Produce is presented in wooden merchandisers. The result is more hip market than sterile store.
Like the store’s logo itself, simple, descriptive signage throughout P.O.D. stores is presented in easy-to-read block capital letters. The beverage area sports Recharge signage with hot and cold designations as accents. The coffee bar offers McLane’s JCX coffee brand and the fountain features Coca-Cola products.
Fruits and vegetables are displayed under Fresh & Green and Au Natural signage, while frozen foods and beverages bear a Chillin’ sign. Snacks and candy are sold under the category’s flavor profiles of Sweet & Salty.
Pictured: P.O.D. Express is a scaled-down version of P.O.D. Market for places where space is limited.
The concept of convenience for on-site operators such as Aramark is different from that of its commercial brethren. Their audience is captive—such as employees at a hospital, or kids on a college campus—which is useful for maintaining strong traffic and sales. But it’s also not necessarily a destination the same way a cool new restaurant or retail shop down the street is.
The P.O.D. trip is one of functionality. As such, a P.O.D. store must be tailored to its clientele.
“We commit to merchandising products that meet the needs of each store’s target consumer,” Walker says. “This includes healthy options, local favorites and products to meet specific dietary needs.”
This personalization can differ even on the same college campus. “If you have a dorm with all females, the product mix is going to be very different than all males,” he says. “And if it’s in a student union, it’s going to be different than if it’s in a residential area.”
Stores located in a student union or workplace feature more single-serve items designed for immediate consumption, while stores housed in a college dorm have larger-format items, such as full-sized boxes of cereal, as well as more traditional grocery items. Stores found in a hospital offer a product mix better suited for doctors, nurses and visitors, including gifts and flowers.
Take foodservice, a crucial category for P.O.D. stores, which have moved away from packaged foods and toward more freshly made items. During focus groups held while the company was developing the P.O.D. brand, Aramark discovered that its guests eat several times a day, often without sitting down to enjoy it. This is especially true of students and employees in the workplace.
More recently, the company conducted a proprietary research study. When asked about her day, one consumer said, “Most days it’s a run-and-go situation. I’m picking up my food, taking two bites at my desk and off to another meeting.”
The solution? A focus on what Walker calls “the explosion in snacking.”
“The concept of three meal occasions a day is long gone,” he says. And while personalization is crucial to Aramark’s c-store strategy, one thing is sacred: “We customize our look and feel to meet the needs of a particular location, but we never sacrifice our brand operating standards.”
Pictured: The P.O.D. Market at Florida International University
Another aspect of serving schools and other institutional clients, most of Aramark’s stores experience the effect of seasonal closings.
“We have a tremendous ramp-down and then ramp-up. Our operating teams are always planning for these cycles,” says Walker. “And even though a store may be closed, whether for winter semester at a college or winter holidays within a corporate cafe, planning is always in process. Our operators continue to manage inventory, build schedules, create and adjust merchandising plans and coordinate deliveries.”
P.O.D. stores must also build a business model without the cash flow of fuels sales or age-restricted products such as cigarettes and beer. But to Walker, it’s been a beneficial challenge. “It allows us to focus on delivering other innovative products and services,” he says.
Although not in direct competition with traditional c-stores, Aramark still has an eye on the industry, and Walker acknowledges its evolution in recent years: “While our business models are different than the traditional c-stores on the street, we are constantly monitoring what is on-trend as several chains have done a tremendous job evolving their offerings.”
“The convenience solutions we offer are far from the old-fashioned, run-of-the-mill quick-stop shops you still find on many street corners in America,” he says. “Our on-site stores, however, are similar to modern and trendy markets with both quick and fresh options. And we have the ability to adapt our formats to best serve our target consumer base.”
Already technically a top-10 c-store chain by store count (although CSP does not count contract sites such as P.O.D. in its annual Top 202 list), Aramark is hoping to expand its convenience-store network, with plans to open hundreds of new locations within the next three years. Like the industry’s top M&A players, it plans to grow by optimizing existing stores, opening new stores and offering competitive pricing, product merchandising and promotions.
And with that growth will come new formats and services traditional c-store retailers could benefit from watching.
“Now more than ever, consumers are seeking ways to obtain products as quickly and conveniently as possible,” says Walker, “and we have a real opportunity to deliver on this.”
Pictured: The coffee and fountain area of P.O.D. Market encourages students to “recharge” themselves with hot and cold beverages.
A chain is born
Aramark was founded by Dave Davidson and William Fishman, each of whom managed vending services for Douglas Aircraft during
World War II. In 1959, Davidson and Fishman merged their businesses to form Automatic Retailers of America (ARA), which they took public in 1960.
In 1961, ARA moved beyond vending when it acquired the Philadelphia-based Slater System Inc. foodservice business. ARA entered the leisure services market in the mid-1960s and officially changed its name to ARA Services. In 1976, the company entered the work uniform rental and career apparel industry.
In 1984, to fend off a hostile takeover bid, a group of executives coordinated a management buyout that resulted in management ownership of 40% of the company. ARA Services changed its name to Aramark in 1994. In 2001, the company went public again with an IPO that helped fund U.S. and international growth.
Pictured: Merchandise at P.O.D. Market includes a mix of healthy foods and indulgent snacks.