The Growth Playbook: 5 Roles for Small Retailers
By Samantha Oller on Feb. 09, 2018CHICAGO -- Owner, operator, manager of multiple categories and even community leader: Independent c-store retailers must wear many hats, often simultaneously. A group of small and midsize operators gathered in October at the 2017 NACS Show in Chicago to discuss business pressures and aspirations as part of the NRC Realty & Capital Advisors/CSP Independents Roundtable. In the process, they highlighted the many roles they play within their markets.
Here's a recap ...
1. The storyteller
“We’re doing the same things as Amazon,” said Lonnie McQuirter, manager/partner of 36 Lyn Refuel Station, a one-store operator in Minneapolis. No, McQuirter’s not necessarily talking about cheap delivery. Rather, he’s creating a brand identity. “It’s about capturing that great story to tell our customers.”
“We need to reinvent ourselves,” said Dee Dhaliwal, owner of Dhaliwal & Associates, Pleasanton, Calif., which has three stores in California. During his state’s recent rash of wildfires, the gas stations almost always remained open, he said. “They’re community centers,” he said. “McDonald’s doesn’t have that personal touch.”
2. The community organizer
36 Lyn has tried to take a leadership role in its Minneapolis community, such as the time it charged up 100 electric vehicles (EVs) in 24 hours to celebrate its new EV charger. “While these are one-offs, they touch our customers in different ways,” McQuirter said. The return on local giving is exponentially greater for his business than donating to a national cause.
And Mohammed Khan, president of Shahani Distributors, Branford, Conn., uses local marketing—and a mastery of the basics—to compete against big chains. “If we focus on a clean inside and outside of the store, and strong merchandising, we can win,” said Khan, who has 20 Gulf-branded sites.
“I’m optimistic about the industry. Our best days are ahead of us,” said Ryan Razowsky, director of operations for two-store Rmarts LLC, Deerfield, Ill. (Rmarts acquired 10 c-stores in January.)
3. The growth seeker
Fred’s Fuel ‘n Food, Gilman, Ill., which has two sites, including a truckstop, is not shy about competing near the big chains, said David Schwalb, owner and managing member.
“We opened our truckstop across from a Pilot and grew our market share with small- and medium-size fleets,” he said. “Our marketing platform communicates that we give the little guy a great value.”
Mike Squillace, COO of Gas Express LLC, a Circle K-branded chain of 66 stores based in Atlanta, said his chain has been growing by three sites per month since January 2017; it’s striving to reach 200 stores by 2020. But the pace is tough to maintain in the current M&A environment. “Everybody’s wanting to be bought by a chain and has big eyes about what they think they can get,” he said. “One of the most fortunate things with the chains’ acquisitions is we are getting the breadcrumbs, but the multiples are still crazy.”
4. The disruption dodgers
Lou Perrine’s Gas and Groceries in Kenosha, Wis., which has delivery service, has more experience than many other c-store retailers with the on-demand trend. That said, owner Anthony Perrine is wary of Amazon’s continued flirtation with brick-and-mortar. “Amazon’s automated c-store (Amazon Go) is amazing technology and very scary,” he said. “It could catch up fast and take out a lot of independent retailers.”
But Kevin O’Brien, CFO and COO of Stop-N-Go, Madison, Wis., which has more than 30 stores in Wisconsin and Illinois, argued that c-store retailers should not try to compete too much with disruptive operators.
“Don’t worry about consumer behavior you can’t control,” he said, citing the buzz around Amazon and EVs. “They’re still far in the distance. We focus on the customer and current behavior in our stores. … We manage our balance sheet and stay flexible.”
5. The foodservice pioneer
William Baine, CEO of Git’N Go Markets, a four-store operator based in Clinton, Tenn., said his business gets half of its gross profits from foodservice. Baine emphasized the need to master labor costs; his chain uses foodservice sales per labor hour as a key metric to follow. “Am I generating enough sales for labor costs?” he said he asks himself.
For Russell Scaramella, CEO and founder of Scaramella Holdings Corp., Scottsdale, Ariz., being successful with foodservice starts with building a foodservice team. “There’s a cultural difference between c-store and restaurant employees,” he said. “I never met a person applying for the restaurant job also applying for a gas-station job.”