A commitment to people (both customers and employees), leaning into mistakes (so long as you learn from them) and engaging legislators (in order to avoid regulators) were among the themes that threaded their way through the keynotes, education sessions and floor-show banter at this year’s NACS Show. The big event, held Oct. 11-14, lured more than 20,000 attendees and 1,100 exhibiting companies to Las Vegas for four days of education, networking and trade-show connections.
The event began Sunday with general session speaker Chris McChesney sharing wisdom on effective execution. His advice: keep the number of new goals to two or three at a time. And it closed with annual favorite Ideas 2 Go, which highlighted creative retailing ideas such as offering meeting space for community groups and walk-up windows for curbside convenience.
The 2016 NACS Show will be held Oct. 18-21 in Atlanta. Until then, see the following pages for highlights and insights from this year’s event.
Courage to be Better
The three men who spoke on behalf of NACS during general sessions shared tales of resilience and how the values of the industry have encouraged retailers to improve their operations.
NACS CEO Hank Armour applauded the efforts of NACS and other groups for getting the FDA’s menu-labeling deadline pushed back to December 2016. He also lauded the revision of the Renewable Fuels Standard, ACA compliance and continued efforts on swipe-fee reform.
“We’ve had a great year and long list of accomplishments,” Armour said. “I have no doubt that next year we’ll have an equally impressive list. The reason for my optimism is simple: Our core values never change.”
What has been changing is the consumer’s increasing focus on health and wellness, and retailers are responding to it. Since becoming the first convenience retailer to join Partnership for a Healthier America (PHA), Kwik Trip is reaping the rewards.
“We are seeing benefits to both our brand and our bottom line,” said Steve Loehr, vice president of operations support for the La Crosse, Wis.-based company, and outgoing NACS chairman. He also cited the efforts of Sheetz, Vintners Distributors, Tri Star and U-Gas in joining PHA.
“Convenience means choice: We offer options at our stores,” Loehr said. “Today, customers are increasingly looking for healthier options.”
New NACS chairman Jack Kofdarali, who came here in 1980 as his family fled war-torn Beirut, used the story of his family’s immigration to inspire retailers to take action. “It takes courage to leave everything behind to start a new life,” he said. “It’s about reaching outside of your comfort zone to get better and be better.” After moving to California, Kofdarali got into convenience retailing; he and his wife, Taline, now run J&T Management, one of the largest ampm franchisees in the country.
He urged retailers to reach out to lawmakers about legislation that affects the convenience industry. While such communication may require courage, Kofdarali said, “We’ve proven we all have that in abundance.”
Whole Foods Goes Small
The first Whole Foods Market was only about 3,000 square feet, and the Austin, Texas-based company is again downsizing as it adapts to a more competitive retail environment and changing consumer tastes. The new format, 365 by Whole Foods Market, has a smaller, 25,000- to 35,000-square-foot footprint, a lower capital investment, less labor and a more specific product mix.
In a question-and-answer session during his keynote presentation at the NACS Show, Whole Foods co-CEO and cofounder John Mackey said the smaller labor requirements will help keep prices low, especially as several cities raise their minimum wages. Berkeley, Calif., for example, recently raised its minimum wage to $20 an hour.
“It’s expensive to do service when you’re paying people that high,” said Mackey. “That’s starting pay, mind you, and then you have to create a gap; 365 will have a lot less service.”
Whole Foods is studying competitors such as Trader Joe’s, Sprouts, H.E.B., Wegmans and even the c-store channel as it finalizes the concept. And while 365 will use the same supply chain as Whole Foods Market does, it will have a highly curated product mix.
“Part of what hurts our price image is we have a lot of expensive stuff,” said Mackey. “So if you curate your product mix and only have the less expensive items, then you’re able to put a lower mark-up on those curated items as well.” This approach extends to prepared foods. While Whole Foods Market has what Mackey believes to be the “highest-volume restaurants in the U.S.,” the 365 format will be much more tailored.
C-store retailers often use Whole Foods as inspiration for its fresh presentation. Its secret: Go big. “Traditional supermarkets did a terrible job at fresh foods—they were so waste-focused,” Mackey said. “They didn’t want the spoilage so they kept the inventories very low. We came in with bigger inventories—therefore taking the risk of higher spoilage.”
The risk paid off: Whole Foods stores average sales of $1,000 per square foot, twice the grocery industry average. “The secret to managing waste is to turn it over,” he said. “If it’s just a percentage of your sales, if you’re selling enough, you can manage the waste.”
While Mackey acknowledged this can be challenging for c-stores, there are workarounds—for example, using frozen ingredients in prepared foods and choosing produce such as bananas that have a longer shelf life.
Trend from the Floor
Packaged Beverages Proliferate
With beverages boasting added electrolytes, protein and caffeine, there was nothing mundane about the packaged-beverage lineup on the show floor. The major manufacturers spread their wings with extensions into new and healthier products lines, while the small guys stressed why their brands were better and more sincere. For those that didn’t want to overdo the innovation, the focus was squarely on sharing insights about product placement. Unfortunately, not every drink can be in the strike zone.
Fuel Category Readies for Liability
Coming to a fuel retailer near you: the return of EMV. Just as the backcourt rushed to meet the in-store Europay, MasterCard and Visa deadline this October, the forecourt is now rushing to hit its 2017 due date before liability shifts to the retailer. Fueling-dispenser vendors on the show floor had their solutions front and center, whether it was a brand-new pump or retrofit kit.
Foodservice Plays Fast and Hot
Big, bold and customizable prevailed once again, and suppliers zapped taste buds with flavors that are spicy, unexpected or just flat-out intense. On the equipment side, manufacturers continue to bring effıciencies to the c-store prep area. We witnessed a paradigm shift in ice dispensing, plus faster and smaller ovens and a digitization of the ordering process from the pump to the cloud.
Generally Mobile
From lime green to electric blue, electronic accessories in every color imaginable showed up in booths featuring general merchandise. Ear buds, car chargers and rechargeable battery packs come in your favorite hue or with the logo of your favorite sports team. And the jittery presence of energy shots continues: New flavors and higher levels of caffeine add to the realization that these tiny bottles with a big margin aren’t going anywhere.
Snacks and Candy Go to Extremes
If it was jerky, it was smoky, grilled or bacon. If it was chocolate, it was crunchy, bite-sized or shareable. If it was sweet but not chocolatey, it was sour or gummy. If it was salty, it was spicy, super spicy, or super-duper spicy. This year’s flavor trends in candy and snacks fall on the extreme end of the flavor spectrum, proving that appealing to consumers with more sophisticated palates isn’t just for foodservice anymore.
A Tech Tap Dance
- The grab-off: Tap a mobile phone on a beacon at the pump or store shelf and get a coupon. No app required.
- Shuffle off to Buffalo wings: Point a probe at a chicken sandwich, get the temperature and it goes into the cloud.
- Trenches: Name badges had near-fıeld communication (NFC) tags so attendees could swap information with their phones.
Tobacco Fights the Currents
One manufacturer quipped it’s “nearly impossible” to innovate in tobacco thanks to regulations. Challenge accepted. OTP suppliers stepped up with merchandising solutions from cleaner displays to trial-friendly package options. In e-vapor, it was all about “taking back vape” shops by bringing high-tech sub-ohm tanks to c-stores or launching next-gen cig-alike options.
Overheard at the Show
- “As soon as you have a loyalty program, you’re sitting at the big kids’ table.” --Ernie Harker, executive director of CREATE, Maverik Inc.
- “You can do two things, but you can’t do two things well.” --Rhonda Waters, performance coach, Human Performance Institute
- “If women are too assertive, they’re bossy; if they’re not assertive enough, they’re too nice.” --Joan Toth, president and CEO, Network of Executive Women
- “Think Trump’s going to buzz the top of the Wynn with his helicopter tonight … or just sit in the back and heckle at the Democratic presidential debate?” --Overheard on a NACS Show shuttle bus
- “People go to restaurants the first time for food; they go the second time for the service.” --Steve Turner, director of foodservice and dispensed beverages, RaceTrac Petroleum
- “Foodservice is not rocket science. If it were, we’d have answers. ... You’ve got to be able to play in the gray.” --Joe Chiovera, principal, XS Foodservice & Marketing Solutions
- “Don’t waste your time making bad stores good. Make good stores great.” --Terry Monroe, president, American Business Brokers
- “You don’t want to be the next headline.” --Phil Schwartz, IS manager for Valero Energy Corp., on the value of investing in data-security and antivirus software
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