As impressive as QuikTrip convenience stores’ record-breaking 96.1% score in CSP's Mystery Shop is, president and CEO Chet Cadieux views this kind of success as necessary for surviving in an increasingly competitive environment. The challenges the c-store industry faces are hardly a secret: core categories being squeezed, nontraditional channels going after fuel and smokes, operational expenditures growing along with health-care costs and rising minimum-wage requirements across much of the country.
However, that the majority of the 10 chains in the mystery shop topped 90% across about three dozen barometers speaks well of a c-store channel that is transitioning from guilt pricing and historic dependence on cigarettes and high fuel margins.
“These close results show the channel is evolving to survive,” Cadieux says. “In a hostile environment, it’s natural to see a sort of evolution occur. People who aren’t able to become better every day are probably not going to be long for this industry.”
Also hardly shocking is the investment in new revenue sources. “The industry’s biggest challenge is going to be replacing margin dollars from the dying categories,” says Cadieux. “I’ve said for 15 years: When some category comes to an end, we’ll have to figure out something else to sell.”
Click here to view the infographic: QuikTrip Vs. Kwik Trip.
Enter foodservice. For QT, it was not love at first sight. Unlike Sheetz or Wawa, QT did not have a decades-long foodservice history. In recent years, as the company has rolled out foodservice commissaries and embarked on expanded menus, the mantra has been the same.
“We need to get as good at food as we are at gasoline,” Cadieux says, a refrain he has been preaching for about a decade. “We’re pretty good at selling gasoline. That’s a pretty tall hurdle, and it’ll take us a long time to get there.”
Outside-In Challenges
Clearing that hurdle means hiring new employees, implementing new policies and, perhaps most challenging, facing new competition from classic food destinations.
“For the food category, QSRs and fast-casual restaurants are our competition,” says Cadieux. “There’s a lot of competition in the food business and a lot of smart people who have been doing this for a long time. They all know how to do it better than most companies in our industry, QuikTrip included.”
Facing such stiff competition isn’t simply a matter of offering high-quality food. For operators looking to establish themselves as QSR alternatives, excelling in all areas of the consumer experience is a necessity.
As such, Cadieux is proudest not of QT’s impressive scores for its coffee station or sandwich cooler, but for its 96.8% score at the pumps and 96.6% score for exterior cleanliness.
The fuel island may seem to have little to do with foodservice sales. But Cadieux likens it to arriving at an open house with a disheveled lawn: “You gotta think, ‘If it looks this bad on the outside, imagine what it looks like on the inside.’ It’s hard enough to be in the food business as a gasoline retailer. It’s probably impossible if you’re not taking care of the outside.”
Though Cadieux calls the relatively new foodservice program “an exciting challenge” for QT’s employees, it makes maintaining the outside of the stores increasingly difficult. Given the fact that QT’s lots are large—the company’s generation-three locations average 16 to 20 MPDs—Cadieux says keeping the exterior as clean and appealing as inside the store is “the hardest part” of his employees’ jobs.
“You don’t necessarily get upset about gum on the sidewalk like you do a pop spill inside, but it is at least as important,” he says. “The reality is, the outside’s just a lot harder.”
Pursuing Consistency
Maintaining a tidy exterior and interior and positive customer experience with more than 17,000 employees across 716 locations is no easy feat, foodservice program or not. One tool QT provides its team is meticulous consistency: All locations sell the same products, with nearly identical layouts. Walk into any QT store and you’ll find candy and the cooler to the right, soda fountains and fresh food to the left and the checkout stand front and center.
Cadieux says this model not only benefits QT’s time-starved consumers (who know they can walk into any location and immediately find what they need), but also its employees. “Keeping it consistent absolutely allows us to perform at a high level,” he says.
For example, QT “shares” employees across its network. If one store is short-staffed for a day, an employee from a different location fills in—a process that works well thanks to the stores’ similar setups.
Cadieux is quick to point out that QT’s philosophy is just one option—not a magic formula for c-store success.
“A lot of companies perform exceptionally high using completely different models,” he says. “There’s a lot of different ways to skin the cat; this is just the one that we’re comfortable with.”
CONTINUED: QT’s ‘Secret’ Edge
QT’s ‘Secret’ Edge
Cadieux readily admits he’s something of a broken record when it comes to QT’s strategies for success. It all comes down to the people.
“The hardest thing from an execution standpoint is continuing to find the number of good people we need to satisfy our growth desires,” he says. “You’ve got to really work at finding talent to be able to grow at a decent pace.
“We’re good at training, but we’re not necessarily the best in the world. We’re good at coming up with policies, but we’re not necessarily the best in the world at that either. But I think we’re really good at finding quality people to come work for us.”
That strength is the result of what Cadieux calls a “top secret” process of screening applicants, which he jokingly likens to Coca-Cola’s famed recipe—and is not something QT is willing to share publicly.
“At the end of the day, everybody wants the same people,” Cadieux says, citing “high energy” and “overachievers” as desirable descriptors. “The question is, can you actually get them to come work for you? We make it a point to not settle.”
Here’s an extraordinary statistic: QT hires less than 1% of its applicants. To put that in context, Harvard had a record-low acceptance rate of 5.3% in 2015.
This razor-thin rate speaks admirably to QT as recruiter and employer, a fact reinforced in business books about the company’s well-known employee-centric approach, which has landed QT on Fortune magazine’s “100 Best Companies to Work For” 13 years in a row.
“QuikTrip stands out in that employees praise its above-industry average pay and overall friendly, supportive atmosphere,” Fortune said of the company in the 2015 list. “Employees who ace a ‘mystery-shopper’ test or demonstrate good attendance get bonuses as well.”
Cadieux says he’s “not sure” if these policies affect day-today performance, so much as whether folks stick around. The company has an extremely low turnover rate of 13% (compared to an industry average of 59%, according to Fortune).
“If you’re a great employee, everyone else in the world wants you too, not just QuikTrip,” says Cadieux. “We recruit them by having a good job with good pay; we keep them by looking after them and being fair and caring.”
But while the compensation package certainly is a lure, QT scores high in the business sector for its keen eye in recruitment.
“We don’t believe that we can teach someone culture or values,” he says. “Instead, we’re looking for people who already have those values. To us, that’s what culture is all about: having a whole bunch of people with the same vision, the same values, the same reason to get out of bed in the morning.”
It’s this team of go-getters that Cadieux credits with QuikTrip’s success, not only in this year’s mystery shop, but also in thriving in today’s competitive landscape.
“Any CEO can beat on their desk and say, ‘We have to get better,’ ” he says. “But you have to have a whole lot of people within the organization who get out of bed in the morning and naturally want to do things better.
“If you’ve got a whole bunch of people who are like that, I’m not going to say it’s easy, but at least you’re in it together.”
NEXT: Kwik Trip: It Pays to Be Nice
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