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Retail Leader of the Year: John MacDougall

CSP honors John MacDougall of Nice N Easy Grocery Shoppes as our Retail Leader of the Year for 2013.
In upstate New York, people know John MacDougall.
 
Maybe not by name, but definitely from TV. He’s the guy in the commercials dodging the jet-propelled cartoon pig, or literally turning blue in the face.
 
As the unflappable shopkeeper in a half-dozen regionally televised spots for his Nice N Easy Grocery Shoppes chain, CEO MacDougall has forged a business model based not so much by turning energy shots or candy bars, but by gaining the public’s trust.
 
What’s not to like about a jolly, silver-bearded ball of energy who wants you to try his stores’ coffee or pizza? And if you don’t like something, his face is on the customer comment cards so you can write him directly. It’s a personal appeal that breeds fans devoted enough to pull out their smartphones when he’s driving down the street and post the video on YouTube.
 
It’s a familiarity. A Main Street comfort. A double-edged kinship that has given him permission to experiment in fiercely competitive times—and win.
 
The channel knows MacDougall as a foodservice pioneer, the man who faced competitive forces unbridled by taxation and reinvented himself. But to achieve that well-deserved title, not to mention CSP’s 2013 Retail Leader of the Year honor, MacDougall had to forge a network of service-oriented employees, peer alliances and supplier partnerships that would define convenience retailing and line his shelves with the things people didn’t even know they wanted.
 
“John has a creative gene in him to satisfy public demand,” says Fran Duskiewicz, senior executive vice president of the Canastota, N.Y.-based chain. “The old saying is that people may not know they want a minivan. But if you’re sharp enough to listen to what they’re telling you, you’ll build one. John’s the guy who will come up with a minivan.”
 
And that minivan keeps evolving. His latest “perfect” store is a 7,000-square-foot “superette,” front-heavy with produce and farmers’ market goods, flanked by open coolers of freshly packaged meat on one side and hot-from-the-oven strombolis on the other. On the island display are fruit cups, yogurt parfaits and $6.99 take-home meals fashioned by one of two executive chefs.
 
By most industry metrics, the company ranks in the top quartile—and the top 5% in foodservice, Duskiewicz says. Out of its network of 88 stores, the 37 corporate-run sites together approach $100 million in inside sales annually, with foodservice representing about 25% of those sales. Many locations meet or exceed $1 million a year in foodservice sales.
As a comparison, top-quartile companies average $400,000 per store per year in foodservice, while bottom-quartile companies average $120,000, according to the NACS State of the Industry (SOI) Survey of 2012 data.
 
SOI data has foodservice at about 16% of in-store sales and 27% of in-store gross-profit margin. Nice N Easy’s goals are easily double that.
 
“We’re always trying to better serve the customer and differentiate ourselves,” says MacDougall. “This [current] concept leaves the competition in the dust. They won’t try it.”
 

Zest, ‘Guests,’ Harley Vest

Recounting his early days in the industry, MacDougall says understanding the customer and differentiating the offer were always underlying currents. He recalls early on how his formats took on a pantry-style model (hence “Grocery Shoppes” in the store’s name), with an extended grocery line and foodservice on a limited basis. Some stores were even as big as 4,000 square feet. But disruptive forces, including major oil’s entrance into convenience and tax-free gas and cigarette sales on Native American reservation lands, were always keeping MacDougall nimble and ready to redefine his format.
 
Here’s where the beer comes in.
 
MacDougall’s penchant for imagining what doesn’t exist is alluring. It’s a tantalizing trait, say numerous colleagues. And more often than not, these manic episodes of creativity are fueled by beer.
 
“He’d call me up and say, ‘Meet me at the Columbia [restaurant and bar] to have a few beers,’ and most of our good decisions were made over beers,” says Duskiewicz, who in the 1980s swapped his passion for a teaching career to work with the charismatic MacDougall. “[Sometimes] it seemed like he was yelling, venting his frustration, talking about opportunities. … [He helped me] realize I had the opportunity to try to create programs that would take … problems and fix them.”
 
MacDougall’s passion for Nice N Easy comes as a sharp contrast to his professed desire to be known as a nice guy.
 
And he is nice. He’s extremely accessible and genuine to customers (now called “guests” in the company’s increasingly sophisticated foodservice mindset), co-workers, competitors, even reporters.
But he’s also passionate. He has a zest for life and all things cool. The man rides a Harley, for God’s sake. He carried the Olympic torch through a stretch of New York and paraded Mike Tyson around in his very own tan 1960s Cadillac convertible.
 
That kind of passion can move mountains, but only if tempered, channeled and cooled by a lifetime of dedication to the community and the people around him. And if anything, MacDougall is mindful, even reverent, to the triumverate who make up his chain’s success: its people, customers and suppliers.
 

An American Upbringing

MacDougall’s upbringing was surrounded by solid ideals, like the bricks that make up his stores’ walls. Just one generation from his Irish immigrant past, the Catholic-raised and -schooled Cleveland boy was the oldest of four, a son and three sisters, raised in what he describes as an “Ozzie & Harriet” home.
 
Dad was in the building-materials business, first hands on and then switching to the sales side, demonstrating the work ethic of a generation that built the nation’s growing suburbs. Mom took care of the home and family, always supportive but ready to discipline the children with the feared hairbrush if any of them got out of line.
 
There would be mentors at school as well, in particular a high school coach who was right out of a Midwest playbook. He was a steadfast guide and sounding board for the brawny young football player that MacDougall was becoming.
 
But that idyllic life would also have a spiritual base, one that would lead him into the seminary and on the path toward priesthood. The gentle giant would hear that calling but would ultimately step away. (Remember the beer.)
 
And yet that sense of duty and kinship with community would always be a draw, ultimately leading MacDougall to choose social work, following up on parolees and people of all means and wherewithal. It would shape the man stepping into the idea of selling convenience in America.
 
In 1966, MacDougall joined Cleveland-based marketing and advertising consultancy Bruthers Co., which took on a client called Stop N Go, a convenience chain based in Trotwood, Ohio. It was a franchise model selling its concept to dairies trying to compete with supermarkets.
 
MacDougall’s business sensibility, along with so many in the fledgling retail channel, would work through its adolescence in this time frame, taking on the country’s increasingly fast-paced, on-the-go lifestyle. Eventually, the major oils would bring their muscle into the game, converting locations in the late 1970s through the 1980s from auto bays to c-stores and almost overnight proliferating the single-serve, grab-and-go concept exponentially across the country.
Through various business activities, much of it tied to the convenience channel, MacDougall found himself in New York, where in 1980, Dick Clark, president of Clarks Petroleum in Canastota, N.Y., made what MacDougall considered to be an unbelievable offer: a 50% stake in his company and the opportunity to run it.
 
MacDougall couldn’t refuse, especially because, at the time, he “didn’t have two nickels to rub together.”
 

Birth of Nice

The way MacDougall’s wife, Elaine, recalls it, he woke her up and told her he had the perfect name for the chain: Nice N Easy. She told him to go back to bed.
 
As a harbinger of what would eventually become an important cultural pillar of his business, MacDougall sensed that a friendly environment would be as important as the ease of getting in and out of the store.
 
But the early going was tough. The business, he says, needed a massive turnaround, or else his dream job was going to evaporate as quickly as it appeared. So began his lesson in supplier partnerships, ones that would become fundamental to his business and all the programs he’s been able to put under the umbrella of his current prototype store.
 
He often gives talks to college students and at industry events about the virtues of building strong vendor relationships. He first speaks to team building and what qualities people bring to the table. In terms of vendors, he says, many retailers believe it to be an adversarial relationship, one that should remain suspect. 
 
“But [vendors] are a critical source of ideas and suggestions. It’s where I can get information not just on my stores but on the overall competition,” MacDougall says. “Those people come in with thoughts, ideas and money.”
 
It’s a working relationship, he says: “They’re going to want to see that you took an idea and doubled sales, but maybe didn’t make margin. So how do we correct that?”
 
As for the customer, “relationship building with the customer starts with the employee,” he says. “If I can make a connection with that employee and then with that customer that Nice N Easy is a good, honest, straightforward company trying to do the best for you … if we can convince people of that and back it up with action … that’s a good thing.”
 
And the commitment to that message starts at the top. Peter Tamburro, senior executive vice president in charge of franchisees, says compassion for the front-line employee is a priority for MacDougall.
“John has taught me the folks in the store have the toughest job here,” Tamburro says, citing that new administrative employees often work in the stores to better understand the daily pressures involved. “This office is in full support of store operations. [If] a store manager calls here, they’re the priority, around the clock.”
 

More Mr. Nice Guy

Coming from that place of mutual respect and empathy, MacDougall is emphatic that the culture of “nice” be present in the stores in the same way he uses it as a guide in his business relationships.
 
It’s a caring mindset that would lead him to embrace the larger c-store community, as shown in MacDougall’s work in founding the New York Association of Convenience Stores (NYACS), Albany, N.Y. Along with industry colleagues Bob Seng and Dick Warrender, he helped found the association in 1986, spurred by legislation forcing c-stores to collect bottles for carbonated beverages in the state’s nickel deposit and redemption program. Avoiding the burden on stores to collect and store recyclables in their small spaces was ultimately a loss, but the effort did create a longstanding voice for the channel within the state. (Legislation expanded to bottled water in 2009, but the association was able to help block similar legislation for iced teas, sports drinks and flavored water.)
 
“John and other visionary leaders recognized that while existing organizations were serving grocery stores and petroleum marketers, there wasn’t one specific to c-stores,” says Jim Calvin, president of NYACS. “And in order to advance the interests of the industry, they would need to have their own association.”
 
But that’s not to say “nice” is the solution to every situation. Much of the time, mutual respect and civility rule both his everyday and more complicated creative processes, but things can go wrong.
 
“When we’ve been pretty clear about the direction and the goal and you spend time putting together plans and [people don’t] follow through, then the ‘N’ on my chest comes off,” MacDougall says, “because I want productivity. I’m not here to be your buddy. I will be your friend and drink a beer with you, but produce.”
 
(Editor’s note: If John MacDougall raises his index finger to you in frustration, you’re a “cooked goose.”)
 
“Obviously, John is more complex than just being nice,” says Jack Cushman, executive vice president of foodservice for Nice N Easy. “He’s demanding, he’s a visionary, he’s a perfectionist. But the thing that separates John is that after he talks to you, he leaves you with your dignity. He doesn’t berate you … or do anything to discourage you. He challenges you, but being challenged is motivating.”
 
And MacDougall has had to lead his team through tough battles, mostly waged against external forces. One of the more notable, of course, has been with local Native Americans. MacDougall even went to Congress to testify about the activity going on in his market.
Duskiewicz recalls how in the early 2000s, the problem of Native American tribes selling gasoline and cigarettes exacerbated, with one tribe moving from operating only on established reservation land to buying c-stores outside of those boundaries and still claiming tax-exempt status.
 
“We’d see the evidence of its effect when [a tribe] would close operations for a while, and we’d see sales of cigarettes in Syracuse double or triple,” Duskiewicz says. “And that effect would ripple out 100 miles. That’s how far people were driving to get cigarettes.” 
 

Making Foodservice Work

Nice N Easy’s foodservice story began in the mid-1990s with the hiring of industry veteran Glenn White as director of foodservice. Cushman arrived in 1999 as senior vice president of foodservice.
 
Over time, the company developed a branded image, Easy Street Eatery, and brought its different foodservice offers—including pizza, subs and coffee—under one umbrella.
 
The decision to do this in the mid-2000s even extended to the pump, with the chain forgoing its major oil history to become unbranded. Nice N Easy decided it would be in the company’s best interest to “have our brand be represented from the road to the store,” Duskiewicz says. “So we took down our branded signs, paid back the marketing dollars they gave us and had our own brand.”
 
The result on the fuel side was the development of a “complex” in-house fuel-buying and delivery system that not only simplified its branding message but also maintained volumes and financially, according to Duskiewicz, “was the best decision we ever made.”
 
And as the chain held onto its fuel volumes, it grew its foodservice by double-digit percentages for more than a decade. The company accomplished this over multiple steps through the years, according to Cushman. It upgraded the quality of products, including fresh-baked bread and better ingredients overall, cutting out added fillers. The sub sandwich make area was moved onto the sales floor to provide a food-theater experience for the customer. Guest seating, an important visual cue for foodservice, went into some areas and became so popular that employees now act as bus boys and girls. 
 
The chain also benchmarks itself not against other c-store chains but other restaurants, something NACS just began to do with its SOI numbers this year.
 
And yet the biggest revelation, Cushman says, is not finding the single win, such as a new sandwich offer that spikes in sales. 
“Success is incremental,” he says. “When we’re building a store, the first thing you do is ask: What can we do better? What are people looking for? And not just what’s in our box, but … how can we save people time and money for their families?”
 
It’s not a simple recipe. Every ingredient and every new sandwich costs out into a complicated series of automated line items and reports, Cushman says. Often a simple change can affect an entire cost projection.
 
That’s what makes the act of creativity daring. In 2011, MacDougall hired executive chefs from different backgrounds to provide input and initiate a made-at-the-store home-meal replacement program [CSP—Nov. ’11, p. 58]. He gave it parameters, the biggest being a $6.99 price and the basic composition of an entrée and two sides. Sales have been promising, but one of the more interesting lessons is that variety is key. Customers look for changes in the menu and respond accordingly.
 
It’s the kind of detail that challenges a major foodservice veteran such as Cushman, but in turn will surprise and delight the customer.
 
Distribution is another hurdle, with MacDougall calling it a complicated question of how many times a truck delivers and the number of stops it makes. But ultimately, Nice N Easy is not in that business, he concedes. It’s a logistics issue that falls back again to nurturing partnerships. 
 
“There are people out there who have commissaries that can do things for us,” he says. “They can make products exclusive to Nice N Easy, and that’s another avenue we can explore [further].”
 
For now, ingredients for the products it makes in its stores are sourced via area suppliers. For its newest stores carrying produce, the company hired an individual with grocery experience to keep those categories stocked and fresh.
 
The direction lends itself to other discussions, such as hiring a dietitian, says MacDougall: “It’s one of the many ideas we have up in the air.”
 

Forward Thinking

Probably one of the more continuous themes in MacDougall’s story is the idea of a legacy. It’s here where, again, talk goes to core values and what he’s made of. 
“[MacDougall] isn’t motivated by money or a fancy house, all the things that may drive the average person,” Cushman says. “What gets him up in the morning is to see people become a part of the community, feeling good about the job they do. 
 
“People that come in to Nice N Easy often stay for five, 10, 30 years. They feel good about the people they help. It isn’t about selling [items], it’s about building community.”
 
MacDougall, who is 72, has thought about the idea of retirement, but he believes the most satisfied people often work well past the average retirement age. “For them, work transitions to being more like fun, like going to play school,” he says. “It’s the passion for the business.”
 
What he does worry about is not so much the business itself, but the survival of its intent. “Culture is not transferable,” he says. “It’s in the heart and soul of the people who work there. It’s dependent on me and key people around here. If you cut out the heart, the culture is not going to survive. That’s tough to accept.”
 
Ultimately, he says, Nice N Easy is about building community. 
 
“That’s the way it is with me,” he says. “I would rather do something good for somebody and make them happy and help them have a better life. Those are the things that light my fire.”

Foodservice Fervor

John MacDougall’s wife, Elaine, was partly the inspiration for the chain’s decision to hire executive chefs. As an avid viewer of cable food channels, she admired the entrepreneurialism and creativity of the chefs on TV. That kind of outside-the-box thinking is what inspires many of MacDougall’s initiatives, leading to the chain hiring not one, but three. (One has since moved on.) As part of their jobs, the chefs go into the stores and help train staff on the preparation of meals that will be set out for customers to grab and go.
 
For its other foodservice offers, the company works with a foodservice distributor to provide restaurant-quality items without the chain having its own commissary.
 
MacDougall also takes inspiration from Wegmans, the Rochester, N.Y.-based supermarket that has a much-celebrated foodservice offer. Chain officials do feel the c-store has a value proposition different from Wegman’s, calling the grocer an “Easter egg hunt” vs. Nice N Easy, which is a more convenient experience.

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