E-Z Mart Inc. has a long historyof being an innovator in convenienceretailing. When conveniencestores in the early 1970s onlystayed open until 6 p.m., founder JimYates kept his doors open until 11p.m. That kind of forward thinkinghelped the Texarkana, Texas-basedoperator grow operations to morethan 500 stores in the late 1990s.But the company suffered heartbreakingadversity in 1998 when
Yates died in a tragic plane crash. Theleadership baton of this family-runbusiness was passed to SonjaHubbard, who spent years learningthe business at her father’s side.Infusing energy and demonstratingthe business acumen that benefitedher father 30 years earlier, Hubbardbegan reinventing the company byscaling back operations, selling underperformingunits, promoting fuel operationsand making a hefty commitmentto foodservice.
Today, E-Z Mart is leaner, operatingmore than 300 stores across fivesouthern states and, despite gruelingcompetition from hypermarts andother big box chains, is enjoying someof the best sales numbers in its history.Hubbard discussed some of thechanges at E-Z Mart and shared otherindustry observations with CSDPublisher Shahla Hebets.
CSD: When your father, a prominent industry figure, died so suddenly, the industrywas experiencing a lot of mergers andacquisitions. Was there any talk about selling the business and going in a differentdirection?
Hubbard: We had certainly been approachedby acquirers prior to and even at the time ofhis death, but we were on the acquiring sideof the game at that time. We were alreadycommitted to two acquisitions when my daddied for 35 then 88 locations, which we tookpossession of in January and March following his death in December 1998.
CSD: Shortly after taking over, you werefaced with challenges, such as evaluatingeach store’s performance and launching amajor redesign. Can you explain how youwent about these projects?
Hubbard: The economic period for our industry that began within a couple of years of my dad’s death was certainly trying and did callfor radical change. Being a second generation accountant, I think I’ve tended to lookat things more by the numbers and less personally.
Our management team would sit downand review operations, target options toimprove stores, validate our operating markets and then make a decision as to individual units. As one of my guys said, “it’s notnearly as fun closing stores as openingthem,” and I agree, but you have to remember it’s in the best interest of all. It doesbecome a morale challenge, too. I personally dealt with downsizing by recognizing that itwas my job to protect the company as awhole. We couldn’t grow with low-performingstores bringing down the group. We trulyhave gotten closer to our vision quicker byright-sizing the company. I believe we willlook back at that period and acknowledgethat taking a hard look at our operations andmaking rapid changes made us money.
Our redesign was part of this evaluationprocess. We spent years growing and thereby forced us to focus on those acquisitions,neglecting, to some extent, our original storebase. It was time to unify our image andupdate our look.
CSD: When you decide to reinvest in astore, what specific actions do you take?
Hubbard: We determine the site’s potential.One of the main focuses of late is on fuelupgrades. We have put in new dispensersand added pay-at-the-pump. Some olderlocations did not offer pay-at-the-pump, andthat has been a technological upgrade,which requires a sizable investment. However, this type of upgrade helps grow thebusiness and updates the whole facility.
One of the other things we do when we reinvest in a location is add cooler spaceand upgrade restroom facilities. We placenew equipment in the stores as well asupgrade the coffee and fountain. We alsohave a list of stores that we want to razeand rebuild entirely. This isn’t something youdo to 300 stores, but we have some locations with great corners that might be 30years old, and there is no way to reimagethese stores to our new design. As a result,raze and rebuild becomes our best option.
CSD: E-Z Mart operates in some of themost competitive markets in the country.What is the biggest threat to your marketshare right now?
Hubbard: With channel blurring as it is, wehave discount stores, fast-food outlets,tobacco stores, drug stores and many others essentially selling the same productsand conveniences. They work aggressively toeat into our share. I believe some of ourbiggest challenges will come from areas wedidn’t see coming. That’s why we arefocused on looking at all other channels oftrade and trying to determine what consumers need. We want to have the idea firstand go on the offensive rather than defending our business.
CSD: What other channels do you watchclosely and why?
Hubbard: Dollar stores may have slowed down a bit, but they’re of interest becausethey offer convenience and also the fun factor of “getting a bargain.” We all like a bargain, but we ask ourselves, “What are someof the decisions that the customer goesthrough that makes them choose this outlet?” Then we ask, “What can we do to offerthe customer this at our stores?”
Drug stores are also a channel of interest. They started by taking all the traditionalc-store corner locations, and, as a result,you have to notice of them. At a recent conference, teenagers were asked to list theirfavorite c-stores and many of them nameddrug stores. It was interesting that teenagers view them as the same.
Coffee shops are another channel we’veinvestigated. They’ve been successful incharging a premium for coffee, and wewould like to be successful in this regard aswell. Fast-food outlets are doing some thingsright. How is it that they have such low-costitems but still maintain a margin they cansurvive on? Watching the consumers in different channels provides insight on productsand services we might offer later or affordsa glimpse of where things are heading.
CSD: How are you keeping up with hypermarkets and big-box retailers? Do you feelthat you are winning the battle?
Hubbard: Competing with hypermarkets isjust old hat, everyday business now. In ourmarkets we were the first to be impacted by their explosive growth, and it certainly gotour attention.
I think we’re good competitors at thispoint. Can they kill us on pricing? Absolutely,but I think we, and the industry as a whole,beat them on convenience. They offer lowprices, but they do not offer convenience.Some consumers will shop where it’s cheapest, and they base their purchasing decisions solely on price. This type of consumeris not loyal to any one outlet. It is for thisreason we focus on consumers that trulywant convenience. We want to focus on customers that make decisions for reasonsother than price.
CSD: Why is it important for you to beactively involved in NACS and numerousindustry causes?
Hubbard: I think that, as with most things inlife, you usually get much more back whenyou give. That is true of my commitment toNACS and this industry. I learn so very muchfrom all of the people I’ve come in contactwith. It amazes me how open and sharingthis industry is and how willing it is to helpothers. There is always something new andexciting someone is delving into.
My involvement with government relations at NACS and previously with thePolitical Action Committee is both a passionand an investment. There are people up onCapitol Hill that are fighting everyday to getlegislation passed their way. If we just sitback and let things happen, we will get runover, and it will cost us real money in ourbusinesses. I’m proud that our GovernmentRelations team has positioned itself in sucha way that we are relied upo
n and trusted bymembers of Congress who regularlyapproach us for information and advicewhen formulating policies.
CSD: You’ve been successful in a maledominated industry, what advice do youhave for other female executives?
Hubbard: Just be yourself. Don’t expect orwant special treatment, just do your best.We have finally reached a place, almost anyway, where it is okay to be a woman in business. In the past you had to act like a man.We should celebrate the difference!