Filling Up on Food Sales

Five years ago, Open Pantry was poised to move beyond the humdrum in southeast Wisconsin.

The 26-store convenience retailer was bracing for big changes inside and out, all part of a mammoth push to polish the chain’s image with new products, programs and brands.

A gourmet sandwich line was added. Larger roller grills were installed with name-brand sausages. A self-branded coffee café and a burrito bar were rolled out. Customers were offered in-store Wi-Fi access. Everything seemed as it should. Almost.

“We forgot one thing,” said James Schutz, Open Pantry’s vice president of people assets. “That one thing was people.”
Schutz, a participant in the third leg of CSD’s Foodservice Webcast series, explained how retailers too often overlook the fundamental differences between foodservice workers and traditional c-store employees.

Webcast participants Mel Kleiman, of Humetrics Inc., and Carolyn Watkins, of Porter Khouw Consulting, buttressed much of Schutz’s findings. “If you hire the wrong people, all the fancy management techniques in the world won’t bail you out,” Kleiman said.  

Many c-store operators are running in worn ruts, staffing their foodservice program by way of age-old “hire fast and fire slow” routines when they should be hiring slow and firing fast, Kleiman said.

IMAGE IS EVERYTHING
One surefire solution, Kleiman advocated, comes in building a positive company culture and image. It attracts good employees and ultimately resonates with consumers. “If we can have the people behind the counter who like dealing with people, then our customers will keep coming back, because nobody else is going to give it to them,” he said. “The only thing your competitors can’t copy is your culture and your people.”

It was a lesson Open Pantry learned quickly, as the company is today one of the leading c-store chains in its market. “We started to use our brand as a tool,” Schutz said. “We built a brand that we’re proud of.”

Open Pantry became involved in the community, injecting its image in a multitude of environments and getting the word out that the retailer offered a “place that was fun to work for,” Schutz said.

The company retooled its hiring practices, too, focusing not only on improving the quality of job candidates for foodservice positions but also on optimizing the interview process.

In interviews past, cashier candidates were interviewed by store managers who were multitasking, answering phones or counting cash drawers. These days, Open Pantry’s foodservice applicants are interviewed in rooms where they won’t be interrupted, and their suitability is now based less on previous experience than it is their responses to critical questions that uncover relevant abilities.

Like many c-stores embarking on a foray into foodservice, Open Pantry found that food workers are a far cry from their cashier counterparts in the c-store environs. Seeking out and retaining those workers for key positions should be a central focus for every c-store.

Seem like a daunting task? Kleiman offered this to assuage the apprehensive: While 12.8 million people are employed by the foodservice industry and there are more than 950,000 foodservice establishments for those workers to choose from, every five seconds—24 hours a day, seven days a week—one of those millions of workers is hired in a new position.
Finding the diamond in the rough is no walk in the park, but the right hiring process, recruiting techniques, interview questions and retention mechanisms is critical.   

“There is no future in any job,” Kleiman said. “The future lies in the person who holds the job.”

DISCERNING DINERS
Part II of the Webcast Series focused on developing solutions to satisfy convenience customers, who are increasingly being targeted by quick-service restaurants and coffee chains like Starbucks and Dunkin’ Donuts. Experts warned the industry should be concerned about protecting its “fare” share.

That tingly feeling down your spine is one of two things: The excitement of beefing up your foodservice program, or the ghost of Ray Kroc breathing down your neck. Maybe it’s both. “It would be diligent of us to keep our eye on what the competition is doing,” foodservice consultant Dean Dirks, of Dirks Associates LLC, said of quick-service restaurants.

Dirks hammered out the litany of liberties the quick-service industry has been taking in recent months to capitalize on the needs of increasingly convenience-minded consumers.

He was joined in the Webcast by retailers Mike Harrell, president and CEO of Jernigan Oil Co., which operates 25 Duck Thru convenience stores in North Carolina, and Adam Abuageel, general manager of Plymouth SuperCenter/Atlas Oil Co. in Michigan.

What the trio of presenters agreed on: Despite stiff competition from other channels and an army of consumers who are looking for better quality at lower prices, the c-store industry can succeed in today’s environment by making value and variety a central focus to foodservice offerings.

“There’s only so much money they have left after they’ve taken care of gas prices and energy bills,” Harrell said. “They’re not eating out at restaurants like they were. They’re looking for value in our stores, whether in be in merchandise or foodservice.”

Satisfying Needs
An emphasis on value and variety, paired with a positive in-store experience, is the foremost strategy to gain loyal customers, according to Harrell and Abuageel.

Case in point: Harrell said a massive promotion in June and July offered discounts on Hot Stuff pizzas at seven Duck Thru stores. The promotion was complimented with a full marketing blitz, including signage in all external and internal areas, ultimately boosted sales about 54% over a three-week period. One store saw a 177% increase in volume.

Duck Thru offers a slew of regular and sporadic promotions to boost foodservice sales, such as a pizza “Power Hour” where foodservice workers have been known to sell 100 to 150 pizzas per hour and a hot dog promotion where sales increased more than 300% when prices dropped from $1.19 per dog to 79 cents.

“There’s a limited amount of money to be spent so we try to keep our promotions going at all times,” Harrell said.
Abuageel said the overall customer experience is enhanced with amenities: Wi-Fi access, a variety of coffee flavors, a food court, even a television area for kids. “If you want a successful business, you have to offer the goods and services your customers want, or they’re not going to come back,” Abuageel said.

C-stores would be wise to start thinking in new paradigms, whether they’re introducing fresh products or looking for ways to cut costs. Labor for instance is the industry’s second-largest cost, yet it’s an area that doesn’t even have a category manager, Dirks said.

It’s these insights that retailers and foodservice operators in other channels are already living by. “At the end of the day, (competitors) are driving sales in unconventional ways,” Dirks said. Value menus, discounts, car-friendly items, innovative breakfast and coffee programs—there’s scarcely an abyss into which QSR retailers aren’t willing to wiggle their tentacles.

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