When beer sales were made legal last August in formerly dry Clay County, N.C., Aztex Fuel & Food Centers’ Hayesville location was ready to pounce, becoming the first c-store in the market to supply cold suds.
Aztex, an experienced c-store marketer, knew from its other stores that alcohol sales can drive foot traffic and increase purchases on snacks and other merchandise. The company has been in business for more than 50 years and currently operates 21 stores in Tennessee and western North Carolina. Twenty of the units fit under the Aztex banner and one, which does not sell fuel, goes by The General Store, and is located in the downtown business district of Knoxville, Tenn.
The Hayesville location sits just five miles from the Georgia state line. The company had operated an older store on the property for 20 years, but executed a raze-and-rebuild to replace it two years ago. The location is also co-branded with a McDonald’s.
“Foodservice is a good traffic builder,” said Al Parrott, president of Aztex. The company has another co-branded store with McDonald’s in Knoxville, and also operates restaurants under the Buddy’s Bar-b-q and Crossroad’s Café banners.
But Parrott knew they needed more than just foodservice to compete in the down economy. “With the expense of the new building, we needed every profit center possible, so when beer sales were approved we didn’t hesitate to put it in; we sell beer at our other locations and knew it would drive more traffic,” he said.
First to Market
Beer was voted in Clay County on Aug. 18 and during the week it took to validate the election, Aztex got its application ready and applied the first day it could—Aug. 26. The company received its licenses and started selling beer that very day. The store was selling beer for more than two weeks before any of its competitors. On Labor Day weekend, without any competition, the store had so much business it couldn’t stock the cooler fast enough to meet the demand.
“I think it was a big plus being the first store to sell beer. People are creatures of habit—you get them started shopping with you, and they will stay your customers,” Parrott said.
The store also benefited from its proximity to Georgia. Because the Hayesville Aztex can sell beer on Sunday, unlike the nearest Georgia town, it attracts visitors from across state lines.
As a result of the new beer category, the store has seen a big increase in foot traffic and sales have increased in other areas as well, including snacks and cigarettes, and even gasoline sales.
“More sales mean more profits. We think this store will evolve into the top three or four for us in beer sales, even after the newness wears off,” Parrott said. “It’s hard to forecast how much of a sales increase we’re going to have in other categories after adding beer because we started it so late in the year, so I don’t think we will reach our full potential until next summer. But going into winter we have had about a 15% increase in cigarette sales and a 5-10% increase in all other departments. It has really been a great boost for us in these sluggish economic times.”
Since Anheuser-Busch has about a 70% market share in North Carolina and Tennessee, Bud products are the top sellers.
With property and construction costs higher than ever, it is vital for c-stores to maximize every square inch of floor space as a profit center. “We are constantly adding new items to our inventory mix and promoting snacks, candy and prominent c-store items to keep our customers coming back,” Parrott said. “With the current economic conditions our customers only have so much extra money to spend in a c-store, so we are doing all we can to keep them spending it with Aztex.”
Capitalizing On Catastrophe
Just as beer sales were taking off at the Hayesville store, the company’s Maggie Valley, N.C. location, which sits along I-40, began losing business when a rockslide occurred in October and closed I-40 in both directions until April 2010. As a result, business at the store declined 60%. But Parrot was quick to find the silver lining in an otherwise unfortunate situation.
“We are only getting local traffic, no interstate traffic because they are detoured around us, so it is a perfect time to remodel that unit,” Parrott said.
Within a couple of weeks of the rockslide a store remodel was underway, and the company is looking at doing the same “complete facelift” at several of its other locations in the future. “Dirt is so expensive, so it’s important to take advantage of the land we already have by doing remodels, Parrot said. “This gives us a large increase in revenue verses a land purchase and building a new store from the ground up.”
When the store reopens, it will feature 1,200 square feet of new selling space, eight additional cooler doors, an expanded deli selection, a high margin souvenir section for travelers, new shelving, an upscale check out stand and elegant restrooms.
“Our goal is to increase sales by adding a greater product selection. We expect a 25-30% lift on inside sales,” Parrot said.
Construction began in October and is estimated to wrap up by late January—well in advance of the reopening of I-40.
Having been rebuilt just two years ago, the Hayesville location is not in line for a remodel. It features an updated graphics package that has been added to several other units and will be put it in the Maggie Valley store and future expansions as well.
Catering to Customers
Aztex remains fixated on adding new items and discontinuing slow-moving products to entice customers.
“Our goals are to offer our customers a clean, well-stocked and merchandised store to shop in,” said Parrott, noting that he dislikes walking into a competitor’s c-store to find empty shelves or a poor selection of merchandise. “I think that is a huge part of our success—to be first on the street with a new item, just like we did by being the first one selling beer in Hayesville.”
As such, the chain goes the extra mile to offer great customer service, solicit feedback from customers and virtually eliminate out-of-stocks.
“On every corner we must do a better job than our competitor to earn a customer’s business, and our employees play a huge part in that,” Parrot said “One of our mottos is ‘we still offer great customer service.’ We believe in that and know how important that is.”