Just eight months ago, J&H Oil watched its Stanton, Mich., location burn to the ground after a drunk driver crashed into the store and ignited the fire that would destroy the building and the attached Subway restaurant. But with hard work, dedication and a little bit of innovation, the chain was able to rebuild the store bigger and better than before.
“Prior to the July 4 fire, the store was about 4,000 square feet and now it’s about 4,200 square feet and it’s a much nicer building,” said Sandy Arrasmith, vice president of operations and foodservice for J&H Oil, which operates 34 J&H Family Stores in Michigan. “The old building was originally a restaurant before it was converted into a c-store, so it wasn’t set up to have a co-branded Subway—it had a large dining room, but not enough retail store space.”
After the store burned down, the company rebuilt it with a larger c-store and reconstructed the building in a way that allowed them to use an old driveway for the Subway.
“The previous restaurant must have had a drive-through attached because there was already a drive-through path on the property, but it led to our backroom, so we couldn’t really use it as a drive-through space,” Arrasmith said. “We attempted to use it by doing a coffee drive-through and it was doing OK, but not generating a lot of volume.”
The new and improved store reopened shortly after Thanksgiving with the Subway franchise generating more business than before.
“Initially it was slow because drive-throughs are kind of new to Subway, but it has steadily increased every week. In fact, we asked our Subway development agent what we could expect and he estimated a 15-20% increase in sales and it has done that,” Arrasmith said.
She noted that on cold-weather days many customers don’t want to get out of their cars, so having a drive-through at the store is a big draw. Before the fire, the Subway was the chain’s fourth or fifth best franchise location. Since adding the drive-through it’s the No.1 Subway that the oil company operates.
The chain also increased its beer offering in the newly rebuilt store, adding a beer cave and more cooler doors. Previously, “we had a very small six-door cooler set up and a couple stand alone coolers from various pop companies, but now we have a 14-door walk-in cooler with the beer cave,” Arrasmith said.
Expanding the cooler has allowed the company to offer a more complete wine and beer offering, which Arrasmith hopes will assist in driving traffic to the lot.
But losing six months of business while the location was closed came at a price. “For those six months I think people got used to going somewhere else for their convenience and gas needs, so recouping that business hasn’t happened as fast as what the Subway has experienced, but it’s getting back to where it once was,” Arrasmith said.
The chain also is devoted to increasing its foodservice offering. On Feb. 7, the chain opened another Subway attached to one of its truckstops in Holland, Mich., bringing the number of Subway franchises the chain now operates to 11. A 12th Subway is being planned for one of the chain’s units in the Rockford, Mich., area. J&H Family Stores also co-brands with Piccadilly Circus Pizza at 12 of its locations.
“Foodservice is one category that can be very profitable if managed right. I think it’s a way to draw people into your stores, and anytime you can diversify the offer and give the consumer as many options as possible, it’s good for business,” Arrasmith said. “One thing I like about Subway is that there is (local and national) advertising, so my customers know it, so it’s a draw to the c-stores as well,”
Currently, the chain is seeking an additional franchise partner to add at five of its stores. “We’ve kind of maximized the number of Subways we can get into our locations, so we’re looking for a fast-food partner that will complement our existing food operation,” Arrasmith noted. “A couple of our stores are highway locations, so I’m looking for something that’s going to draw people off the road.”
In addition to foodservice, J&H emphasizes new products to drive sales. And, as any savvy retailer will attest, it’s imperative to keep an open mind when it comes to evaluating new opportunities.
“We started offering pellets for wood stoves, which some people didn’t think would work, but it’s really been doing quite well,” Arrasmith said.
Building for the Future
Looking ahead, J&H Oil plans to develop some properties it already owns—remodeling and upgrading the stores—but it’s waiting to see what the economy brings in 2010 before making definite plans. “I don’t think we’re going to open any new properties this year, but we may make some acquisitions,” Arrasmith said.
The chain is planning to go ahead this fall with a raze and rebuild of one of its original stores known as the “Pit Stop,” a small kiosk outlet in Wyoming, Mich. Currently, the store is only about 600 square feet. The location was one of the chain’s first retail properties in 1982. The company plans to add a food franchise to the store when its rebuilt and while “we do not have a building plan as of yet, depending on the franchise we add the new store will be anywhere between 3,000-4,500 square feet,” Arrasmith said.
Fuel business strong
Arrasmith’s father Jerry Hop started the company in 1969. In the beginning, he used a small tankwagon to distribute oil to area farmers. In the 1970s he became a wholesale dealer and bought warehouse facilities just down the street from the company’s main office.
“My father didn’t get into retail until the 1980s,” Arrasmith noted. “He had a few stores he was supplying and eventually they all became company operated stores.”
Back then, the stores were branded Unocal or Union 76 prior to switching to the Mobil brand in 1993. Today the company offers ExxonMobil and Marathon fuels.
Arrasmith joined the family business shortly after high school in the mid-1980s.
Her brother-in-law, Craig Hoppen, who is the president of the oil company, joined the business around the same period. While Hop retired in 2007 at the age of 70, he remains active in the company.