The convenience store industry has seen phenomenal success and growth while other channels have faced challenges, but even greater success may be possible as it continues to evolve, stressed 2013-2014 NACS Chairman Dave Carpenter before a standing-room-only general session audience at the NACS Show.
“I don’t think it’s any stretch to say that many of our stores are now destinations for food” — something that was not the case a few decades ago, said Carpenter, president and CEO of West Des Moines, Iowa-based J.D. Carpenter Companies Inc. In fact, today the industry’s U.S. foodservice sales are so robust that they are roughly equal to those of McDonald’s, the largest QSR in the United States.
However, there are still too many people who have negative perceptions of the industry, and it adversely impacts the industry’s ability to grow.
“New stores today are incredibly more attractive than years past, our offerings more appealing. But we continue to fight a negative perception while trying to build new stores,” he said.
The end result: “Our current image drives over-regulation, and inhibits growth— both from regulatory barriers and consumer perceptions,” said Carpenter.
The good news is that NACS exists to communicate the industry’s voice on big issues like this, and positive stories already exist.
NACS has a demonstrated track record in addressing industry image issues. Fifteen years ago it launched the so-called “Dangerfield” campaign, to give a voice to an industry that “don’t get no respect.”
The campaign’s goal then was to change perceptions about the industry, particularly related to gas prices—and it was successful.
“Think about this time last year during Hurricane Sandy. The news coverage didn’t focus on what our prices were or gouging, but how to get fuel to stores so they could serve their communities,” said Carpenter. “Contrast that with (2005’s) Hurricane Katrina where hundreds of retailers were sued by their state’s attorney general for alleged gouging.”
“We want to turn the discussion from NIMBY—Not In My Backyard—to ‘What took you so long to get here?’” Carpenter said.
“The fact is, our industry has and continues to change,” he said. With tobacco and fuels sales declining, and expenses from the Affordable Care Act and PCI compliance growing, “our traditional model is getting squeezed.”
The industry is evolving, but just as it takes time to change perceptions, it takes time to change business models.
“It’s easier to sell a candy bar than make a great, fresh sandwich,” said Carpenter, but he has seen exceptional foodservice work, especially in Europe. “The result is a much broader demographic. We are only literally only at the beginning of developing the next phase of our industry. And I believe it’s our largest opportunity yet.”
As the industry continues to evolve and move forward, Carpenter also put forth a challenge, one that he is personally addressing: providing the right culture for his people.
“I’m inspired by companies like Kwik Trip out of LaCrosse, Wisconsin, which gives 40% of its profits back to its employees. Their employees want to know the whys behind the hows—they don’t want underperforming employees working alongside them. They care about the promotions and whether they will truly drive sales. The turnover is almost non-existent, and shrink is as low as it can get.”
As Carpenter grows his business, he said that placing more of an emphasis on growing his people can lead to a big payoff. “I’m convinced I will have a better business because of it. Even more exciting to me is that I will have a team of people around me that want to succeed as much or more than I do,” he said. “Creating better people will create better stores, and selfishly a better me. The end result is that our people will take better care of us. Think about how powerful this will be.”