How Rutter’s Stays on Top

There was a time not long ago in this industry when bigger was always thought to be better. Fortunately, the folks at Rutter’s Farm Stores knew better. 
With 52 stores in five Pennsylvania counties, Rutter’s focus has never been on reckless expansion simply for the sake of having a larger store count. Rather, its has remained focused on serving local customers within its means and doing it with enormous success.
“We are still a family-run business so we do things a little more cautiously than some others, but we’re not afraid to take risks,” said Scott Hartman, the third-generation president and CEO of Rutter’s Farm Stores. “For us, the emphasis has been on doing things right and meeting the needs of our customers. If we do a good job doing that, expansion will take care of itself.”
Rutter’s special talent has been its ability to constantly reinvent itself, from its humble beginnings as a local Pennsylvania dairy to adding fuel operations and foodservice. Along the way, it became an integral part of the local community. This year, the company is taking its boldest step yet, unveiling the most ambitious growth plan in its 40-year history. It is investing more than $55 million to build 10 stores and 11 car washes, which will add 350 new jobs and more than $4.5 million in annual wages and benefits to the area economy. At presstime, three of the convenience stores have opened their doors, with seven more to come.
Four new stores have already received approval for 2009, Hartman said. The expansion will extend the York, Pa., chain’s reach into Dauphin County, Pa., and into two other new Pennsylvania markets: Carlisle and Chambersburg. By year’s end, Rutter’s will operate 58 convenience stores in York, Adams, Cumberland, Dauphin, Franklin and Lancaster counties in central Pennsylvania. 
“Our customers ask us to provide the most up-to-date stores possible— bigger, brighter and more fast-food options. These new stores will be bigger (5,300 to 5,800 square feet), with new food and product offerings and new media and technologies, and they will incorporate our new ‘green’ initiatives to help save energy and improve the environment,” Hartman said. “Although the economy is slowing, we are trying to do our part to keep all our great construction-worker customers working. It’s going to be a busy, exciting year for all of us.” 
Food Focus
Rutter’s is a company with a long, proud history, so Hartman’s goal was to develop a prototype befitting the family name. The latest design is a far cry from the convenience store of yesteryear. The prototype boasts a modern design, including open ceilings, extensive use of floor and wall tiles, bathrooms with floating ceilings that cost about $60,000 to design, music and other upscale accents. The design is environmentally friendly, including a white roof to keep the building cooler while reducing energy demand. 
The store features Rutter’s latest foodservice offerings, including custom stir fry, fajitas and fresh-baked breads. Customers can design their own “oriental bowls” by choosing from chicken, beef and pork; fried rice, white rice, noodles and veggies; and various toppings and dressings. Customers can mix and match ingredients to create custom steak, chicken and veggie fajitas. The sub and cibatta rolls also come in seven varieties.
“We’ve spent months developing a menu that’s not typically associated with a convenience store,” said Jerry Weiner, Rutter’s vice president of foodservice. “We’ve positioned ourselves to compete against restaurants as well as convenience stores. And yet we’ve retained the ‘fast’ aspect as every item on our menu can be prepared in less than four minutes from the time one of our team members starts to work on it.”
Additionally, a chilled grab-and-go gondola offers a variety of sandwiches and local delicacies, such as red beet eggs, right in the center of the store. Within arm’s distance is the fountain and frozen programs. For customers looking to dine in, there is seating for up to 12.
The store, in a word, is impressive. It has the look and feel of a high-end restaurant, without sacrificing a single element of convenience. In fact, wide aisles and the open floor design make it easier not only to navigate the many offerings, but to see them from afar, a feature that will speed up service for customers looking to get in and out quickly. Plus, it offers 20 cold and frozen display doors neatly marketed in the background that offer everything from national brands to locally-produced and proprietary dairy items.
“We tweaked the look here and there, but we are confident that we have executed a design that will stand the test of time for years to come,” Weiner said. “It’s a total departure from the old Rutter’s look, not only from a design standpoint, but from what we are offering. This is a high-quality food, designed and developed by restaurant professionals in a setting that looks more restaurant than convenience store.”
Emphasis on Service 
To back up his lofty foodservice goals, Weiner recruited from numerous local restaurant chains—Panera Bread, Olive Garden and Chi-Chi’s, among others—to aggregate their experience as foodservice managers. Rutter’s also puts these managers on the payroll for training months before their store even opens.
“By the time the store opens its doors, managers have a handle on every aspect of the store, from training new employees to cooking up an entree,” Weiner said. “When you’re talking about the kind of investment we are making in these units, there is no room for error, so we start at the beginning with a skilled manager and build the team up from there.”
The front counter is another attractive feature. Reminiscent of the home plate design, the employees are positioned between two entryways, offering them an unobstructed view of the entire store. Opposite the front counter is the coffee offering, positioned just beyond one of the entryways with a toppings bar to enhance the overall brew offering. Other store amenities include fresh bakery items, a seating area and a surcharge-free M&T Bank ATM.
“To me, this is one of the most impressive floor plans I’ve ever worked on,” said Jeff Leedy, senior vice president of marketing for Rutter’s. “In some older stores, you walk around displays that you either see or trip over. Our focus was to open things up a little bit so customers can walk around the store and get what they need, not dance around obstacles.”
While the first of the new units opened in April, several of the stores were originally slated for opening in 2007. Permitting and other distractions slowed construction to a virtual standstill. Hartman estimated the zoning and permitting process takes two to four years per store. Construction, by comparison, takes just 110 days. 
“Lawmakers drive up the cost of everything,” Hartman said. “Pennsylvania is very municipal-based. It’s not like you go to this one county government and they decide on 40 stores. The want to see studies, approvals, etc. The more rules they place, the more they increase costs.”
The new units are a combination of raze-and-rebuilds and new-to-industry sites. Since the company aims to own the property its stores are on, it prefers to focus on rebuilds, Hartman said. But it won’t back away from a good piece of real estate.
Giving Back
While the store spares little when it comes to its dynamic design, Hartman has established himself as an industry leader who holds back little when it comes to giving his personal time to benefit the greater good of the industry. He has been instrumental in pushing technology standards that allow convenience retailers to compete more effectively with supermarkets and mass merchandisers.
“I’ve said for a long time that our industry is probably the most complex technologically of any industry out there,” Hartman said. “What we do is throw a myriad of technological challenges at entry-level employees. I don’t know what other type of business does that. We throw fast food at our employees; we throw lottery; we throw managing gas pumps and authorizations at the employees; we have them scanning; we have them using hand-held devices and things to place orders. In the past, so much of that was unintegrated, and you had to train them on every single device. 
“What some of the standards and integration efforts are about is cutting down the number of devices they need to be trained on and learn to use.”
Hartman’s distinguished career is also highlighted by his service as chairman of the National Association of Convenience Stores (NACS) in 2007, chairman of the Petroleum Convenience Alliance for Technology Standards (PCATS) in 2005, as well as membership on the boards of the Pennsylvania Food Merchants and the Pennsylvania Responsible Tobacco Retail Sales Certification Program.
“The industry has been very good to us,” Hartman said. “It would be easy to build stores and not give anything back, but I feel it’s my responsibility to be thankful for what we have and lend my experience to the industry where it’s needed.” CSD

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