Facing one of the most difficult financial crises in the nation’s history, convenience store operators must maximize store performance and drive efficiencies.
That old axiom “fall back, spring ahead” takes on an entirely new meaning for 2009. Faced with the worst recession in more than half a century, springing ahead means fighting for survival for most of us who are trying to navigate the stormiest weather this industry have ever seen.
And in case you haven’t noticed, it’s not just small operators. Caught square in the apex of this rare, if ever-before-seen economic “Bermuda Triangle” are highly successful, well-run companies like Flying J and many others. Suddenly, the industry isn’t so recession-proof.
What leg of the triangle does one attack first? Shameless and recently bailed-out banks are no longer willing to make loans to longtime customers with great track records. Does the term “pulling the rug out from under you” mean anything? Then there’s the illusionary futures market that has all of us wondering which way fuel prices will go. What’s left is the third leg: improving operations. This is no doubt a tough task, but of the three it’s the one that convenience store owners have the most control over.
To operate more efficiently operators are advised to:
• Get a handle on expenses. Be willing to make the tough decisions. Examine every line on that P & L and know what makes up the line. Can it be justified? Should it be justified?
• Force yourself to sell off nonperforming assets and take aim at underperforming stores. Certainly it’s a poor time to get a great price on these assets, but ask yourself, “Can I afford to carry this asset in this business climate?”
• Spring ahead with a well thought-out plan to maximize sales. Make every effort to keep fuel competitively priced in order to drive more customers inside the store. Once they’re in, “wow” them with outstanding service.
This economy demands constant and meaningful specials for customers. “Two-fers” allow a larger ring while affording customers value. Be sure to involve your vendors. If you’re slow, so are they. Go the extra mile and don’t fail on the small things. Image is paramount!
• Make a full commitment to foodservice—the industry’s brightest minds say you can’t survive without it. Involve your grocery wholesaler in your plans. They have great information, ideas and contacts. Operators like Sheetz, Wawa and QuikTrip have raised the bar for us and customers no longer consider c-store food a secondary option. Ride their coattails.
Also remember customers like one-stop shopping, and they rely on quick, inexpensive meals. No one is in a better position to accommodate them than we are. Explore options like creating a snack deal that might include a Coke and a Reese’s candy bar, or coffee and a doughnut. A meal deal can be as simple as a hot dog, a bag of chips and a fountain Pepsi. If you’re already doing this, explore ways to improve it. Generate some excitement like using a fan to send the scent of fresh pizza from your ovens throughout the store at mealtime, offering product samples and developing new point-of-purchase displays—anything to get customers’ attention. If you’re not already in foodservice don’t wait until the storm subsides.
• For those still in good financial shape, there will be many opportunities for growth. Keep a nest egg and make it a point to know the up-to-the-minute thinking of your bankers’ bosses before making any acquisitions. Show restraint and act only on the best opportunities.
Above all, keep a positive attitude and let it shine through for all to see. And remember, when things are going bad it’s never as bad as it seems, just as when things are going good it’s never as good as it seems. Don’t lose sight of the fact that after most every rough storm, there is indeed a rainbow. Best of luck finding yours.
Jim Callahan has more than 40 years experience as a convenience store and petroleum marketer. His Convenience Store Solutions blog appears regularly on CSDecisions.com. He can be reached at (678) 485-4773 or via e-mail at [email protected].