Jack Kofdarali, president of J&T Management in California and the incoming NACS chairman, discusses the obstacles retailers will face over the next year and the benefits of political advocacy.
By John Lofstock, Editor
The convenience store industry continues to evolve, becoming a bigger part of the American consumers’ daily lives.
In 2014, the industry again experienced solid growth recording $697.5 billion in overall sales, despite a dramatic dip in fuel prices, according to the 2015 NACS State of the Industry report. In-store sales experienced a strong 4.6% sales growth to $214.9 billion.
The U.S. c-store count increased to 152,794 stores as of Dec. 31, 2014, an almost 1% increase—1,512 stores—from the year prior, according NACS/Nielsen data. C-stores also account for 33.9% of all retail outlets in the U.S.
Despite the positive numbers, the industry still faces an uphill battle as it faces regulations and competition from all sides. Through the years, the industry has been able to prosper despite these challenges, but strong leadership and retailer advocacy are needed to stay ahead of the game.
“We do things that other industries can’t because we share so much. This culture of sharing means that when we need to, we can mobilize and speak as one,” said Jack Kofdarali, president of J&T Management in Corona, Calif. “Overcoming obstacles and coming together to control our destinies, speaking with one voice and getting the job done is what this industry is all about.”
Kofdarali, who operates more than 30 ampm stores in California, is the new incoming chairman of the National Association of Convenience Stores (NACS). He sat down with Convenience Store Decisions to discuss what retailers can expect over the next 12 years.
CSD: What do you see as the main issues facing the industry today?
JK: Regulations continue to be a burden from all angles — cities, states and the federal government — and there is no end in site. Convenience store retailers have to learn how to be savvier to navigate these regulations and still outperform their competition.
The days of surviving on cheap gas and cigarettes are over. With high credit card fees, you can’t sell gas for pennies over cost. Customers are demanding more inside the store and cigarettes will continue to decline, that means we need to learn how to expand into areas like fresh foods. That’s a big transition.
Plus, the big box retailers are getting more serious about tying inside purchases with gasoline and giving significant discounts at the pump. Our industry must figure out a way to deal with this. Creating loyalty programs with smaller grocers in your area or creating your own loyalty program is becoming a necessity.
CSD: How do you see the National Association of Convenience Stores addressing these concerns?
JK: NACS is doing a fantastic job through its Political Action Committee (NACSPAC) of lobbying on the Hill to protect our industry, but retailers must get more involved both on the Federal level with NACSPAC and on the local level with their city council members, state assembly men and women and other elected representatives. That’s where many important battles are won and lost.
Collectively, we must have our representatives get familiar with our industry, and we need to tell them our great stories, the wonderful services we provide to our local communities and help them understand that the decisions they make will impact our industry, our families, our employees and their constituents.
CSD: How important is retailer advocacy? What kind of a difference can retailers make at the local, state and federal levels to ensure a viable industry?
JK: It is extremely important. While NACS doesn’t get involved at the local level, many state associations do a fine job of getting the word out to retailers of what they can do locally.
Combined with NACS’ efforts, we can be very effective, but it’s up to us retailers to get involved and educate every one of the challenges we face, the contributions we make, the taxes we produce and the employment we provide. Oftentimes, the local officials are the one who rise to state and federal levels later. It is best to educate them early on and keep them as friends and industry allies.
CSD: Convenience store retailers currently sell 80% of the country’s motor fuels, but the fuel industry is changing. What’s the next step for industry retailers? Should they be investing in renewable fuels, electric charging stations, etc.?
JK: Our industry has to remain flexible to be able to sell liquid fuels as they become legal and viable to sell. I think NACS is doing a great job with the Fuels Institute in determining the road ahead. I rely on them heavily to tell me how to steer and navigate the road to future fuels.
CSD: The country’s demographics seem to be shifting and the core convenience store customer is changing right along with it. How must convenience stores evolve to serve this new demographic while still holding on to core customers?
JK: I believe our stores need to get more into serving fresh foods and ready-to-go foods as more and more of our customers see us as the preferred destination for their foodservice needs, as well as their daily snacking needs. The industry must continue to evolve and elevate our image.
That bottom tier of operators, whose stores are dirty and look terrible, is bad for business. It hurts our image and the industry overall. We have to be better.