By John Lofstock, Editor
Innovation, outstanding operations, superior leadership and an ongoing commitment to con- venience retailing are the common characteristics of the best convenience store chains in the industry. Family Express embodies all of these qualities and more. That’s why Convenience Store Decisions is proud to honor Family Express as the 2015 Convenience Store Chain of the Year.
The Chain of the Year award, now in its 26th year, is the oldest and most prestigious award for convenience retailing in the industry. Family Express supplants Atlanta-based RaceTrac Petroleum as Chain of the Year, considered the gold standard in convenience store retailing.
While many chains say they are committed to retail excellence, Family Express has taken steps above and beyond to not only ensure retail great- ness, but to build a legacy. And that legacy starts with company Founder, President and CEO, Gus Olympidis, who opened his first store on Christmas Day in 1975. Over the next 40 years, Family Express would become a house- hold name across the c-store industry.
“Forty years is a long journey. I can’t really think of many things in the space of convenience that we do today as we did some 40 years ago, perhaps with the exception of one thing, relationships. Relationships matter with employees, they matter with communities and they matter with suppliers. They even matter with competitors because there is so much more uniting us along the learning journey of delighting customers,” Olympidis said. “While I am grateful for the recognition of Chain of the Year, I accept this honor in celebration of relationships that have helped Family Express evolve and flourish.”
Family Express, headquartered in Valparaiso, Ind., operates 65 stores and employs nearly 700 men and women throughout northwest and central Indiana. While many chains say they are committed to retail excellence, Family Express has gone above and beyond to not only ensure retail great- ness, but to secure its legacy in the convenience store industry. Olympidis should be lauded for his vision of what his convenience store chain could be and the fortitude to go and get it done. While there are chains that are bigger, there is no one that works harder than Family Express. The company continues to push the boundaries of innovation for a mid-sized, family- owned convenience store chain. One crucial distinctive area that sets Family Express apart from most other convenience stores is its focus on logistics. In 2010, the chain opened its own 150,000-square-foot distribution center in Valparaiso. Just three years later, it added a central bakery, where today it can produce up to 50,000 square- shaped doughnuts, traditional muffins, and other pastries per day that are delivered to its stores daily.
The Family Express logistics model is organized along two separate tracks. The delivery of perishable goods and housing private label, self-stable products. These products are distributed to stores by the iconic Family Express blue moo trucks, which are a fixture along Route 49.
At the end of the business day, sales for each store are reviewed and a list is compiled of items that need to be restocked. By rethinking how the company stocks its stores, it has been able to cut the number of deliveries to individual stores from more than 30 per week from individual suppliers to just one per day. The once-a-day delivery includes fresh sandwiches, chips, frozen pizza, milk, bread and pastries. As a result of this system, only 10% of Family Express deliveries arrive via direct store delivery (DSD).
The weekly delivery of dry goods is a unique logistical collaboration between Family Express and Eby Brown. The relationship between the two has spanned 40 years. “Our unique business model could never have prospered without support from our supplier partners. This important relationship with Eby-Brown started with Dick and Tom Wake’s late father, Bill Wake in the early 70s,” Olympidis said.
To complement the distribution model, the company’s marketing team has created a series of brands exclusive to Family Express. These brands have helped create a unique identity for the chain. For example, the European Cafe espresso program, which offers cus- tomers a barista-style signature drink experience, is superior in quality and consistency to the coffeehouses. Other proprietary brands include the popu- lar Cravin’s Market foodservice line, Family Express Natural Spring Water, Java Wave gourmet coffees and teas, and Buzzed Energy drinks to name a few, as well as several grocery items.
The development of the distribution center and its in-store programs have been a game-changer for Family Express.
“It’s a matter of efficient versus inefficient delivery. When you push the envelope of innovation you usually have some unpleasant surprises. We have had our share of those, but we also have had some pleasant surprises that were not anticipated. The biggest one was unsurpassed freshness,” Olympidis said. “Typically you don’t go to the convenience store for freshness, but because of our logistical model and our automatic replenishment wherewithal, we can offer the consumer a gallon of milk that has two weeks of shelf life or about. The big box cannot do that, thus unsurpassed freshness becomes a competitive advantage.”
COMMITTED TO CULTURE
Still, the chain embodies so much more. It is firmly committed to the “living brand” concept. The living brand encompasses all that Family Express has become, and all it hopes to be, and is woven into the fabric that makes Family Express special. It is a systemic commitment to retail excellence that begins with the employees. In fact, the living brand has evolved to become a palpable entity that connotes trust, commands respect and guarantees a standard of excellence that employees carry with pride and customers have come to expect during each visit to Family Express.
To foster the living brand, the company built a $4 million, 30,000-square-foot headquarters and learning center in Valparaiso featuring a full-scale, functioning Family Express store to train employees and test new products. Adjacent to the training store is a state-of-the art learning center where an employee in training is subjected to about 50 modules of custom computer-based curriculum. The headquarters also includes a state-of-the-art fitness center that is available to all company employees and their families.
Before any new employee can be placed in a store, job candidates are thoroughly vetted. These screenings, to help identify new employees, are as much cognitive as they are cultural with the goal of inspecting the candidates’ DNA. Do they possess people skills? Can they solve problems? And do they understand “customer first” is not a motto, but rather the mission? The company is so serious about screenings and testing that just 80% of those invited to training achieve graduation and gain permanent employment with Family Express.
While most companies hire with the intention of teaching new employees retail skills, Family Express focuses on a person’s natural inclination to “relationship,” and simply allows and encourages them to build relation- ships. The results speak for themselves.
The company’s workforce may be the most productive sales force in the convenience store industry. Its frontline employees generate a remarkable $150 on in-store sales per labor hour.
“The Family Express challenge isn’t necessarily getting everyone to buy in to what we are doing here,” Olympidis said. “The challenge lies in having the efficient mechanism in place to identify the people that are genetically and instinctively inclined towards building relationships. This is where our industrial psychology- based assessment process is helping us to identify folks that are that way, as opposed to trying to convince people to buy into a concept that is not compatible with their personality or their natural inclinations.”
It is precisely this kind of innovation and connection with customers that sets Family Express apart from its peers, serving as another reminder that the innovation driven by family- owned businesses continues to be an integral part of the c-store industry.
To recruit qualified employees that share in its vision, earlier this year Family Express launched the “YOU MATTER!” initiative. The announcement included a program announcing a $10 hourly wage at Family Express, months before Walmart had announced its intention of moving its starting wage to $9 per hour sometime in the future.
Getting to this point was very much an evolutionary process for Olympidis, who is also a tireless legislative crusader who regularly communicates with lawmakers on behalf of the industry at the federal, state and local levels. “Eventually, you come to the realization that a successful hire is clearly predicated on science, but there is also an art to it. And anytime you com- bine art and science you have failings,” Olympidis said.
“For us, the ultimate deciding factor of fit is the assessment by our training professionals as to whether a candidate has tested well, has successfully completed traditional HR screenings such as drug testing, credit and criminal background checks, and whether that person has successfully completed an assessment process that says he is a friendly person or a relationship- inclined person,” he added.
Just how serious is Family Express about being able to deliver its high expectations? Consider that the company had a store in Valparaiso, which was a popular destination for area residents.
Sales grew, but since the lot size was too small to grow, expanding to offer all of its new programs was difficult. Rather, Family Express made the call to shutter the store for good even though it was generating a six-figure revenue stream annually.
“We could no longer deliver the full promise of the brand at this particular store,” Olympidis said. “We cannot justify this to our loyal customers.”
This is the forward, out-of-the- box thinking that has earned Family Express Chain of the Year honors.
“I often think of the childhood story, ‘The Little Engine that Could.’ In so many ways, I think that our little company is the Little Engine,” Olympidis said. “Unlike the original Little Engine that had to go up the hill one time, we have to do it every single day in a competitive marketplace. For as long as we continue to entrust our living brand to be the conductor of our engine, I believe that our best days are ahead of us.”