The convenience store industry should take a chapter from the big automakers’ book and adopt the stellar performance of our industry’s current “Big Seven” c-store operators.
By Jim Callahan
The fuel shortage that occurred in the 1970s changed the perception of foreign compacts and their superior fuel mileage. America’s gas guzzlers quickly lost favor as gas and diesel prices skyrocketed from 39 cents per gallon to more than $1 and much higher in the ensuing years.
The Big Three U.S. automakers were slow to react as consumers began to realize that not only was “their” fuel mileage superior to “ours,” but so was the car quality. Automakers still felt secure, but national pride would carry the day for only so long.
Indeed, jokes began to permeate the air warning prospective auto buyers to avoid buying an American vehicle that was built on either a Friday or a Monday, as the weekend was for partying and Monday was “hangover day.”
Sadly, we became the joke and Japanese and European vehicles became the standard by which automotive quality was measured. Strong competitors forced the Big Three to improve and they did it in dramatic fashion while vastly enhancing innovation, style and gas mileage—gas mileage that has contributed to the relatively stable fuel pricing we enjoy today.
So what, you may ask, does all this have to do with the c-store industry? Retailers must share the drive U.S. automakers adopted to compete again. After taking the status quo for granted, the Big Three got lean, mean and inventive, regaining much of their past luster.
Similarly, the convenience store industry must take a chapter from those automakers’ books and react to the parallels drawn between the auto industry and the stellar performance of our industry’s current “Big Seven” c-store operators.
The major oil companies lost an enormous portion of their dominance by refusing to learn from retailers such as Love’s, Kwik Trip, Pilot Flying J, Quik Trip, RaceTrac, Sheetz and Wawa—the Super Seven, in my opinion.
Let us also learn from the oil industry’s history, which dominated at retail for the first 100 years, with earnings that consistently found them at the top of the corporate earnings ladder.
Ask yourself the questions: is good, good enough, and when can we rest on our laurels? The answer to both is the same—never. Change is inevitable; since these are “cheese moves” (from the book of a similar title about affecting change rather than excepting it), and if we don’t embrace that popular theory we will become just another sad, historical footnote.
Moreover, the oil industry failed to master the difficult art of inside sales, while neglecting to make a palatable biscuit or turkey wrap, or bring an innovative drink and foodservice program to market to keep pace with those aforementioned retailers, who had built a stellar mouse trap.
Shifting their eggs of expertise into more profitable baskets, the oil industry players finally sold (skillfully acquired and artfully chosen) prime retail locations, choosing to stick with what they did best.
Those companies continued as preeminent fuel suppliers, traders and exploration experts. They excelled in market areas in which they were more capable, compared to selling drinks and making the perfect biscuit.
By eliminating enormous overhead associated with real estate, the major oil entities continue to score high with great investment returns, allowing them to paint enviable profit portraits in the U.S. stock markets.
No matter how good the performance level of your operation, find your company’s weakest link—we all have them—and take the steps to improve and narrow the gap with those highly successful c-store chains.
If small, medium and even large c-store retailers are to survive and thrive, they must recognize their strengths and weaknesses and accomplish their own reinvention if needed.
Jim Callahan has more than 40 years of 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].