Kwik Trip: 2018 Chain of the Year

With its unsurpassed vertical integration and decades-long commitment to co-workers, guests and the communities it serves, the chain exemplifies what it means to be a “people company.”

By John Lofstock, Editor

Honesty and integrity, respect, humility and innovation. These are the words that define Kwik Trip Inc.…and it shows.

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The La Crosse, Wis.-based convenience store chain exemplifies what it means to be a “people company.” It is fully committed to guests, co-workers and its vendor partners, not as a strategy to grow the business, but because it’s the right thing to do. When this is your core mission, greatness surely isn’t far behind. The chain serves as a shining example of how to serve others and for this reason Convenience Store Decisions is proud to honor Kwik Trip as the 2018 Convenience Store Chain of the Year.

Kwik Trip is the 29th Chain of the Year and the second two-time winner of this prestigious award. It was first honored by CSD in 2004.This honor highlights remarkable consistency and a commitment to excellence—to customers as well as employees—over a very long period of time.

“Our business model is pretty simple and boils down to two things: For Kwik Trip to be successful, we need to take care of our co-workers and our co-workers need to take care of our guests,” said Don Zietlow, Kwik Trip’s venerable founder and CEO.

Kwik Trip takes its lead from Zietlow, whose boundless energy and passion for the convenience store business hasn’t slowed one bit even as he is in his 80s. Kwik Trip was molded after his core belief that when you take care of your people, the business will have a solid foundation to drive customer service.

“We have a wonderful opportunity every day to make people happy. There is a lot of hard work that goes into this, but the very core of what we do is making people happy—that’s our co-workers and our guests,” Zietlow said. “In my earlier years, I spent a lot of hours at work thinking about what our business model should be and how we would grow the company. It always came back to taking care of people. When you do that, customers will be around for a long time.”

This is such a core principle at Kwik Trip, Zietlow wrote it into the company’s mission statement: “To serve our customers and community more effectively than anyone else by treating our customers, co-workers and suppliers as we, personally, would like to be treated and to make a difference in someone’s life.”

DYNAMIC OPERATIONS
When one examines the workings of Kwik Trip, the first thing that comes to mind is the vastness of its operation. In a convenience culture, where customers demand great service, quality and a memorable shopping experience, Kwik Trip exceeds expectations every day. From its employees to its first-class facilities, it simply has no weakness.

“I’ve always believed that competition makes us better and that we can learn a lot from other operators,” Zietlow said. “Since the 1960’s we have had great competition from folks like Speedway and Kroger, who are very good at what they do, so that was a challenge to us to be better. I don’t mind the competition. It’s part of the game in this area. When you look at Iowa, Minnesota and Wisconsin where we operate, there aren’t big population increases. So the new business that you get, you have to take away from someone else. It’s a tremendous challenge, but we also see it as a great opportunity.”

Kwik Trip remains one of the country’s fastest-growing family-owned and operated convenience store chains. Today, it operates 640 stores in three states and should get to 700 by the end of 2019. Its 22,000 employees serve about 1.2 million customers daily.

Since it was founded in 1965, Kwik Trip continues to grow and innovate. With multiple generations of family ownership, the chain continues to find new ways to embrace and strengthen communities through a commitment to local sourcing and high standards.

Over the years—and what makes the company stand apart from many of its peers—is that it has evolved organically into a vertically integrated company with unmatched operations for a family-owned convenience store chain. The company’s production and transportation divisions allow the chain to provide quality products and keep costs low.

Additionally, Kwik Trip was an early adopter of selling and using compressed natural gas (CNG) in its own trucking fleet, which is operated by its Convenience Transportation subsidiary. The fleet delivers fuel and products to stores daily and has substantially reduced greenhouse gas emissions every year since 2011.

Supporting its 640 stores is a 360,000-square-foot state-of-the-art distribution center and commissary. With its 450-plus employees, the hub delivers more than 6,000 products to every store in its network through its trucking division every single day. Plus, the company operates a 176,000-square-foot dairy, also in Wisconsin, that produces proprietary ice cream, milk, juices and teas.

After some smart investments, Kwik Trip is able to control every aspect of its operation, from the amount of flour that goes into each of the millions of pizzas it makes and sells annually, to the healthcare costs of its workforce. Another attainable goal was bringing fresher products to its store shelves daily.

“We sell millions of gallons of milk and most of that comes from farms in southwest Wisconsin and southeast Minnesota,” said Steve Loehr, Kwik Trip’s vice president of operations support and a 30-year company veteran.

Additionally, since 2005, stores began introducing a greater selection of foodservice items that are guaranteed to be fresh. For example, the chain currently sells 3.5 million doughnuts a week—approximately 800 per store per day, according to Zietlow. That same year, open-air cases were installed to showcase the fresh products, including packaged salads. Hot foods were first introduced in 2003.

Today, many hot foodservice menu options are prepared on site to further ensure their freshness. Next was a broader array of bulk produce typically associated with grocery stores, such as loose potatoes. And of course, every store stocks a variety of fresh fruit, including cut and packaged varieties. Stores were even updated with refrigerated units to hold fresh cut steaks, pork chops and chicken.

“People use their local Kwik Trip as their regular grocery store because we provide fresh meat and produce. We think of ourselves as grocers that sell gas rather than gas retailers that sell a few bananas,” Loehr said.

The process of adding fresh items—and persuading customers to view Kwik Trip as a fresh-food retailer—was a gradual one.

“It takes time for customers to be comfortable with buying more food from convenience stores,” Loehr said. “It took a while for people to see the salads. It took visit after visit and seeing others eating them.”

PEOPLE COMPANY
Kwik Trip’s commitment to its people drives its success. This commitment to retail excellence has also garnered national attention. So far in 2018 Kwik Trip was voted the No. 1 Top Workplace in Wisconsin by the Milwaukee Journal Sentinel. It also placed No. 65 on Forbes’ List of Best Places to Work in the U.S.

Kwik Trip shares 40% of its pre-tax profits with workers and allows long-time workers to become equity owners of the company’s stores. The results speak for themselves: The company has a low turnover rate of just 30%. Corporate Support Center turnover rate is under 1%. Industrywide, the average turnover rate is 77%, according to The National Association of Convenience Stores (NACS).

“When you look at our marketplace, we are different than New York, Chicago or Atlanta. We are primarily in rural areas so to grow the business I knew that we would have to take care of our co-workers and pay them well and have them share in the profits if we wanted them to support our mission to serve our customers,” Zietlow said. “Once we knew we could provide great service, we decided to drive our business with commodities like bread, milk, butter, eggs or whatever customers needed. As we grew, we could get our prices down and that allowed us to introduce foodservice and some of the other products that we have in Kwik Trip today. The model proved to work, but all of this began by taking care of our co-workers.”

While many retail businesses are able to build big new stores and create brand excitement, they often fail when it comes to delivering great service. Kwik Trip makes people a priority, which has been a key distinction from competitors. From modest beginnings 53 years ago, Kwik Trip isn’t the manifestation of the entrepreneurial spirit that drives the convenience store industry, it is that entrepreneurial spirit, but it’s also much more. Kwik Trip is innovative, generous and community-minded, which is no doubt a product of Zietlow’s humble upbringing, in which he had to work for everything he earned.

While he sits atop the Kwik Trip landscape today, Zietlow began his career in the industry as a truck driver on the midnight shift at a foodservice distribution company. His hard work and business acumen saw him rise to president of the company in the early 1960’s. He then teamed with John Hansen to launch the convenience business with a single store in Eau Claire, Wis.

In 2000, the Zietlow family bought out Hansen and acquired 100% of the company. Then, Zietlow and his family assumed $280 million in debt, and borrowed $300 million from banks, harboring little doubt that accomplishment would follow. That’s because he believed in his people, himself and the concept of doing things the right way.

So while people see the success Kwik Trip has achieved, the company itself is a constant reminder that you often have to take great risks to have great success.

“Our mission statement says that we will treat others the way we would like to be treated and that we will try to make a difference in someone’s life,” Zietlow said. “Kwik Trip will persevere not because of great locations and good prices, but because our goal is to take care of our co-workers and make a difference in people’s lives.”

Kwik Trip At a Glance
Since 1965, Kwik Trip Inc. has operated friendly, family-owned convenience stores in communities throughout Wisconsin, Minnesota and Iowa. Today, the company has 22,000 co-workers serving guests at more than 640 stores. The chain, which shares 40% of its pretax profits with co-workers, is consistently ranked as a Top Workplace in each of the three states it operates.

Headquarters: La Crosse, Wis.
Store Count: 640, with plans to get to 700 by the end of 2019.
Guest Count: More than 1.2 million customers daily.
Markets of Operation: Wisconsin, Minnesota and Iowa
Retail Brands: Kwik Trip, Kwik Star, Tobacco Outlet Plus Grocery
Operations: In addition to c-stores, Kwik Trip company operates a 360,00-square-foot distribution center and a 176,000-square-foot dairy in Wisconsin, both of which make daily deliveries to every store in the network. It also operates a trucking fleet under the Convenience Transportation subsidiary, which handles the deliveries of store items and natural gas (CNG).

Embracing Loyalty
Formally launched in Feb. 2018, Kwik Trip’s new Kwik Rewards loyalty program has reached two million members. Don Zietlow, founder and chairman of Kwik Trip said the c-store chain is doing more than eight million loyalty transactions per month.

This explosive growth follows the loyalty program’s introduction of 15th visit rewards, punchcards, exclusive coupons and stackable fuel discounts with opportunity to upgrade to debit and credits options for an added bonus. The key to making it all work is the variety of rewards available, from long-time favorites like Nature’s Touch dairy products and Kwikery Bake Shop sweet goods to new and limited-edition vendor items. Rewards are always changing to keep things fresh and ensure there is always something for everyone.

“The Kwik Rewards program has allowed us to engage with our guests in ways we’ve never been able to before. From visit rewards to fuel discounts, each member is able to find unique value with Kwik Rewards,” said David Jackson, digital marketing and loyalty manager.

What’s even more impressive is that the chain built the loyalty program internally. “We have been working on this for three years. It’s not cheap and it’s hard to execute, but it’s an outstanding program that our customers want,” said Zietlow, who estimates that about 36% of his customers are now participating in Kwik Rewards.