No longer a retail stepchild, convenience stores have held up remarkably well during the COVID-19 pandemic, while other “non-essential” retail sectors have faltered.
Exceedingly high rack-to-retail fuel margins mitigated reduced fuel demand and helped insulate our industry from the ugly situation faced by quick-service restaurants, casual dining and general retail. For investors and lenders, the c-store industry continues to represent one of the safest bets for deploying capital. This will continue to foster a strong mergers and acquisition climate, while helping to maintain high valuation multiples.
As the country seeks to find some sense of normalcy after the tedium of the lockdowns, store operators have a unique opportunity to step up their game and make a lasting impression in their respective markets.
Now more than ever, marketers that strive for operational excellence will not only set themselves apart from competition but will help ensure long-term profitability and business value.
Marketers should pragmatically ask themselves the following questions about their store operation:
- Is it performing to its highest potential?
- Can we succeed in an increasingly sophisticated competitive environment?
- Can it withstand the test of time?
No matter how well one believes their stores perform, there’s always room for improvement. The fragmented nature of our industry is a testament to the independent nature of retail petroleum operators. Many are reluctant to seek advice from outside their organizations. Yet given the imperatives for operational excellence, pragmatically accepting support from a qualified independent resource is smart business.
Consider an Outside Opinion
A professional c-store operational adviser can provide an arm’s length assessment of store operations, focusing on all facets of the business including product, personnel, merchandising, marketing, advertising, loyalty and the interface with forecourt fueling. The adviser will also outline competitive strengths and weaknesses, highlighting sites for raze and rebuild consideration. The adviser then provides a comprehensive report outlining areas of improvement to increase store or chain performance, competitiveness and overall profitability. Just one unique recommendation can more than pay for the cost of the assessment.
Retaining the services of an adviser begins by contacting industry references to confirm the person’s experience and industry credentials. Most advisers have a structured process for both single site and chain review. Understand this process, including information to be provided in advance of any site visits. A comprehensive review of this information will enable a general understanding of the business and provide a basis for the field work to follow. To minimize internal disruption, assign a point person knowledgeable of store operations to assemble and provide requested information. Communicate with the management team that cooperation is paramount to ensure the most reliable recommendations, while stressing that the assessment process is a positive tool, not something negative or intended to find fault with anyone on the team.
Depending on the scope of the assignment and workload of the adviser, the entire engagement should take around 90 days, including pre-visit data review, store assessment, followed by a post-visit period where the report and recommendations are formulated. A subsequent visit will generally be made to report the findings, reach consensus on next steps and develop an action plan for the deployment of accepted recommendations.
Retaining the services of a qualified c-store operational adviser will help ensure continuous improvement of store performance, while supporting brand relevance, customer loyalty, profitability and business value. These long-term benefits will far outweigh the nominal cost for these services.
Mark Radosevich is a 40-year petroleum professional and active industry advocate. He is president of PetroActive Real Estate Services LLC, offering confidential mergers & acquisition advisory support and financing services exclusively to petroleum wholesalers. Contact him at [email protected], (423) 442-1327 or visit www.petroactive.net.