Coffee, cigarettes, beer, technology, foodservice. Pick any one of these categories, and Handee Marts President Mike Triantafellou will approach it with unbridled enthusiasm.
Take cigarettes. Convenience-industry experts say cigarette sales in the near future could get bogged down, if not slain, by unfriendly legislation like the SCHIP bill, or by local governments that forbid tobacco sales in select retail channels.
Maybe, Triantafellou said. “But whether we have to sell them out of a locked safe or whatever, we’re going to sell them as best as we know how.”
Analysts say, too, that PCI compliance will eat up sizable chunks of this year’s capital budgets. Maybe, Triantafellou said. “Some years, our capital goes totally toward remodeling. This year, PCI is a big piece of the puzzle.”
Either way, Triantafellou and his team figure they’re still making a valuable technology investment in the 62 7-Eleven stores that fall under Handee Marts’ umbrella. Nine of the stores are operated by Handee Marts itself, while the remaining 53 are operated by franchisees.
“Our stakeholders want to make sure we’re reinvesting in the franchisees and their locations to keep them as fresh as possible,” Triantafellou said, “whether that means remodeling and resetting stores on a regular basis or presenting other initiatives.”
Experience Matters
The second-oldest 7-Eleven licensee in the nation, Gibsonia, Pa.-based Handee Marts has learned a little something about time-tested investments. The company’s founders, the Turner family and Turner Dairy, became a 7-Eleven licensee in 1969, when 7-Eleven operated as The Southland Corp.
The Turners were looking for a place to sell their dairy products, and ended up growing by about three to four stores a year. As a licensee, Handee Marts is affiliated with 7-Eleven’s international operations, rather than the national operation. It has stores in Pennsylvania, Ohio, Maryland and West Virginia.
“We follow the same beliefs and model as the 7-Eleven model, and provide the same type of franchise agreement,” Triantafellou said.
Forty-four of Handee Marts’ stores offer fuel, with brands including Exxon, BP, Citgo and Valero.
Handee Marts has always been hands-on with its 7-Eleven franchisees—it’s one of just a handful of 7-Eleven licensees in the U.S.—and it offers ample resources for marketing, store planograms, category management, capital investments and more. The company pays occupancy costs and all major utilities at its franchisees’ stores, as well as offering them accounting and human resources services.
“The franchisees aren’t required to follow these programs, but the majority do,” Triantafellou said. “Some locations, for instance, decide to go with their own pricing.”
Getting franchisees to buy into best practices and new programs isn’t always the easiest sell, but case studies and hard evidence typically convince the 53 store operators to align their programs with Handee Marts’ agenda.
Take the coffee program. “7-Eleven and coffee go hand in hand,” Triantafellou said. “It was determined through the marketing department that the programs at 7-Eleven corporate—the island-type coffee bars, as opposed to those against-the-wall coffee bars—made more sense.”
The Handee Marts team showed franchisees that coffee sales and customer satisfaction improved at stores that used the island coffee bars. Add to that the fact that Handee Marts paid for all the equipment upgrades, and the franchisees were game.
“We went out and redid the stores, building the coffee-island presence closer to the front of the store, as opposed to wherever you could fit it in back in the old days,” Triantafellou said.
The company is spending much of this year investing in store and equipment upgrades, though about 25-30% of its capital budget could be diverted to technology and systems upgrades for PCI compliance.
“We had a bunch of different POS systems out there, but we’re now on the verge of completing a total upgrade,” Triantafellou said, adding that Handee Mart is also installing wireless-area networking in its franchisees’ stores and could potentially add Wi-FI as an amenity for customers.
“Without seating, we’re not sure if it’s practical,” Triantafellou said. “But with iPhones and other technology, things change. It’s something we’re looking at.”
Leaping into Foodservice
More recently, 7-Eleven is starting to make headway in the foodservice category. Triantafellou said the national brand rolled out a small foodservice concept that uses a TurboChef oven to cook wings, pizza and other grab-and-go items positioned in a hot case. The program’s equipment runs about $30,000 to $40,000 per store.
“They can do it in about 25 square feet, and they’ve reported good sales,” he said. “In fact, the initial reports had outstanding numbers. My team recently came back from looking at that hot-food program that 7-Eleven rolled out in Virginia–we’ll introduce two of those in our budget this year.”
Passing along these new programs and innovative solutions to franchisees hasn’t just paid off in sales and profit for Handee Marts—it also earned the company a nod for integrity and ethics.
The Gibsonia convenience retailer is among four finalists in the small-company category vying for the Eighth Annual Pittsburgh Business Ethics Award, presented by the Society of Financial Service Professionals’ Pittsburgh Chapter.
“It’s mainly presented from a business ethics standpoint, but community involvement is part of it, too,” Triantafellou said of the award. “We’re glad to take part in it. It’s a nice honor for the Turner family.”
The awards ceremony, which will include U.S. Treasury Secretary Paul O’Neill as guest speaker, will be held in Pittsburgh in February.
On a MissionEmployees at Handee Marts Inc. are required to learn the company’s mission statement and then execute it at the store level. The statement says: "The mission of Handee Marts, Inc. is to be the convenience store of choice for our customers by exceeding their expectations for our customer service and quality products, priced fairly, in a safe and clean environment. The vision of Handee Marts, Inc., a licensee of 7-Eleven, Inc., is to be the convenience store of choice for our customers, exceeding their expectations for great customer service and quality products when they want them, at a fair price, in a friendly, clean and safe environment. We recognize the value of people—our customers, employees, franchisees and business partners—and the importance of supporting our local communities." |
