Transcript Convenience Stores Aim to Remake Image

Convenience Stores
Aim to Remake Image
Written by Jim Hirsch
CNN News
Jessica Nopper
Gas Stations as Gourmet
Destinations?

want to shed the image of junk food pit stops
and discourage the gas-up-and-go mentality
Change into:
 upscale stores and restaurants that entice
customers to linger and eat
Upgraded Food Options
Freshly Baked Bread and Pastries
 Fresh Fish
 Fancy Deli Options (sandwiches, soups)
 High-end Meals
 Sushi
 Gelato
 Brick-oven Pizza
 Espresso Bars

Changing due to…………
New Competition
for the Nation’s 138,000 convenience stores

Previously relied on gasoline and cigarette
sales (3/4 sales)
– Now those profit margins are shrinking
 Alternative transportation avoiding rising gas prices
 Fewer smokers compared to a few decades ago

New Competitors
– Drug stores offering pharmaceuticals and food
– Grocers adding fuel pumps
ex. Costco, Safeway
New Customers
Previous Customer
Current Customer
Bubba = a blue collar man
who smokes
grab-and-go affluent people
who spend more time in their
cars and demand better
meals than slurpees and
nachos
Now: requiring bigger, brighter, and more upscale shops
than their predecessors
Marketing Theory
People are more loyal to good food over gasoline brands
– A good price on fuel might get people in the door once a week
– Great food could pull them in daily
Most retailers believe they can “make more money off a 12ounce cup of coffee than a 12-gallon fill-up”
Ex. Exxon Mobil’s On the Run
convenience stores spent $10
million on a proprietary line of
gourmet coffee called Bengal
Traders and created new
position in stores – Brew Master
They are SERIOUS about this coffee
Believing good food has the power to bring-in and boost business
Convenience Stores’ Future

Forming partnerships with existing restaurants

Expanding stores
– Avg. size 3,000 sq. ft. (25% larger)
– Building kitchens for preparing food onsite – fresh
– Additional parking spaces
– Employing chefs to cook made-to-order
– Adding dining rooms
Current Examples
Sheetz Inc. Super Shops
recently opened two
10,000 sq. ft. shops
that offer: dining rooms,
espresso bars, salads,
pizzas made-to-order
7-Eleven
team of chefs developing
healthy sandwich wraps and
other fresh foods
Conclusion

The convenience dynamic is changing
–
–
–
–
–

Focus on more upscale food options
Better branded foods to attract business
Dining experience more than quick in-and-out shopping
Build kitchens, hire chefs and make fresh, gourmet options
Keep customers longer to buy more than just gas
Market the gourmet food over the gas brand
There will be challenges to these changes, including
many years of bad coffee and hot dogs under heat
lamps, which have made customers hesitant to start
replacing convenience stores for their current fast food
restaurants but the future trends seem to be heading in
that direction
Sources
www.cnn.netscape.cnn.com
www.ampm.com
www.exxonmobil.com
www.post-gazette.com/pg/105072/470125.stm
www.tigerfuel.com