Kroger’s New Restaurant Concept Shows It Won’t Back Down

By David Mostovoy

kroger kitchen 1883

Ever since the Amazon-Whole Foods deal was announced, Kroger has been under a media and market microscope. How would the U.S.’s largest supermarket chain (by revenue) react to such news? And how would the market react?

Unfortunately for Kroger, its stock has lost more than 38% of its value year-to-date. But Kroger is making it clear that when it comes to innovation, it won’t be backed into a corner—even during a time of fiscal hardships. Amid financial headlines, Kroger is experimenting with a new restaurant concept called Kitchen 1883, which offers a “fresh take on new American comfort food.” The first restaurant of its kind will feature a made-from-scratch menu, hand-crafted cocktails, and will be located at the retailer’s Marketplace store in Union, KY.

In her critical analysis of Kroger’s decision, Columnist Sarah Halzack writes, “If there were ever a moment for Kroger to rise to the occasion and show investors it has a serious, actionable plan to face down new threats, it is now. And so the company just put out a press release saying it is ... opening a restaurant?”

This is where industry data can point to some interesting conclusions. Halzack argues that restaurant spending is down and cites year-over-year same-store sales. However, Kroger CEO Rodney McMullen seems to be focusing on a different data set—the one that showed that spending on meals consumed outside the home surpassed spending on meals eaten at home last year.

Millennials spend 44% of their food dollars, or $2,921 annual, on eating out—more than ever before, as the Food Institute reported last year. McMullen has said that he views anything involving food sales as competition to Kroger, and when it comes to restaurants, he wants a piece of the pie.

“If people are eating a meal, we want to get our fair share of that meal,” he told The Wall Street Journal. “Anybody who is getting a meaningful part of that, we’d worry about.”

This isn’t just one CEO’s rogue plan. Jim Hertel, senior vice president at Inmar’s Willard Bishop Analytics, also thinks that it makes sense for a supermarket to get into the restaurant business. “When you start thinking about the ways people consume food these days, this is all part of the same pie,” Hertel told Cincinnati Business Courier. “Traditional supermarkets have been share donors for years. Kroger has been fairly experimentative. I wouldn’t be surprised to see more experiments.”

McMullen has made it clear that Kroger has not been scrambling in the aftermath of the Amazon-Whole Foods deal. “Several years ago, we decided that the customer wants a physical experience and an online experience,” McMullen said. “Obviously, it surprised the market a lot more than it did me.”

And several years later, it would appear Kroger made the right call. The shift to e-commerce grocery shopping is quickly taking shape, but it remains to be seen how drastically consumer habits will change. Still, 99% of adults buy groceries in-person at brick-and-mortar locations, according to the International Council of Shopping Centers.

Here’s what shoppers like about shopping in-store:

  • 71% of respondents noted the ability to seek immediate access to products
  • 70% cited the ability to select fresh meat, dairy and produce
  • 69% liked the ability to see the product options and hand-select what they want

Considering that 81% of Millennials go to the store to pick up their groceries, and 23% shop three or more times a week for groceries, physical grocery shopping is not just a generational preference.

Here’s the takeaway: as long as shoppers are out at Kroger’s store, there’s a better chance they’ll try Kroger’s new Kitchen 1883 concept. The name, by the way, is a nod to Kroger’s founding year. The company has survived the nearly 135 years of world events and, perhaps more impressively, the tech revolution that has spurred the demise of countless brick-and-mortar stores. They’ll likely find their footing during Amazon’s disruption of grocery retail too.

The next potentially game-changing technology in grocery retail is virtual reality. Although VR will likely take many years to take hold in the industry, retailers like Kroger will have to begin exploring new technologies sooner rather than later to keep up with the fast-changing technological trends.

But they shouldn’t just think of the consumer-facing technology. Technology can also help retail operators gain a better understanding of what’s going on at their stores, and create a consistent experience across all of their locations. Opening/closing checklists, food safety audits, monthly inspections, and more.

Check out the Sample Food Safety and HACCP Checklist below:

3 Important Criteria to Cover in a Restaurant Audit

By Brian Harris

iStock-610256704.jpg

The most challenging part of auditing your restaurant chain for operational consistency isn’t the collection of data—it’s the analysis and follow-up. Operators used to spend weeks deciphering data and navigating options. New mobile technology turns weeks into seconds.

Earlier this year, I was in a restaurant where a window shattered. It was an unexpected result of a heat lamp fighting the cool night air. I watched as the closing crew debated who they should call. Perhaps this could wait until tomorrow morning. No one was certain which vendor should handle follow-up.

But that is an ad hoc, irregular incident. Imagine the daily checklists, reminding exhausted employees to mop floors and clear tables. Operators always need to stay one step ahead of a one-star Yelp review. Whether it’s exterior maintenance, the kitchen, or a customer service problem, restaurant operators know that problems can’t wait and a timely response has tangible effects on a brand’s reputation.

Generally, restaurants audits must focus on three key criteria:

  1. Cleanliness
  2. Customer Service
  3. Food Safety

CLEANLINESS

A location's cleanliness is perhaps the biggest determinant of whether you make or lose a new customer. You need to ensure that garbage in the parking lot is picked up, your signage is clear, and the bathrooms are clean.

And it’s not just about the appearance; it’s also about safety. Use mobile safety checklists that require photos of clean parking lots, functioning lights, sturdy railings, and clear walkways.

Moving inside, the dining experience requires even more attention to detail. Is the garbage being taken out regularly? Are the floors clean? Is the food preperation counter clean? Is the floor free of trash or food debris?

CUSTOMER SERVICE

You can't always be in your restaurants to check that your team is providing high-quality service. Solutions like Zenput serve as your eyes and ears in the field. Create mobile forms to clearly outline your service standards and track execution. It isn't about spying on employees; rather, it’s crucial to the overall brand image. You can also use Zenput to identify an exceptional staff member and reward their efforts.

FOOD SAFETY

Begin with restaurant equipment safety: appliances, make-lines, tables, and floors all need frequent inspection to ensure safe operating conditions. Zenput lets you score features on a scale of 1 to 10. Get an automatic notification if cleanliness falls under the accepted threshold.

Know that food products are checked regularly and train your team on safety precautions, including refrigeration and cooking temperatures.

Learn more about Zenput’s mobile forms and automated workflows by scheduling a demo.

Three Brands Compete for Millennials at an Intersection

By Sam Negraval

millennials eating

One intersection, three competing chains… it’s an increasingly common site to see, yet it always feels like a Wild West showdown. Three brooding characters meet and one declares, “This town isn’t big enough for all of us.”

Last month, QuickChek and McDonald’s both opened new concept stores near my hometown Monroe, NJ. They chose a heavily trafficked intersection already occupied by Wawa, which opened in 2014. All three brands are evolving as they work to increase their appeal to Millennials. According to recent studies from Convenience Store News, Millennials make up approximately a third of all convenience store traffic. Another report indicates that Millennials have more than $200 billion in annual buying power.

Wawa is often described as a “Millennial magnet” by CSNews; they’re known for their grab-and-go salads and health food options which appeal to younger buyers. Millennials are the largest consumers of fruits and vegetables.

At a time when people in the food industry are complaining about Millennials, QuickChek CEO Dean Durling openly admits he aspires to be one. “Millennials love QuickChek and we want to continue to market toward Millennials…So, I think if you build a store that satisfies Millennials today, it's aspirational for all of us,” Durling stated at the grand opening. “The store markets and merchandises to everyone. That is who we are and where we are heading."

So how do the new QuickChek and McDonald's concept stores stack up? Let’s start with QuickChek.

20170902_132817 (1).jpg

Located at 102 Applegarth Rd., the Monroe QuickChek is the brand’s 150th location. At 5,500 square feet, it’s a massive store that offers indoor seating counters, phone and laptop charging stations, and free Wi-Fi. The menu is full of healthy options with signage touting “clean ingredients.”

In many ways, QuickChek’s prototype has borrowed some ideas from the Wawa next door. In 2014, Wawa introduced a “kitchen-forward” design at new store prototypes, including the one built in Monroe, which I have visited in the past. QuickChek applies this concept, but I would argue that this prototype has more of a grocery store vibe than a convenience store vibe because of five unique offerings/design elements:

  1. Self checkout at the front counter
  2. Standalone station with freshly prepared soups
  3. Indoor and outdoor seating with Wi-Fi
  4. Large selection of grab-and-go and prepared foods
  5. Wide aisles for clear sightlines
McDonald's touchscreen

With a pristine forecourt and ample gas pumps, this store will be a formidable opponent for Wawa. But what about the McDonald’s? I was curious to see what the more traditional establishment had to offer...

McDonald’s, like its c-store competitors, now offers a touch screen ordering kiosk. Their salads are surprisingly fresh, and they’re about to launch a mobile ordering app. McDonald’s understands how to appeal to Millennials.

The future of food and convenience retail is hands-on and highly interactive. It’s exciting to see how brands adopt new technologies to improve service and increase food options.


 

 

 

 

 

 

 

About Samantha Negraval

An unabashed Millennial consumer, Sam has researched and reported on the convenience retail and foodservice industries since 2012. She is a former editor of Convenience Store News magazine and has contributed to the Today in Food newsletter and annual Food Industry Review, both published by The Food Institute. She’s also the senior content strategist for Eatisserie, a startup that connects specialty food vendors to passionate foodies.

What Does Blockchain Have to do with Food Safety?

By Vladik Rikhter

Blockhain for food safety

 

IBM continues to scale up its blockchain efforts, teaming up with some of the biggest names in the food industry. Participants include Walmart, Kroger, Nestlé, Unilever, Tyson Foods, Dole, Golden State Foods, and McCormick. Many are directly competitive, but joining forces for the public cloud computing project.

According to IBM, a pilot study with Walmart that began in Oct. 2016 revealed encouraging results. Their latest announcements indicate that the technology is working and can be scaled.

“Through blockchain, companies can optimize their administrative and business processes,” explains Eileen Lowry, a Program Director at IBM Blockchain Labs & Garage. “Major sources of inefficiency in the supply chain are manual, paper-based processes that waste time, cause errors, increase fraud risks and make inventory management difficult.” Blockchain reduces paperwork, thus reducing invoice disputes, lowering procurement costs, and increasing the accuracy of records. If you are new to the concept of blockchain, Lowry provides more insight in this blog post.

Imagine the capability of tracking a piece of fruit back to the tree it came from instantaneously. That’s the power of blockchain and its built-in compliance structure. As Lowery explains, blockchain helps solve the “social problem” of whether people are willing to share information. A ledger is shared so that everyone can access the same, up-to-date information. “New records can only be added when known participants have consensus on the validity of the transaction,” Lowery explains. “Once added those records are immutable, so nobody has to worry about unauthorized changes being made. These characteristics of blockchain help to increase trust.”

Trust, accountability, data visibility—these are all words you’d hope to be associated with food safety. But what if you could apply these same concepts to daily retail execution? For a moment, let’s focus on this idea of what Lowery described as the “social problem” of sharing information. Based on our experience serving retailers and restaurants, we’ve identified two common pitfalls within large organizations:  

  1.  Organizations rely on 20th century technology to solve 21st century challenges. The world no longer moves at the pace of snail mail and Excel spreadsheets to glean information. They need real time notifications. How many times have you asked someone at the end of a phone call, “Can you text that over or send a pic?” Operators need a fast way to see inside all their stores.
  1. Organizations lack accountability. Your team needs a way to show you when progress is made. They want to show compliance with new initiatives via photo and video. No one wants to spend time digging that information out of emails.

In addition to establishing a chain of command for accountability, there should also be a chain of command for tasks. To maximize returns, establish a chain that ensures that key preliminary tasks are completed prior to the actual rolling out of a promotion. Make sure store conditions are optimized, and ensure product placement and accuracy.

Zenput provides operators with a way to assign and track tasks in order to improve their consistency. Schedule a demo to learn more.

Is Your Business Hurricane Ready? 23 Things Stores & Restaurants Must Do to Prepare

By David Mostovoy

Hurricane damage

The worst hurricane season of the decade is in full force. This year's hurricanes have left scores dead, millions homeless, and billions of dollars in damage in their wake.

The lessons learned from each storm were stark and troubling - very little is safe from the wrath of battering winds and rain. With hurricanes season upon us, businesses need to prepare for, and attempt to minimize, safety hazards from these monster storms.

Operators always have the incredibly difficult job of tracking task execution of multiple locations. When a storm approaches, operators need to swiftly communicate new directives and ensure execution. Here’s how restaurant/retail operators on Zenput prepare their locations to protect employees, reduce property damage, and reopen efficiently.

Before a Storm, Communicate the Following Objectives:

  • Deposit excess cash
  • Create a process to decide whether to close a location during the storm
  • Locate the nearest Emergency Room and post its address in a visible place
  • Remove important documents from store or place them in a watertight plastic bag
  • Unplug all electronic devices before closing the location
  • Obtain a weather radio and make sure batteries are working - ensure employees are up to date on weather alerts
  • Back up computer systems
  • Check outdoors for loose objects that may be blown away with high winds; secure or move them inside
  • If possible, sandbag entrance/exit doors
  • Shut off main gas line before closing the location
  • Board windows and doors

During a Hurricane, Focus on the Following:

  • If location remains open, communicate to employees that they must remain indoors and away from windows
  • Stay informed of weather developments
  • If weather deteriorates, communicate to management that closure is required
  • Ensure main gas line is shut off
  • Be on the lookout for downed power lines
  • Communicate to employees how to discourage customers from approaching danger areas

After a Storm, This is How to Reopen Efficiently:

  • Survey the location for damage. If you, or an employee, encounter downed power lines, call 911 immediately
  • Send detailed damage reports with photos so management can dispatch the appropriate resources for a swift re-open, and have documentation of the damage to decrease the time to file insurance claims
  • Communicate inventory levels; if low, request a restock
  • Before reopening location, check for signs of contaminated flood water damage and downed power lines
  • Ensure food supplies are uncontaminated and in stock
  • Get a third party to confirm structures are stable and secure

Follow these checklists to minimze safety risks and losses, and recover quickly from the storm.

If you want to improve communication before, during, and after a hurricane, Zenput is here to help. Reach us at hello@zenput.com or (415) 968-2948.

Most important of all: stay safe. You’re in our thoughts and prayers.

Topics: Restaurants, C-store, hurricane, emergency

Why Gas Stations are the New Quick-Service Restaurants

By Lydia Fayal

gas station food

When it’s time to refuel, where do you go? A decade a go, you likely chose based on gas prices. Now when that light pops up, it triggers an almost Pavlovian response: perhaps you crave a taco at Sunoco, or breakfast bowl from QuickTrip… Gas stations are the new quick-service restaurants. According to a recent NACS study, 42% of drivers go into the store when fueling up, a 7-point jump from 2015. 16% of drivers surveyed said food was the primary determinant in selecting a gas station.

Gas station food is not a millennial-driven quagmire. It’s about profitability in a very competitive, regulated industry. Fuel margins are on the downturn - gas stations make pennies on the gallon. Cigarette sales aren’t what they used to be; taxes keep going up as popularity dwindles.

To stay competitive, oil companies need to team up with convenience store giants. Shell partners with Alimentation Couche-Tard’s Circle K; Exxon Mobil partners with Circle K and 7-Eleven Inc.

Some gas providers forgo partnerships altogether and instead want to build quick-service chains. Marathon Petroleum Corp.’s CEO recently outlined a plan to spend $380 million on Speedway private-label products. Their investor, Elliott Management Corp., is pushing Marathon to spin off its convenience store efforts in hopes of maximizing the value of both. We will continue to track Marathon’s progress into the food service space.

Quick Stats:

80% - Gasoline purchased at U.S. convenience stores including Zenput clients MAPCO and Sunoco. This is up 20% since 1997.

0.4% - The percent of U.S. gasoline stations owned by the five largest oil companies;  (a decrease from 1.9% in 2008)

45% - Millennials who stated that food was equally as important as gas when determining where to refuel.

20,000 - Number of convenience stores not offering gas that have shuttered since 2012.

28 - Fueling sites added to big-box store locations every month.

“20 years ago, we’d rarely talk about what we’d sell in stores, but it’s really taken root over the past 10 to 12 years and we had to reshape our business to make that possible,” said Billy Milam, president of RaceTrac Petroleum Inc., a regional chain that operates 450 outlets across the south.

RaceTrac celebrates its in-store offerings, and was recognized as CSNews’ 2017 Beverage Leader of the Year. RaceTrac’s Executive Director of Food Programs Steven Turner reflected: “We want to continue to use these categories to bring guests into our stores and, once they are there, get them to try our new food offer. When we do this successfully, our overall program has experienced great results.”

According to a new study released by Market Force, QuikTrip (QT) is leading the way as America's favorite hybrid gas station - convenience store. The Oklahoma-based company known for their made-to-order pizzas and sandwiches operates 700+ stores in the Midwest and South. “We wouldn’t be investing our money on in-store sales if we didn’t think that was the future,” stated spokesperson Michael Thornbrugh. QT is poised to surpass $10B in annual revenue, with 25% derived from in-store purchase.˜

QuikTrip’s focus on operational excellence is paying off, as shown in EnergyPoint Research’s recently completed 2017 Gasoline Retailers Survey. The retailer took first place in top-level categories: service quality, food and merchandise, ease of transactions, and store facilities. The retailer also received top honors in a number of regional categories as well.

Improving operations starts with gaining more visibility into operations across every location. Zenput is the prefered mobile solution of convenience store and gas station operators in the United States and beyond. Zenput enables field managers, franchise owners, and corporate operators to track performance and improve execution so every store operates as well as their best store. Zenput even integrates with thermometers to increase food safety. Schedule a demo to learn more.

Topics: C-store

Restaurant Operators vs. Yelp - How to Respond to Negative Reviews

By Brian Harris

negative reviews

“There’s no such thing as bad publicity…” except in the restaurant industry. Food safety and cleanliness concerns destroy brand value. This is not a new concept. However, operators now have the additional burden of protecting their brands against negative comments on social media and bad reviews on sites like Yelp, Google Review, and Trip Advisor.

A paper published by Harvard Business School found that restaurants see a 5-9% increase in revenue with each star rating increase. Chain restaurants are more protected than independent restaurants - patrons are less likely to reference online reviews because of brand trust. Also, according to a new study published in Psychological Science, people have a tendency to choose the location with more reviews. Social media chatter and reviews are not entirely bad - it’s better to have many assessments than none at all. However, brands need to think strategically about their approach to customer commentary.

Respond to Negative Reviews

To protect your brand, always respond to customer feedback, even extremely negative comments. Do not delete any comments from public forums; the coverup will create more controversy than the original comment itself. An exception to this is if a comment is profane or spammy - those comments are inevitable and must be deleted to discourage similar posts.

All authentic customer feedback should be responded to in a timely manner after you consider the following:

  1. How quickly can it be resolved and at what cost?
  2. How many people could the subject effect?
  3. What would happen if the problem became well-known?

Let’s consider a hypothetical. It’s pumpkin spice coffee season and the latte machine is broken at a heavily-trafficked location. Customers begin to complain on Google Reviews, Yelp, Twitter Facebook… they’re going to complain - after all, they’re tired, craved some caffeine with a pinch of holiday zest, and after waiting in line, they were refused. It’s a minor issue in the grand scheme of operations, but that location’s rating dip will impact sales - especially if this is a busy store.

Resolving the issue requires a store manager to send a product/maintenance request. Mobile products like Zenput allow them to do this in seconds, attaching images and videos of the machine to identify the problem. This request triggers follow-up requests to the individual(s) who can fix the problem. Within hours, a contractor could be at the store and the problem be resolved.

Be Proactive with Store Audits

Intercept operational problems that often lead to negative reviews. You’ve probably realized areas that regularly raise concerns: new promotions slow customer service, expired products stay on shelves, bathrooms aren’t properly cleaned. It’s time to take control of all your locations so they run as well as your best restaurant.

Zenput makes it easy to audit your stores via a mobile device. Uncover real-time, actionable insights. Understand areas for improvement, and implement new training programs.

Learn more about auditing with Zenput and view some real examples of audits used at restaurants.

Reducing Employee Theft Through Empowerment

By David Mostovoy

employee theft

“Increasing organizational accountability” is often a lauded phrase in restaurant and retail operations. The goal is to empower employees so operators don’t need to micromanage their stores - they can rest assured that every location is running efficiently. But what does organizational accountability actually look like and how is it measured?

One particularly difficult aspect of organizational accountability is loss prevention. Chris McGoey, founder of McGoey Security Consulting, specializes in appraisal of crime risk on commercial properties. In an interview with Convenience Store Decisions earlier this year, McGoey detailed how accountability is key to loss prevention.

He audited thousands of stores that he calls “high-shrink, high-cash loss,” and found all have some things in common—too much clutter and not enough attention to detail. A disorganized retail environment is indicative of disorganized management, and opens the door for dishonest employees to take advantage and blame new employees or shoplifters for unexplained inventory loss.

No retailer is immune to the problem of employee theft. The National Retail Federation’s annual security survey reported that employee theft is responsible for 30% of inventory shrink.

McGoey found that disorganized stores have more employee turnover and often need emergency employee replacements. This can lead to a cycle of poor training and the accompanying shortcomings in inventory, sales, and cash accountability.

So how do operators solve for this? The transition to a highly accountable retail environment doesn’t happen overnight; accountability isn’t maintained with good intentions alone. Retailers must have systems in place. McGoey advised: “Structure allows c-store operators to compare employee transactions and activity by shift and quickly spot the non-compliant or dishonest employee.”

McGoey emphasized the importance of establishing baseline audits for operations. Brands including Sunoco, 7-Eleven, and MAPCO trust Zenput to assign audits and track progress. Here are a few useful applications of Zenput to increase organizational accountability:

Cleanliness and Maintenance

Assessing cleanliness both inside and outside the store requires more than a “yes” or “no” answer in a checklist. Zenput allows operators to set parameters, show examples of how stores should look, and request real-time photos/videos. Operators are notified if standards fall below acceptable levels. They can see historic trends to understand how stores compare - the goal is to elevate every store so they are as clean as their best store.

Inventory Control

From the moment inventory enters the store until it is sold or transferred, how is it accounted for? How do you know where it is in the store? Customizable Zenput audits maintain the integrity of store inventory.

Employee Training

Operators can quickly push out new training instructions and track execution. Common training programs focus on cash accountability and food safety--areas that can make or break a brand.

Learn more about how to increase organizational accountability with Zenput by scheduling a demo.

Shoplifting, Return Fraud, & Employee Theft at All Time High

By Joe Skupinsky

employee theft

Operators are increasingly focused on loss prevention, and for good reason - retail shrinkage is increasing. Products are disappearing from shelves faster than you can one-click order that same product on Amazon - the other threat to brick and mortar retailers.

The annual National Retail Security Survey from the University of Florida analyzed retail shrinkage in the United States. Four numbers stood out in the results:

  • $48.9 billion: total losses resulting from retail shrinkage; up $3 billion since 2015
  • $798: average loss attributed to shoplifting incident; it was only $377 in 2015, and shoplifting is the number 1 cause of retail shrinkage
  • $1,766: average loss attributed to return fraud  
  • $1,922: average loss attributed to employee theft

Half of retailers surveyed reported increases in inventory shrink. Shrink is divided into shoplifting and organized retail crime (36.5%), employee theft/internal (30%), administrative paperwork (21.3%), unknown loss (6.8%) and vendor fraud or error (5.4%).

If there’s a silver lining in any of these survey results, it’s that the average cost of retail robberies in 2016 dropped compared to 2015. However, it is still more than double the average cost in 2014.

“Retailers are proactive in combating criminal activity in their stores, but acknowledge that they still have a lot of work left to do,” said Bob Moraca, NRF Vice President of Loss Prevention. “The job is made much more difficult when loss prevention experts can’t get the money they need to beef up their staffs and resources. Retail executives need to realize that money spent on preventing losses is money that improves the bottom line.”

To prevent loss, retail executives and operators need a better vantage point into their stores. They need to understand weaknesses that make them vulnerable to shoplifting and return fraud; then, operators can intervene and train employees. Operators also need to know how their store and field level employees are performing if they want to prevent employee theft.

This is where Zenput comes in - it’s a practical, cost-effective solution to improve daily retail operations. An annual Zenput subscription is less than the cost of one shoplifting incident. Schedule a demo to learn how Zenput will improve your bottom line.

Topics: loss prevention

Retailer Rankings Indicate Major Growth for Convenience Stores

By Brian Harris

iStock-155034126.jpg

Marketplace differentiation is an increasingly hot topic in retail as it relates to innovative merchandising and value proposition. What’s not? Sterile big-box retail.

This was a key revelation from STORES magazine’s Hot 100 Retailers, which ranks the fastest-growing retailers based on sales. Four of the top five companies listed are e-commerce businesses, with Walmart, Target, Costco and many department stores falling short of the list.

“This year’s Hot 100 confirms once again that retail growth is coming from a number of places, including less traditional channels in the industry,” said Andrew Stockwell of Kantar Retail, a research firm that compiles the annual list for STORES. “While a tremendous amount of volume is still generated from big boxes, retail channels such as online, discount, club, drug and convenience are powering accelerated growth.”

This list is bookended by companies in the grocery space, particularly companies focused on better-for-you foods. This is clearly evident as Mexican grocer Grupo Comercial Chedraui and SoCal gourmet supermarket Gelson’s, are ranked 8th and 9th, respectively - both saw an increase in sales of more than 25% since 2015. Market differentiation and a demand for specialty food is rewarded with major sales growth. It will be interesting to watch how the meal kit rivalry between Blue Apron and Amazon.com plays out, especially as Amazon moves forward in its acquisition of Whole Foods.

Mergers and acquisitions created a bit of a shakeup in the list. CST moved up from number 39 in last year’s ranking to number 5 this year as a result of its August 2016 merger with Circle K, a wholly owned subsidiary of Alimentation Couche-Tard Inc. The merger was completed in June 2017.

Meanwhile GPM Investments, a c-store operator that ranked 3rd in 2016 after embarking on an expansion course, failed to make the Hot 100 list this year.

For c-store retailers, the Hot 100 provides two key takeaways:

  1. M&A activity is “rewarded” and evident in sales growth.
  2. Brick-and-mortar retail is not dead, but ecommerce is playing a critical role in driving growth.

This raises an important question: How can c-store retailers stay competitive with ecommerce businesses?

Bricks & Clicks

According to the annual Convenience Store News Realities of the Aisle Consumer Study, nearly a third of consumers who purchased gas at a convenience store in 2017 went inside to make additional purchases. The rate is double what it was in 2011, though it seems to have plateaued - staying around 33% for the past two years. C-store retailers can achieve growth by focusing on increasing their number of frequent or heavy shoppers.

“More than half of consumers who stopped at a c-store on a daily basis (55.1%) this year went inside the store to make a purchase every, or almost every, time they stopped for gas,” wrote CSNews Editorial Director Don Longo. “Even weekly shoppers went into the store more often than average (35.1%).” Additionally, 40% of gas shoppers entered the store because of a promotional element; 17% were drawn in by a frequent buyer or loyalty program.

Let’s face it: who is better than e-commerce retailers at “pinging” customers to make them repeat shoppers? C-store retailers need to focus on improving promotional visibility and building loyalty. They have an advantage with prepared foods, but only if the brand consistently delivers.

Once convenience store operators can maintain exceptional quality, they need to “tout” their differentiation by reminding customers at every turn, through social media, loyalty rewards apps, and on-site promotions like forecourt and outdoor signage.

Location by Location

Increasing your number of frequent shoppers starts with increasing your understanding of store-level operations, and mobile technology is a tool that can help.

More than 6,500 c-stores worldwide are using Zenput’s mobile solution to improve their visibility at the store level and to analyze location data for a better understanding of productivity, including food service and promotional execution.

Learn more about Zenput and read a case study about one of the largest regional c-store operators in the U.S.