7-ELEVEN TAPS FORMER RANDALLS EXEC TO SPICE UP DELI CENTRAL

ROSEANNE HARPER

DALLAS -- Southland Corp. here is looking to bolster fresh foods programs in its 7-Eleven stores and has hired a former Randalls Food Markets executive to help.

Jim Richter, formerly vice president of produce at Randalls, based in Houston, was named to the new position of executive director of fresh foods for 7-Eleven stores. He reports to Sharon Powell, vice president of fresh foods. His major responsibility will be to find ways to enhance and expand the 7-Eleven Deli Central program, Powell said.

"Jim will be working under the Deli Central umbrella to develop new products and new ways to offer them to customers. We'll be looking at more breakfast sandwiches and how to best deliver hot foods to customers in the store," Powell said.

There are plans to roll out the Deli Central program to another 500 to 1,000 7-Eleven units by the end of this year, Powell said.

The Deli Central system, put in place two years ago, is built around fresh-everyday sandwiches, salads, pastries -- and even chilled entrees, on a test basis -- currently delivered to about 2,800 of 7-Eleven's more than 5,500 stores each day. (see Die is Cast at 7-Eleven for Fresh Food Rollout, SN March 24, 1997.)

In the last two years, Southland has built a distribution system to supply its convenience stores with fresh products that are made or assembled at eight third-party commissaries strategically situated across the country. (See 7-Eleven Distribution System Powers a Fresh Course, SN Sept. 28, 1998.)

In addition to new value-added produce items and hot sandwiches, entrees are on the menu for the future at 7-Eleven, Powell said.

"Jim's expertise will help us add to what we have in our assortment today. We've tried some entrees and we'll possibly expand that program." She said Richter's particular expertise lies in value-added produce "and certainly that's one of the things he'll bring to our organization."

Some of the work yet to be done is to find additional sources for products that 7-Eleven customers want, Powell said.

"Our first interest is in how we can deliver the best-quality product to the customer. The second is finding how to do it in the most cost-efficient way. The product might be prepared at the commissary; it might be produced by a produce supplier," Powell said, adding that Richter's experience in the grocery business should serve Southland well.

"We can take advantage of his different perspective as well as take a look at a different consumer. Typically the convenience store customer and the grocery customer are different. So it will allow us to be more objective because we've all been involved here internally with this for a long time," she said.

In addition to two and a half years' experience at Randalls, Richter has held produce management positions with H.E. Butt Grocery Co., San Antonio, and Marsh Supermarkets, Indianapolis, and is on the board of the Produce Marketing Association, Newark, Del.

"Jim's first assignment is to get acquainted with our organization; to see what we're doing and why. Then, as the summer starts, he'll work closely with four category managers to develop products and programs to be rolled out in the winter and summer of next year. They'll cover a broad range, including sandwiches, entrees, produce, breakfast," Powell said.

When SN spoke to Powell earlier this month, Richter was at work in a Dallas 7-Eleven store learning store-level operation systems.

"We're still in the very basic stages of offering our customers the food products that we want to offer them and that they're looking for," Powell said. "We've got a long way to go, but our fresh foods programs are constantly evolving.

"We do have an outstanding business system that allows us to deliver high-quality products. There's nobody else in the convenience store business that I'm aware of that can deliver products on a daily basis through a cold channel like we have already established," she said.

The company, which has tested chilled entrees in Dallas stores and more recently in Long Island stores in New York, will continue that effort, Powell said. She said the results have been different at different locations.

"We're continuing to try to define what customers are looking for from 7-Eleven as it relates to entrees. Do they want lunchtime sizes? Single portions? So far we haven't cracked the code at all on evening home meal replacement."

"Our forte seems to be more toward lunchtime and snacking; the kinds of items consumers on the go during the day are looking for," she said.

But she also stressed that Southland would be looking hard at developing the evening fresh meals business.

"We will test some more entrees in the fall when consumers are more receptive to hot foods. We want to find out, too, how to best deliver hot food to the customer. We want to go beyond heating by microwave [in the store]," she said.

Powell said Southland does ongoing market research, runs focus groups and does intercept interviews "to try to get as much consumer information as we can, and then we act on it."

The company has found that its current customers are primarily looking for quick, hand-held foods.

"They're looking for snack-occasion foods. They don't think of our hot dogs, for instance, as lunch or dinner. Instead, they're looking for something to satisfy an immediate hunger," Powell said.

That's different from in the past; customers used to want more filling food, she said.

"I think customers' perception of what lunch is is different today. They're in one store for breakfast, another for a hot dog for lunch, a pastry in the afternoon. There are more frequent eating occasions, but smaller portions," she said.

But that doesn't mean Southland is not going to go after the lunch and dinner crowd.

"We're trying to attract fast-food customers, grocery store customers -- anyone who is out in the marketplace looking for food," Powell said.

In future 7-Eleven stores, fresh food will be merchandised in a more clustered way to suggest a meal, Powell said.

"There will be a more integrated flow of fresh products. Sandwiches may not be against the wall but in a case right on the floor. We may have self-serve condiments that you can add to the sandwich, and the beverages may be wrapped around them," she said.

"Sandwiches and pastries and salads would be surrounded by coffee, slurpies, all that we have to offer."

The mix of fresh fare differs from store to store, depending on its location, Powell said. Some 7-Elevens in areas where there are no nearby grocery stores may even carry onions and potatoes and tomatoes, she said.

The assortment at 7-Eleven stores under the Deli Central program could include value-added produce and packaged green salads as well as snack items like apples and oranges. Sandwiches are the mainstay, however, and hot dogs and hot-dog-shape tacos head the best-seller list.