C-STORES GAIN EDGE WITH FOOD TO GO

LUCIA MOSES

WHITE SULPHUR SPRINGS, W.Va. - Recognizing that a tank of gas is a tank of gas, convenience store operators are focusing on food and drinks to set themselves apart from other retail channels.

"The public has figured out there's not a heck of a lot of difference" in gasoline, Hank Armour, president and chief executive of the National Association of Convenience Stores, said during a panel session at the Grocery Manufacturers Association's annual Executive Conference here. Meantime, he said, "There's a very big demand for convenience."

C-store operators Wawa and RaceTrac Petroleum, also represented on the panel, described their efforts to differentiate with food, among other offerings.

Wawa, the 560-store East Coast chain, emphasizes its store brand, especially in beverages, where it goes so far as to carry essentially its own-brand bottled water and no others, said Rob Price, senior vice president and chief marketing officer for the retailer.

That store-brand focus has helped make Wawa's coffee so popular, cups of coffee outsell packs of cigarettes, he said. "And we sell a lot of packs of cigarettes."

Wawa doesn't carry lottery tickets, money orders and magazines because they don't fit its strategy of selling only fast, easy and high-frequency items.

That decision enables it to focus on food, Price said. To that end, it recently introduced its own nuts, trail mix and novelty candy lines. Grab-and-go packages of cut fruit and veggies, hummus and pita, yogurt, bakery breads and sandwiches round out the food offerings.

Food also is a focus of Southern retailer RaceTrac, which operates 525 stores in the Southeast under the RaceTrac and RaceWay banners. Stores feature a wide variety of coffee, cappuccino, milk shakes, frozen drinks and soda, along with sandwiches, salads, fruit and other convenience food items.

Both retailers attributed other aspects of their businesses to success.

Price said Wawa's stores are all company owned; employees are paid "far above industry averages"; and a "culture of criticism" is encouraged.

"We meet with store managers and tell them what we're doing to respond to their criticism," he said.

RaceTrac, meanwhile, owns and prices its gasoline, a structure that encourages its operators to focus on making in-store sales as competitive as possible, Carl Bolch Jr., the chain's chairman and chief executive, told the audience. The company builds all its stores, which helps the retailer ensure it has the best location, he said.

Still, c-stores continue to be haunted by channel blurring. Price noted that consumers seek to satisfy increasingly specific needs with different outlets, like Starbucks for premium coffee and Dunkin' Donuts for drive-through service, and it's difficult to tell where the next rival will come from.

"The principal trend I'm seeing is that customers are just unwilling to compromise," he said. "They want quality, convenience and price."