THE BUSINESS OF CONVENIENCE RETAIL AUGUST 2015 | CSPNET.COM QUIKTRIP

KWIK TRIP

MYSTERY SHOP QuikTrip by a Nose It’s a photo fı nish, but QT has the edge on in the 11th annual derby P. 38

Reprinted with permission from the August issue of CSP Magazine Copyright © 2015 Winsight, LLC. All Rights Reserved. MYSTERY Shop QuikTrip with a “Q”or Kwik THE QUICK Trip with a “K”? When industry folks talk about these two premier chains, they frequently add such a descriptor. PATH TO But when you consider how much they have in common— both family-owned and SUCCESS -operated, employee-focused and with excellent reputations EMPLOYEE FOCUS within the retail business— the need to distinguish between them seems arbitrary. PROPELS QUIKTRIP Another example of the separated-at-birth relationship: QuikTrip and Kwik Trip  nished within only two-tenths of a point of each other as they clinched  rst and second place, respectively, in the 2015 CSP/Service Intelligence Mystery Shop. It’s a AND KWIK TRIP remarkable performance for two chains that in the 11-year history of the program always seem to  nish within no more than one point of each other. “Maybe the name is all that matters,” jokes Chet Cadieux, TO TOP SPOTS IN president and CEO of QuikTrip Corp. (QT). “ ‘Quick trips’ always win.” For the Tulsa, Okla., retailer, which has more than 700 locations in 11 states, it marks a return to the top after it  nished  rst in the inaugural and second CSP/Service Intelligence Mystery CSP EXCLUSIVE Shops a decade ago. For 2015, the chain led a triumvirate of retailers—including last year’s winner, —to earn overall average scores that broke the 95% barrier for the  rst time in the program’s history. And QuikTrip did one better, nailing the highest overall score ever—96.1%—in the mystery shop. The score was all the more impressive given that QuikTrip upped its workforce by 25% to 30% in the past year to accommodate its growing foodservice program. “It made me smile when I heard MYSTERY we’d won,” Cadieux says. “In our employees’ views, we didn’t do as well this year because we had so many newbies. We’ve got a whole bunch of people who don’t know any better but to do it right.” For Kwik Trip Inc. (KT), a four-time winner, coming so close to  rst was bittersweet, even though it earned its highest overall score (95.9%) since it began participating in the mystery shop. “You never want to be second,” says Don Zietlow, co-founder and CEO of the SHOP La Crosse, Wis., chain. “When  rst is available, you want to be  rst.” In exclusive interviews with CSP, the CEOs of both companies spoke about the culture and strategies behind their success and how they plan to maintain their momentum. } growing along with health-care costs and rising minimum- wage requirements across much of the country. However, that the majority of the 10 chains in the mystery shop topped 90% across about three dozen barometers speaks well of a c-store channel that QT excelled in exterior cleanliness in the mystery shop. is transitioning from guilt pricing and historic dependence s impressive as on cigarettes and high fuel QuikTrip’s record- margins. breaking 96.1% score “These close results Ais, Chet Cadieux views this show the channel is evolving kind of success as necessary to survive,” Cadieux says. for surviving in an increasingly “In a hostile environment, it’s QUIKTRIP competitive environment. The natural to see a sort of evolution challenges the c-store industry occur. People who aren’t Building a winning team faces are hardly a secret: core able to become better every BY MELISSA VONDER HAAR categories being squeezed, day are probably not going to be PHOTOGRAPHS BY BRANDI SIMONS nontraditional channels long for this industry.” going after fuel and smokes, CONTIN UED o{ perational expenditures >

ne would think that and . Don Zietlow, at 80 Meanwhile, the family’s years old, should be second and third generations O are actively engaged in the rolling countryside of western company’s vertically driven KWIK TRIP . It’s been 50 years retail model. Zietlow’s three children have all of the It pays to be nice Trip store in Eau Claire, Wis. voting shares, while the third BY SAMANTHA OLLER In the past half-century, he has generation now owns the PHOTOGRAPHS BY STEVE WOIT seen the business grow to $4.5 billion in annual sales and more owns none of it. than 450 stores in Wisconsin, That said, he remains

KwikTrip has grown customer count by about half a million this year. Crosse and still being actively { involved in the business. He was juggling two meetings the same morning CSP visited. He describes himself as “the happiest I’ve ever been.” “The involvement of the family, the growth of our } CONTIN UE>D MYSTERY Shop

Q T Also hardly shocking is the high-quality food. For operators investment in new revenue looking to establish themselves >sources. “The industry’s as QSR alternatives, excelling biggest challenge is going to be in all areas of the consumer replacing margin dollars from experience is a necessity. the dying categories,” says As such, Cadieux is proudest Cadieux. “I’ve said for 15 years: not of QT’s impressive scores When some category comes to QT CEO Chet Cadieux was all smiles when he heard of the company’s win. cooler, but for its 96.8% score at something else to sell.” the pumps and 96.6% score for Enter foodservice. For Cadieux says, a refrain he has facing new competition from exterior cleanliness. been preaching for about a classic food destinations. The fuel island may sight. Unlike or , decade. “We’re pretty good at “For the food category, QSRs seem to have little to do with QT did not have a decades- selling gasoline. That’s a pretty and fast-casual restaurants are foodservice sales. But Cadieux long foodservice history. In tall hurdle, and it’ll take us a our competition,” says Cadieux. likens it to arriving at an recent years, as the company long time to get there.” “There’s a lot of competition open house with a disheveled has rolled out foodservice in the food business and a lot lawn: “You gotta think, ‘If it commissaries and embarked on Outside-In Challenges of smart people who have been looks this bad on the outside, expanded menus, the mantra Clearing that hurdle means doing this for a long time. They imagine what it looks like on has been the same. hiring new employees, all know how to do it better than the inside.’ It’s hard enough “We need to get as good implementing new policies most companies in our industry, to be in the food business as a at food as we are at gasoline,” and, perhaps most challenging, QuikTrip included.” gasoline retailer. It’s probably

K T company and knowing that option. This model puts Kwik the third generation wants to Trip in direct competition >continue to share with our co- with a channel most c-stores workers—that gets me excited,” stay away from: the big box. says Zietlow. Yet the company relishes the chance to butt heads with the Counting What Counts hypermarkets on food. Customer count and sales per “I like to build my store in customer are important metrics front of Costco, Walmart,” for the famously numbers- says Zietlow. “We have a better obsessed Zietlow—and he likes value and better quality food, the direction in which they’re Customers choose KT because of its co-workers, CEO Don Zietlow says. so that’s the growth.” moving. Kwik Trip’s customer The next big food project count has grown more than 2014 alone and has been selling for Kwik Trip is prepared 10% per week at new and same meat program launched in three to four truckloads of meals: take-home, heat-and- stores combined. Considering 2014, featuring packaged pork Cargill-sourced packaged meat eat entrèes such as meatloaf, that Kwik Trip sites have about chops, ground beef, steaks, per week. lasagna, chicken or salmon. 6 million customers per week, brats and more, merchandised that means 500,000 more in freestanding, open-air for Kwik Trip’s commodities- “a huge undertaking,” partly guests per week. coolers. The results from the driven strategy, which pushes because of the challenge of Meanwhile, Kwik Trip is value on items such as bananas, dealing with the product’s short seeing promising growth from Trip sold 4 million bratwurst in bread, milk and eggs, and shelf life, but also delivering a

impossible if you’re not taking Pursuing Consistency care of the outside.” Maintaining a tidy exterior and Though Cadieux calls the interior and positive customer relatively new foodservice experience with more than program “an exciting 17,000 employees across challenge” for QT’s employees, 716 locations is no easy feat, it makes maintaining foodservice program or not. the outside of the stores One tool QT provides its team is meticulous consistency: All locations sell the same products, with nearly identical layouts. Walk into any QT

“People who the cooler to the right, soda aren’t able to fountains and fresh food to the left and the checkout stand become better front and center. every day fact that QT’s lots are large—the employees’ jobs. Cadieux says this model not company’s generation-three “You don’t necessarily get are probably locations average 16 to 20 upset about gum on the sidewalk consumers (who know they not going to MPDs—Cadieux says keeping like you do a pop spill inside, can walk into any location and the exterior as clean and but it is at least as important,” be long for appealing as inside the store he says. “The reality is, the CONTIN UED this industry.” is “the hardest part” of his outside’s just a lot harder.” >

out its foodservice program success with its Karuba Gold that is still rare in c-stores. It more than a dozen years ago. self-serve espresso beverage is hoping to apply the same “We were able to digest how program, which rolled out to lessons learned when it rolled we want to sell food—make it in all stores in 2014. The chain our commissary, take the labor installed espresso machines The Karuba Gold program has out of the store—and I think we’ve been really successful,” that allow customers to make Zietlow says. As proof, KT’s foodservice sales are growing foodservice sales are growing hot and cold beverages. During more than 20% year over year. faster than any other category, CSP’s visit to a La Crosse Kwik up 23% in 2014. He expects the Trip, customers kept making a (CNG) by year’s end. By 2016, same level of growth over the beeline to the machine, despite it expects to have its 400-truck next few years as KT builds 35 several powdered-cappuccino to 40 new sites annually. machines available nearby. “You’ve got to get the right Since its launch, the program Zietlow acknowledges product the consumer wants to has helped boost Kwik Trip’s that CNG and LNG are a big buy,” he says of the prepared overall hot-beverage category investment; average installation costs for a CNG fueling site items do you have and still be Another area in which Kwik run about $1.5 million. But at fresh and good? That was a Trip has blazed a trail but is the same time, Kwik Trip is challenge when we rolled out fully prepared for a longer- counting its savings. Despite food too, but it’s easier now that term return: alternative fuels. relatively lower diesel prices we have more volume.” It is on track to have 40 sites CONTIN UED And Kwik Trip is seeing selling compressed natural gas > MYSTERY Shop

satisfy our growth desires,” he descriptors. “The question is, Q T says. “You’ve got to really work can you actually get them to need), but also its employees. come work for you? We make it “Keeping it consistent grow at a decent pace. a point to not settle.” >absolutely allows us to perform “We’re good at training, but Here’s an extraordinary at a high level,” he says. we’re not necessarily the best in statistic: QT hires less than 1% For example, QT “shares” the world. We’re good at coming of its applicants. To put that in employees across its network. up with policies, but we’re not context, Harvard had a record- necessarily the best in the world low acceptance rate of 5.3% in for a day, an employee from at that either. But I think we’re 2015. This razor-thin rate speaks process that works well thanks Hiring great people is the reason people to come work for us.” admirably to QT as recruiter to the stores’ similar setups. for QT’s success, Cadieux says. That strength is the result and employer, a fact reinforced Cadieux is quick to point out of what Cadieux calls a “top in business books about that QT’s philosophy is just one QT’s ‘Secret’ Edge secret” process of screening the company’s well-known option—not a magic formula for Cadieux readily admits applicants, which he jokingly employee-centric approach, c-store success. he’s something of a broken likens to Coca-Cola’s famed which has landed QT on “A lot of companies perform record when it comes to QT’s recipe—and is not something Fortune magazine’s “100 Best exceptionally high using strategies for success. It all QT is willing to share publicly. Companies to Work For” 13 comes down to the people. “At the end of the day, years in a row. he says. “There’s a lot of “The hardest thing from everybody wants the same “QuikTrip stands out in an execution standpoint is people,” Cadieux says, that employees praise its this is just the one that we’re citing “high energy” and CONTIN UED comfortable with.” of good people we need to “overachievers” as desirable >

don’t execute, we fail.” Top Workplaces 2015 for large K T Evidence of this execution is companies—has allowed it to over the past year, the company Kwik Trip’s 98.6% CSP/Service be incredibly choosy. In 2014, it is still seeing a 20-cent-per-mile Intelligence Mystery Shop score hired only 6,000 of the 113,000 >savings for running its trucks on for exterior cleanliness, placing people who applied, or 5.3%. it well above the 94.8% average, Interestingly, one of Kwik racked up 20 million miles in KT may sell as many as 50 million Trip’s biggest challenges today 2014, this equates to an annual for clean restrooms, vs. a 93.9% pounds of bananas in 2015. is employee-related. It is not cost savings of $4 million. average. minimum-wage regulations; And in 2015, Kwik Trip hit The success of the by example. Kwik Trip focuses the company already pays well company’s business model heavily on leadership training above the industry average. hinges on its ability to keep its for its managers and conducts But Zietlow calls out the employees happy so they will yearly 360-degree evaluations business. keep customers happy. There’s a on all of them. process for hitting what Zietlow And then there are the insurance costs and those of People Matters says are the industry’s lowest its employees. Since ACA has Food and fuel are the two shrink and turnover levels. The been implemented, the annual deductible for a family on Kwik what drives the company are Trip hires for attitude, with the Kwik Trip earns each year Trip’s health insurance plan its employees. “The success of belief that associates can be back to its 15,000 employees. has ballooned from $2,000 to Kwik Trip is our people,” says trained to learn everything else. The company’s reputation nearly $8,000. Zietlow. “We can have the best “I want our people to be nice,” as a great employer—the “The normal worker’s stores, we can have the best of says Zietlow. Milwaukee Journal Sentinel CONTIN UED everything, but if our people The second step is to lead

> MYSTERY Shop

them by looking after them and Q T being fair and caring.” above-industry-average pay But while the compensation and overall friendly, supportive package certainly is a lure, >atmosphere,” Fortune said QT scores high in the business of the company in the 2015 sector for its keen eye in list. “Employees who ace a recruitment. ‘mystery-shopper’ test or “We don’t believe that we demonstrate good attendance can teach someone culture QT is striving to be as successful with foodservice as it is with gasoline. get bonuses as well.” or values,” he says. “Instead, Cadieux says he’s “not sure” we’re looking for people who reason to get out of bed in the but also in thriving in today’s already have those values. morning.” competitive landscape. day performance, so much as To us, that’s what culture is all It’s this team of go-getters “Any CEO can beat on their whether folks stick around. The about: having a whole bunch that Cadieux credits with desk and say, ‘We have to get company has an extremely low of people with the same vision, QuikTrip’s success, not only better,’ ” he says. “But you have turnover rate of 13% (compared the same values, the same in this year’s mystery shop, to have a whole lot of people to an industry average of 59%, within the organization who according to Fortune). get out of bed in the morning “If you’re a great employee, and naturally want to do things everyone else in the world “We don’t believe that we can better. wants you too, not just teach culture or values. Instead, “If you’ve got a whole bunch QuikTrip,” says Cadieux. “We of people who are like that, I’m recruit them by having a good we’re looking for people who not going to say it’s easy, but at job with good pay; we keep already have those values.” least you’re in it together.”

Customers Count the market, government, K T Kwik Trip takes a broad Gold program, which lets them competition and industry. Even paying for this,” says Zietlow. approach as it pushes to attract when Zietlow describes what “This is wrong. They’ve got to various demographics and It aims for soccer moms with he admires about QuikTrip, it >make more money just to pay boost customer counts. the value of its commodities— seems as if he is speaking about their health insurance.” “I want them all,” Zietlow Kwik Trip strives to be an earlier stage of his own The chain appreciates the says with relish. “But you reach competitive on the prices for company. link between employees’ health “They take care of their and their happiness. In 2013 it For example, Kwik Trip targets and bread—as well as its fresh people,” Zietlow says. “They opened the Kwik Trip Center millennials via social media food cases, stocked with fruit, used to have a lot of cigarettes, yogurts, salads and sandwiches. and now they are focusing from checkups and acute care Store cleanliness is a source of There are still instances more on food: warehouses, to lifestyle coaching. Employees pride for KT co-workers. when Kwik Trip cannot meet commissaries, bakeries.” who meet certain goals—losing customer demands. The Zietlow tries to visit QT weight or quitting smoking, company is unable to move stores two to three times a year, for example—earn discounts organic produce fast enough to and he greatly admires the on their health-insurance Cadieux family. And the chains premium. fresh selection. But it has share a common purpose. “It comes at a cost,” Zietlow considered gluten-free breads, “Whether it’s QuikTrip, says. “But I think it’s a savings and it phased out trans fats Wawa, RaceTrac, Sheetz or because we’ll spend less money well ahead of the recently whoever it may be—we’ve all on our workforce health care announced federal ban. got the same message,” says In many ways, Kwik Trip Zietlow. “Either we’re the best, because they’ll be healthier.” paces a few steps ahead of or we’re going to fail.”

QUIKTRIP VS. KWIK TRIP

QUIKTRIP CORP. KWIK TRIP INC. TULSA, OKLA. LA CROSSE, WIS. FOUNDED NUMBER OF STORES billion ANNUAL SALES billion FACEBOOK FANS TWITTER FOLLOWERS Be the best; focus long-term; do what’s right for Honesty and integrity; respect; excellence; CORE VALUES humility; innovation; work ethic

“Any CEO can beat on their desk and say, ‘We have “The success of Kwik Trip to get better.’ But you have is our people. We can to have a whole lot of people FROM THE CEO have the best stores, we within the organization can have the best of who get out of bed in the Chet Cadieux everything, but if our people morning and naturally want Don Zietlow don’t execute, we fail.” to do things better.”

To get as good at food as they are at fuel OPPORTUNITY Fill-in shopping occasion

QuikTrip claims to sell more than 2% of all U.S. gasoline. FUEL FACT 2015.

Full-service QT Kitchens counters NEXT BIG THING Prepared take-home meals QT targets what its founder, Kwik Trip has built out from its Chester Cadieux, refers to as “two-tank” core state of Wisconsin into similar towns— “low-growth” markets such as twice a week to get to and from GROWTH PATTERN Iowa and Minnesota. Its vertically work and home. Examples include , integrated structure and commodities St. Louis and Phoenix. It then clusters focus enables it to compete stores in these markets to build critical mass handily while building about 40 and gain local economies of scale. new locations per year.

COMMON CORE PERKS 401(k FAMILY TIES ) HIGH STANDAR Employee stock opt Second- and DS ion plan <1%: The per ird-generation centage HONORS th of ap Scho e’s plicants larships and/o One of Fortun company Q tuit r QuikTrip: uikTrip offers a ion reimbursemen anies to leadership job t “100 Best Comp Year-end bonus e 2003 6,000 out o Work For” sinc f 113,000: Employee assista The nce program e number of Health/w ked No. 1 larg appli ellness programs Kwik Trip: Ran l’s cants to whom P Journal Sentine Kwik Trip aid/unpaid sabbat in Milwaukee offered a icals employer 015; job in 2014 Workplaces” 2 “Top 100 r’s Des Moines Registe named in The rkplaces” “Iowa’s Top Wo

MYSTERY Shop

M Y S T E R Y S H OP D A T A For others, there were more sources of pride. “A clean and

important to [our] business,” > says senior communications manager Ashleigh Womack of BRING IT RaceTrac’s leading 97.6% Embrace of foodservice sends scores soaring BY SAMANTHA OLLER AND MELISSA VONDER HAAR positive halo extends to our

It’s one thing for senior nother year, another of trash cans at the pumps. last year’s winner, and QuikTrip management to understand record-high average And this year’s retailers did earned 100% in the employee this. But to succeed day by day, score for the chains just that, improving on 2014’s section. store by store, this sentiment Astudied in the CSP/Service high scores: Ask any retailer about the must resonate with store-level Intelligence Mystery Shop. importance of excellence in a employees. In 2012, the average > Exterior cleanliness: 94.8% given section and the answer “We have to be able to go overall score for mystery-shop average score, compared to will likely lead back to the out there every day and ... work participants was 85.2%. In 2013, 92.7% in 2014 obvious: foodservice. with them, and show them we’re that average jumped to 90.8%. > General interior: 92.2% vs. “When you go out to eat good at the hows and whats,” It was 91.9% in 2014. The 2015 90.9% says Ian Johnstone, general average rose to 92.5%. > Restrooms: 93.9% vs 91.5% you go into the restroom and manager of Cenex Zip Trip, The reason is hardly a (It is worth noting that many the restroom is not clean, or Spokane, Wash., which garnered mystery. As foodservice of the chains in the mystery shop the outside’s not clean, your a 94.5% overall score. “We’ve becomes a tenet of the industry, change year over year.) perception may be: How clean got to be better at the whys: the channel must up its game When it came to excelling is the kitchen? How good is the why it’s important to make sure to compete not just with other in the individual categories, food?” says Don Zietlow, CEO of these things are done correctly, c-stores, but also the wider net retailers really excelled. From Kwik Trip Inc., La Crosse, Wis., whether it’s the food bar, the of competitors for foodservice KwikTrip’s 98.6% exterior- temperature of the hot dogs, dollars. This means an overall cleanliness score to Cumberland thanks to a strong performance making sure the bathroom is improved customer experience, Farms’ 97.8% sandwich-cooler in restrooms and exterior stocked 100%. whether it’s the attractiveness average, near-perfect ratings cleanliness. “That’s important “From top to bottom, our of sandwiches, the cleanliness showed up for a number of to me. And it’s also a source of role is to have ordinary people of the restrooms or the state retailers. Both Cumberland, pride with our co-workers.” do extraordinary things.”

OVERALL BRAND PERFORMANCE BRANDS SHOPPED CSP/SERVICE BRAND NUMBER OF SHOPS In the most competitive, high-scoring mystery shop to date, QuikTrip took top honors, edging 7-Eleven/Alon 98 INTELLIGENCE out Kwik Trip by two-tenths of a point. Cenex Zip Trip 63 BRAND OVERALL SCORE Chevron 104 MYSTERY SHOP QuikTrip 96.1% Cumberland Farms 105 The mystery-shop audits were conducted from Kwik Trip 105 April 22, 2015, to May 27, 2015. These audits Kwik Trip 95.9% took place between 11:30 a.m. and 7:30 p.m., Mapco 84 any day of the week. Following each visit, Cumberland Farms 95.1% Maverik 92 mystery shoppers completed a survey in which QuickChek 91 each response received equal value. Here are RaceTrac 94.8% the chains that were shopped and how often QuikTrip 103 each chain was visited during the course of the Cenex Zip Trip 94.5% RaceTrac 105 mystery shop.

MYSTERY Shop CHET CADIEUX QuikTrip “There are positive or EXTERIOR CLEANLINESS negative merchandise INTERIOR CLEANLINESS or food cues all over Were the pump island and its pumps clean? the place, whether it’s inside or outside. It’s Kwik Trip 97.1% Chevron 99.0% faulty to suggest that QuikTrip 97.1% the outside doesn’t Cenex Zip Trip 96.8% Cumberland Farms 94.3% matter just because the QuikTrip 94.2% food isn’t out there.” RaceTrac 94.3% QuickChek 90.1% Cenex Zip Trip 92.1% Cumberland Farms 89.5% Was the pump island properly supplied? Were all the lights you saw in the store working? QuikTrip 100% DON ZIETLOW Cenex Zip Trip 100% RaceTrac 97.1% Kwik Trip RaceTrac 100% “[Customers] want to QuikTrip 99.0% Cenex Zip Trip 95.2% come to a clean, Chevron 91.3% friendly environment. QuickChek 98.9% They want to be QuickChek 87.9% 7-Eleven/Alon 98.0% appreciated. There’s no Was the parking lot and store entrance free better way than to have Was the restroom clean? of garbage and debris? a clean bathroom.” Kwik Trip 96.1% Kwik Trip 97.1% QuikTrip 94.2% Maverik 95.7% RaceTrac 92.4% Cenex Zip Trip 95.2% Cenex Zip Trip 90.5% IAN JOHNSTONE Chevron 93.3% Cenex Zip Trip Cumberland Farms 90.5% QuikTrip 93.2% “What’s the hardest part of the store to DAIRY COOLER keep clean? Absolutely FOUNTAIN DRINKS stocking the coolers and keeping them Was the dairy cooler clean? organized. When you Was the fountain drink area fully stocked Kwik Trip 99.0% talk about everything with supplies? that goes into our Chevron 98.9% Kwik Trip 100% stores, there are so Cumberland Farms 97.1% many products coming Chevron 99.0% QuikTrip 97.1% out, so much pressure Cumberland Farms 99.0% from vendors. Do we Cenex Zip Trip 96.8% have these products QuikTrip 99.0% Were the products in the dairy cooler within their represented?” RaceTrac 99.0% expiration date? QuickChek 96.7% machine operational? Kwik Trip 96.2% IAN JOHNSTONE Cumberland Farms 97.1% QuikTrip 96.1% Cenex Zip Trip Cenex Zip Trip 96.8% Cumberland Farms 93.3% “When we started remodeling our stores, QuickChek 96.7% Mapco 92.5% we were going to have Kwik Trip 92.4% Was the temperature within the range of 32º F to a consistent fountain Chevron 91.1% 41º F (0º C to 5º C)? offer. Yes, we knew Kwik Trip 100% there were limitations, but we needed to Cenex Zip Trip 98.4% start [to] develop a Cumberland Farms 95.2% program that we were Maverik 91.3% proud of and that was QuikTrip 91.3% consistent.” MYSTERY Shop ASHLEIGH WOMACK RaceTrac “RaceTrac’s coffee COFFEE equipment has timers SANDWICH COOLER and gauges that help our associates monitor Was the coffee area clean? the freshness and Did the sandwiches have expiration/ QuikTrip 99.0% amount of coffee in made-on dates? Cenex Zip Trip 98.4% each urn. This allows Kwik Trip 100% us to provide a quality Chevron 98.1% QuikTrip 100% full-service coffee Kwik Trip 98.1% offering to our guests.” RaceTrac 98.1% RaceTrac 95.2% QuickChek 97.7% Was all coffee equipment operational? Cumberland Farms 97.1% 7-Eleven/Alon 100% Were the sandwiches within their Cenex Zip Trip 100% expiration date? Maverik 100% Kwik Trip 99.0% QuickChek 100% BEN WILSON QuikTrip 99.0% Chevron 99.0% regional retail RaceTrac 99.0% operations manager, Maverik 97.3% Did the location have a working thermometer Kwik Trip QuickChek 96.5% to test the temperature of the coffee? “This is one of those RaceTrac 99.0% environments where Did the sandwiches look appealing Kwik Trip 94.3% we constantly have (fresh and attractively presented)? to check everything QuickChek 91.2% Cumberland Farms 100% because it takes one QuikTrip 100% Cumberland Farms 83.8% guest to do something QuikTrip 81.6% to make a huge impact. RaceTrac 100% The coffee bar is Kwik Trip 99.0% constant because of the QuickChek 98.9% volume we do there. The condiment bar Was the temperature in the sandwich cooler/ is constant because we bunker within the range of 32º F to 41º F (0º C to 5º C)? sell a lot of food. Cenex Zip Trip 98.4% As soon as it gets messy, Cumberland Farms 95.2% it’s a huge turnoff.” Chevron 90.5% RaceTrac 88.6% Maverik 84.8%

JAMES HILL customer experience manager, Cumberland Farms “It is important to not only offer a wide variety of foodservice items, but to also make certain that the product and the equipment that the product is being displayed in are appealing. As consumers ourselves, each of us knows that we shop with our eyes; eye appeal is buy appeal.”

MYSTERY JAMES HILL Sh o p Cumberland Farms “The face of our company is our store EMPLOYEES team members, who represent our brand to our everyday Were all on-duty employees wearing a uniform, guests. Each one of including a nametag? them takes pride in Cumberland Farms 100% their appearance and QuikTrip 100% understands that they are our brand Kwik Trip 98.1% ambassadors.” RaceTrac 97.1% QuickChek 96.7% Were all on-duty employees well groomed?* Cenex Zip Trip 100% Chevron 100% Cumberland Farms 100% Kwik Trip 100% QuikTrip 100% Mapco 100% RaceTrac 100%

* Source: 2015 CSP/Service Intelligence Mystery Shop

bake a cake a different way.” Training forms the backbone CENEX ZIP TRIP’S PROGRESS REPORT of this effort, with management constantly emphasizing the Progress, not perfection: That’s > Cash control: Are the tills communicating to store associates importance of the priorities. one of the mottos for the operations correct and secured? why the six priorities are so critical— Cenex Zip Trip’s own mystery-shop team at Cenex Zip Trip, Spokane, > Check stand and image: Is the why it is so important that the hot program ensures that the stores Wash. The 70-store chain—the counter neat and uncluttered? dogs are at the right temperature, are executing. corporate-owned stores of CHS Inc., > Food bar: Are the roller grills the bathroom is clean, the coolers The chain has eschewed the Inver Grove Heights, Minn.—is a stocked and the hot dogs at are fully stocked. “If we can’t get all mystery-shop performance contests brand-new participant in the CSP/ the proper temperature? Are of our associates to buy in and move that other retailers often use to Service Intelligence Mystery Shop. in the same direction, we’re going to motivate employees; Johnstone > Coolers: Are they faced and have issues,” he says. believes they result only in short- Cenex Zip Trip did very well, ranking full of product? Cenex Zip Trip has been testing term improvements in execution > Facing: Are shelves neatly faced two additional daily priorities— that quickly fade once the contest to its strong results in interior and each section fully stocked? bag 10 bags of ice and wipe down ends. Instead, the retailer focuses and exterior cleanliness, dairy dispensers, for example—that on hiring for attitude (and training cooler, fountain and coffee bars, “We’re not always going to be the change each week. The idea is to and employee appearance. least expensive and we’re not always improve communication between and offering plenty of positive Ian Johnstone, general manager going to be the most expensive,” corporate and stores. reinforcement and guidance from for the chain, says it’s a matter Johnstone says. “But we’re going to “Even though we have a store managers. of store associates focusing do things right, be consistent and communications book where we “Everything we do starts with consistently on six key priorities: predictable, so that when people could write this stuff down, it’s trying the store manager,” he says. “We come in, they’re going to walk out of get people to open the book and say, may have all of the greatest ideas in > Customer service: Are you ‘Here’s what we’re working on today,’ the world, but if I can’t get them greeting customers with a smile? That consistency depends on ” says Johnstone. “It’s just trying to to be executed, I’ve got nothing.”

MYSTERY Shop

CAMERON WATT is president and CEO of In-Touch Insight Systems. Reach him at CUSTOMER EXPERIENCE: [email protected] STOP THE MEDIOCRITY

because we felt it provided In appreciation, we offered When we were in the planning more robust information in each chain all of the store-level line with where the industry information. We hope these phase of this year’s study with is going. So we again asked fine operators will combine chains for permission to shop in our research with in-depth CSP, we paused to explore their stores. We would choose customer surveys and assess the stores and times, but our whether their procedures and what we should measure. mystery shoppers would have offerings meet—if not exceed— For a decade, we conducted a to ascertain whether to focus a form granting them the right their customers’ expectations. customer-service-style mystery on training or to consider a to measure freshness across the shop, testing for items such different coffee blend. At the entire foodservice offering. Embrace Technology as greetings and suggestive same time, if you are measuring The truth is, if you’re This is where I see great news selling. We measured excellent store execution and going to compete with QSRs for the convenience channel. important fundamentals such not listening to customers, you and casual dining for share Multiple data streams from as cleanliness and product may never figure out why sales of stomach, you have to be diverse sources can now be availability (out of stocks), but are not growing. better at more areas than just brought together easily to not to any level of detail. Last The simple those traditionally provide common dashboards year, we began approaching reality is, there necessary to sell and analytics. each of the participating chains are things you Was the fuel and smokes. In fact, there are ways to for permission to shop in their can measure temperature We checked to structure the storage of data stores. overtly that in the coolers make sure the staff to allow for diverse programs, We talk about the speed you cannot WITHIN was well-groomed even from different vendors, to of change in the world of measure RANGE? and that the pump merge and provide meaningful, technology. A cellphone from covertly, and islands and front automated information. 2010 or a first-generation tablet the reverse counter were clean, The cost of providing data won’t do you much good in is also true. There’s still a but we also went deeper. aggregation, storage, reporting 2015. We have seen a similar third leg that is missing to For example: and related services has acceleration in customer ensure balance and stability: dropped dramatically for the expectations. And the question a customer-experience > Was the temperature in vendors who provide it. we began asking ourselves is: component that solicits the dairy and sandwich If you are not on a path How are c-stores performing feedback from your patrons. coolers within range? that lets you see things such in the areas in which Covert and overt mystery > Did the sandwiches look as the correlation between customers are most likely to shop/audit activities are great fresh and were they the execution of suggestive judge you? at telling you whether your presented attractively? selling and transaction size locations are living up to your > Were the sandwiches by location, or gives you Overt vs. Covert internal standards, while within their expiration the ability to know which Imagine you receive feedback customer feedback lets you date? organizational standards from customers that they are know if customers agree with > Was the ceiling, including need to be changed and which unhappy with the quality of those standards. vents, clean? locations need to be retrained, your coffee at a particular What does this mean for the > Was the fountain area speak to your vendors about location. Does it mean that 2015 study? Because we did not clean, stocked and getting on this path. location is not adhering to have access to the information functional? With the latest technology, standards, or do the customers required for all three legs of > Did the location have a not only can you get what you in that area not like your the stool, we continued our working thermometer need, but you also can do it for particular formula? As part of movement toward the overt for testing the coffee far less cost than ever before. your investigation, you need program that we started in 2014 temperature? Don’t settle!

54 csp AUGUST 2015 FROM THE EDITOR

MITCH MORRISON is vice president and group editor of CSP Business Media’s The Big Meaning Convenience Group. Reach him at mmorrison@ of Small Actions cspnet.com.

hen I shared with Steve Mind you, I’m not discounting the im- the fundamentals. In my opinion, their next Loehr that Kwik Trip fi n- portance of ego. And when I say ego, I don’t challenge is to be more daring, to apply those ished in a virtual tie with mean the euphemistic application repre- fundamentals to a more alluring and distin- QuikTrip in our 11th an- sented by the likes of Donald Trump and guishing off er that further distances Cenex nual CSP/Service Intel- other high-decibel types. I mean it from the Zip Trip from its competition. ligence Mystery Shop, psychoanalytic sense: that of one’s self, the This is precisely what QuikTrip, Kwik Trip his response hardly sur- opened eyes of a curious child eager to ab- and Cumberland Farms have truly mastered: prised me: sorb, distill and experiment. The belief that the art of crafting what Jim Collins artistical- “While it is a virtual God has granted me life to accomplish some- ly calls the Big Hairy Audacious Goal (BHAG) tie, we see it as losing by 0.2!” thing positive, maybe even something great. and pursuing that vision with extraordinary WEntrepreneurial types don’t like anything Our mystery shop is a maze of metrics, a discipline and fundamentals. but being No 1. That may sound like hubris ledger of observable and measurable bench- For more about the results of this year’s or excessive testosterone, and in many cases marks. It impartially assesses whether we CSP/Service Intelligence Mystery Shop, turn it is. But it’s also a dichotomous form of hu- are executing our programs eff ectively. And to p. 47. mility, a conviction of wanting to fulfi ll one’s it does not tell you whether your Forgive me for my digression maximum potential. store is an architectural Rem- and indulging in my personal Anyone who knows Loehr knows him as brandt or your foodservice an Too many life. I’m writing this column in of us speak a family-focused person of deep faith and epicurean delight. Nor should it. early July, just days after we as a about MAGIC incredible integrity. His traits are emblem- Too many of us speak about BULLETS. nation celebrated our country’s atic of Kwik Trip and the culture created by magic bullets, about fool’s gold. birthday. Two years ago, I spent founder Don Zietlow. We look for the big serve as a way July 4 on a pediatric cancer ward It is no different at Tulsa, Okla.-based of winning points, when often in tennis it is as our younger son, Daniel, was undergoing retailer extraordinaire QuikTrip. I can count the player with the most consistent strokes treatment for non-Hodgkins lymphoma. on hands and feet the number of times CEO who wins the match. I remember looking outside of the room Chet Cadieux has said creating good-paying In our current mystery shop, my favorite and seeing medical staff and a row of strang- jobs is what fuels the company’s craving for performance was that of Cenex Zip Trip. I’ve ers coalescing about 20 yards down the hall- growth. (See p. 38 for a closer look at Zietlow known Ian Johnstone for many years, and way. A young man in his early 20s—a former and Cadieux and their excellent teams.) he’s one of the most pleasant and honest starting high school quarterback just a few Neither Zietlow nor Cadieux (nor Chet’s folks you’ll ever meet. He was very refl ective years removed from his glory days—was ex- father, Chester) seeks to have his face chis- when I shared with him that his chain had fi n- haling his fi nal breaths. eled on Mount Rushmore. Their brilliance is ished in the top fi ve among an all-star cast of The silence was deafening. Tears for a that it is not fame that drives them, but rath- larger operators. stranger streamed down my face. er a greater humanitarian goal that centers “I know we’re not the biggest store, and As I embraced the victim’s girlfriend, she around their thousands of employees and we’re certainly not the fanciest,” he said to asked about my son and said, “Remember countless customers. me during a recent Cenex corporate event the little things. Have a dream, but remem- in Sioux Falls, S.D. “But we take the basics ber to get there takes lots of steps.” very seriously. Are the fl oors mopped, the Each step is a lesson. Each time we clean bathrooms cleaned? Are the promotions the fl oors, stock the shelves, change out the positioned correctly, is the coffee fresh, is coffee, we are giving our customers—our “From top to bottom, the roller grill working, is our fountain fully fellow human beings—a greater experience. stocked? Our acts are not monumental, but when we our role is to have Johnstone summed it up well for Saman- think about their outcomes, we suddenly ordinary people tha Oller during an interview for our cover transform perfunctory tasks into meaning- story: “From top to bottom, our role is to have ful actions. do extraordinary ordinary people do extraordinary things.” We are saying to our customers and to things.” This is a chain that takes great pride in ourselves, “I care.”

14 csp AUGUST 2015 IMPROVE COMMUNICATION 2 AND ISSUE MANAGEMENT Think about your current process for com- pleting operational audits: how do field teams and managers communicate when What are the major an issue is found? How long does it take for problems you’re issues to be identified and fixed? HOW TO The time it takes between completing the enduring with your audit to inputting the data on a computer, and then manually contacting the people re- current process for sponsible for issues found, makes your data STREAMLINE managing operations? more susceptible to errors. It also increases the chances that people will not be notified Employee productivity? of issues. Mobile data collection streamlines com- YOUR Issue management munication between teams, so issues get re- and resolution? solved faster and don’t go forgotten. Using Collecting insightful operational audit software like OpsMatrix, OPERATIONS managers automatically receive emails data about operational about issues found. Teams can have re - al-time discussions, upload photos and add performance? comments, and mark issues as resolved. All If you are facing any of these challenges, issues requiring follow up can be viewed in BY AMAR MAKIM we have the answer to your problems: mo- one place, so issue management is clearer, bile data collection. easier and always taken care of. PRODUCT SALES Pen and paper checklists and audits are commonly the root of these issues. If you’re BETTER INSIGHTS INTO using this process, consider ditching pen and 3 OPERATIONAL PERFORMANCE & SUPPORT paper and adopting something new. Decoding data and compiling it into charts Mobile data collection will improve how and graphs that accurately depict the results SPECIALIST you manage operations in three ways: you are trying to relay can be a challenge. Using OpsMatrix mobile data collection 1. Increase employee productivity. software, your results are automatically or- 2. Improve communications and issue ganized into reports for you. You can choose management. from four different types of reports, and 3. Provide better insights into operational view clear visual summaries of your data. performance. Get overviews of how locations are doing in a certain region, or drill down into a specific INCREASE EMPLOYEE location. These reports give you richer, bet- 1 PRODUCTIVITY ter insights into operational performance so Do you wish you could reduce the time your you can react faster. employees spend creating and completing checklists, and performing data entry? With CONCLUSION mobile data collection software like OpsMa- trix, you can create online checklists effort- Pen and paper checklists hinder your ability lessly and quickly. You can even import your to optimize processes for managing your op- company’s existing checklists. erations. Increasing employee productivity, Users can access checklists on any mo- improving communication for issue man- bile device, so field teams can perform au- agement and resolution, and getting better dits and checks anywhere – even if they’re insights into operational performance are all offline. Results are uploaded from the device vital elements contributing to the success of to the cloud in real-time. No more time wast- your business. ed on photocopies and data entry, or time Start exceeding standards across your lo- waiting to view results. Employees can fo- cations. Adopting mobile data collection for cus their efforts on more important projects your operational audits and checks is a smart and react to audit results faster, contributing choice that will empower you and your em- to an overall increase in productivity across ployees to make your business run smoothly your business. and more efficiently.