April 30, 2018
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PA: State of convenience: Sheetz, Wawa show it's about more than Shwings and hoagies
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NABCA Daily News Update (4/30/2018)
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CONTROL STATE NEWS
PA: State of convenience: Sheetz, Wawa show it's about more than Shwings and hoagies
PennLive By Charles Thompson April 30, 2018
It's a tough time for chain retailers, who are closing their doors and shedding employees in frightening numbers. But there's one segment of the industry where some Pennsylvania-based companies are just killing it.
We're talking convenience stores, and whatever your political loyalties, your education level, your musical tastes, we're willing to bet that you do business with at least one of them on a semi-regular basis.
These stores aren't just "smokes and Cokes" anymore. Now, the savvy shopper can fill up his or her gas tank, buy a six-pack of beer, and a crabcake sandwich. Which you can eat in while you watch the end of the game on a big-screen TV.
Several Pennsylvania-based chains, industry trackers say, are right at the forefront of this evolution. "In terms of innovation, chains like Wawa, Sheetz and Rutter's are... industry leaders in food service offerings, guest experience and employee relations," said Linda Lisanti, editor-in-chief of Convenience Store News.
The colors of Pennsylvania.
The following map shows the distribution of various convenience store chains in Pennsylvania as of 2016. It is based upon lottery retailer location data.
It's already well-established that, just like sports teams, many people have their favorites. A documentarian is actually now doing a deep dive into the cultural ramifications of what defines the Sheetz fan from the Wawa fan. (Spoiler alert: Simple geography has a great deal to do with it.)
Even Gov. Tom Wolf, proud York Countian that he is, used the powers of his official Facebook account to put in a plug for York-based Rutter's earlier this month, when stories about said film made the rounds.
Whatever your preference, convenience stores are big business in Pennsylvania. As of the end of 2017 there were 4,855 stores across Pennsylvania, employing 77,680 people in full- or part-time positions, according to the National Association of Convenience Stores.
While these aren't typically what you would call family-sustaining jobs, it is also true that even in a growing economy, people still need first jobs, part-time work, or second income streams.
And at a starting wage of $11 to $12 per hour, depending on the labor market, many of these stores are way ahead of Pennsylvania's $7.25 per hour minimum wage.
A look at national store counts and sales figures shows you the relative strength of Pennsylvania's players in the convenience game.
Wawa, based in Media, Delaware County, ranks 10th in the industry in total sales, according to Convenience Store News' most recent Top 100 list, which ranks chains by store count. That rank rises as high as fifth if one factors out the Big Oil-related chains with their national footprints.
Sheetz ranks a healthy 13th in sales -- and seventh after the oil companies are factored out. Even more impressive, Sheetz and Wawa rank #2 and #3 respectively when you look at sales per store. And coming up on the outside lanes is York-based CHR Corp., perhaps best-known to mid-staters as Rutter's, still tiny when compared to Wawa and Sheetz at just 69 stores, but a newcomer to the national Top 100 in 2017.
NABCA Daily News Update (4/30/2018)
3
The innovations are continuing apace.
Wawa has just announced the development of its largest-store ever, in Center City Philadelphia -- an 11,300- square-foot space in the Public Ledger Building at 6th and Chestnut streets.
As reported by PhillyMag earlier this month, it will offer artisanal coffees, specialty baked goods (plus the regular fare, of course) and plenty of seating, as well as some greenery.
It's one of several urban prototypes (a Washington D.C. Wawa opened in December) the chain says it using to make noise in pedestrian-friendly, and upwardly-mobile center city markets.
Along the highways, meanwhile, Sheetz and Wawa are installing car charging stations in the lots of some of their newer stores.
Stores such as Rutter's are now encouraging us to cruise by and try their expanded seafood offerings.
What made convenient stores such a thing?
History tells us that the first convenience store, a forerunner of the 7-Eleven chain, was created at an old-time ice house in Texas.
In 1927, Jefferson Green ran the Southland Ice Company's dock in the Oak Cliff section of Dallas, where people would come to stock up on foot-long freezing blocks they carted home to refrigerate their food.
Green's business was already open 16 hours a day, seven days a week - much longer than the grocers of the day. So Green thought, as the story goes, why not sell milk, bread and eggs, too?
He did, from 7 a.m. to 11 p.m., and you know the rest. Oregon-based retail economist Bill Conorly said the segment really got a shove when Big Oil married it with gas sales and grafted small stores onto their existing gas pump islands.
They realized, Conorly said, there was more profit in the chance of selling cigarettes, a six-pack of beer or candy to every customer coming in for gas, rather than just awaiting the occasional mechanical repair.
The oil companies still dominate the top 10 chains in terms of store count. But as other companies got their own gas distribution deals, we were off to the races.
Meanwhile, supermarkets -- by choosing bigger and bigger prototypes over the years -- unwittingly created a vacuum in the convenience space. "As they get bigger, the convenience of going into a supermarket for one item is low," Conorly said.
By now, we have seen two tracks develop in the convenience store segment, with the chains increasingly embracing the restaurant concept, and essentially becoming fast-food chains with gas pumps.
Meanwhile vast numbers of independent operators -- often left with town center locations that the chains have vacated, or in very rural areas -- are in many cases taking the place of the old corner store.
Conorly expects both to be around for a long time. "There are still plenty of areas where you have a 10-to-15-mile drive to get to a supermarket, but there is a convenience store, and that's where they get their bread and milk, or, hey: 'We need a bottle of ketchup.'"
As for the top-performing chains, they seem to have evolved from and embraced the American car culture -- when you think of it, it's really not that different an experience than the drive-in restaurants of yesteryear: just add gas pumps and retail space, improved technology and better access to fresher and more varieties of foods.
Industry snapshot
Gas is still king. Fuel sales account for 60.6 percent of the total sales of the 2017 convenience store market, according to the latest report from the National Association of Convenience Stores.
It was also the fastest-growing segment, up 14.9 percent from the year before.
NABCA Daily News Update (4/30/2018)
4
Inside sales, meanwhile -- literally those things you go into the store to buy -- accounted for the other 39.4 percent. They rose just 1.7 percent in 2017, according to the trade association's report.
That was a 15th straight year of sales increases, however. The biggest single category of in-store sales is still cigarettes and tobacco products, at 34.1 percent of the total. Packaged beverages -- bottles and cans of beer, soft drinks, juices and teas -- are the second-largest category at a combined 24.3 percent of sales; with in-store food service third at 22.5 percent.
Candy bars, bags of chips and other snacks ran at 9.9 percent, trailed by all other items, from the frozen dinner to the quart of oil to the daily newspaper, at 9.2 percent.
What is a convenience store?
TDLinx, one of the leading trackers of the business, has defined a convenience store as a store with at least 800 square feet, open for business at least 13 hours per day, and selling between 500 and 1,500 different products, including at least two of the following: toilet paper, soap, disposable diapers, pet food, breakfast cereal, tuna fish, toothpaste, ketchup and canned goods.
The East Coast is the capital of the business, according to Lisanti. "For years, the convenience food service trend has been more advanced on the East Coast, led by chains such as Sheetz and Wawa," she told PennLive this month, "and only more recently is this trend gaining traction on the West Coast."
It's not just by chance that we have two of the industry leaders in Pennsylvania. Weak land use planning and development laws here, for example, have made this state particularly prone to the kind of suburban sprawl development that the chain's site locators crave.
But the companies deserve credit, too. Ryan Sheetz, assistant vice president of brand strategy at Altoona-based Sheetz, points to his company's vision statement as a credo that never lets them get too comfortable:
"Our vision is always to create the Sheetz that will put Sheetz as we know it today out of business," Ryan Sheetz told PennLive in a recent interview.
So... Don't be surprised when the chain rolls out new ways to handle transactions in the coming years that this writer can't even adequately explain: Like a coffee mug with an embedded chip that the regular customer can simply scan, pour and leave - no cash register needed.
It's being tested already. To the east, Wawa is just as much of a commercial church to those who tend to worship the Eagles, prefer their pretzels soft, and know the Jersey Shore is always just an hour (or two, depending upon traffic) away.
Spokeswoman Lori Bruce says the company plans to open 50 new stores a year for each of the next several years, roughly split between the Mid-Atlantic states and its burgeoning Florida market.
Wawa's leaders, like the Sheetzes, espouse an ethos centered around both convenience and customer service. For example, CEO Chris Gheysens confirmed to The Philadelphia Inquirer in 2016 that management balked at a suggestion to install automatic doors in the Florida stores, fearing that it would cost them the person-to-person connection of one holding a door open for another.
As Gheysens put it, in confirming the anecdote: "We want to strive to be the friendliest three minutes that anybody has in their day. That's our mission."
There are other Top 100 chains in Pennsylvania, to be sure. Have you seen GetGo stores on a trip to Pittsburgh?
NABCA Daily News Update (4/30/2018)
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It's a wholly-owned division of the Giant Eagle supermarket chain and has established a significant footprint for itself in western Pennsylvania, West Virginia and Maryland. It is number 47 in national store count.
Company spokesman Dan Donovan said last week the convenience store line evolved out of the grocery chain's decision to get into the fuel perks business to reward customer loyalty.
"We had islands, but we realized that to bring all of that expertize and passion for food into a more convenient setting, we could place that in some neighborhoods or urban corridors where you just can't put a Giant Eagle" Donovan said.
Rutters popped into Convenience Store News' Top 100 list for the first time this year (91), and Turkey Hill Minit Markets is represented as one of several brands operated by the Kroger supermarket chain (15).
Collateral damage
The convenience store evolution is isn't good for all. Some people are definitely feeling squeezed by the pressures from the chains.
Joe Ressler, owner of Ressler's Bagel and Deli in Mechanicsburg's Windsor Park Plaza, rues the day that a Sheetz opened up at the busy intersection right down the road.
"It has really affected my business," Ressler said. "I've noticed that I'm not really that busy in the morning any more, and I go by Sheetz and they're just packed."
Ressler's is not a sit-down restaurant that requires two hours of the customers' time, mind you. He's got free parking. And he puts the quality of his product up against any chain any day of the week.
But Ressler said it's hard to beat the convenience of the one-stop shop. "Everyone's in a rush to go nowhere," Ressler said in a recent interview about the convenience store boom. "We're going to be a dying breed in a couple of years, I think."
Restaurants that used to supplement their business with take-out sales of beer have also taken a blow, now that convenience stores are allowed to get licenses to sell six-packs in Pennsylvania.
Will this party last forever?
It seems like times are good for all of these convenience store chains at present. But you can't say there aren't challenges.
For one thing, gas is the cornerstone that brings many customers to the stores' doorstep every week. But will it always be so in an age where the market is pivoting ever so slowly to more-efficient engines and electric cars?
And remember, number two in the revenue pie is tobacco products, a big group whose adult customer base has been on the decline for obvious reasons since the 1970s. What's the future in that?
For Sheetz, Ryan Sheetz said, it was that very realization that these pillars the business is built on may not be strong forever, that a generation ago led the company to take a deep dive into food and beverage.
Finally, there will be others who continually try to wrest the convenience mantle away from these in-and-out stores.
Amazon, Lisanti said recently, sent tremors through the convenience store industry recently with the opening of its first cashierless store, Amazon Go. The Seattle prototype opened to the public in January.
Dollar stores, too, are a growing threat as they add more and more traditional convenience store products. As in many businesses, the future will belong to those who adapt to changing markets the best. It will be fun to watch how it plays out. And, more than likely, you and your wallet will be the judge.
NABCA Daily News Update (4/30/2018)
6
LICENSE STATE NEWS
NE: Midlands Voices: Despite Whiteclay action, state still has issues with excessive drinking (Opinion)
Omaha World-Herald By Chris Wagner, Executive Director of Project Extra Mile April 29, 2018
Today marks the one-year anniversary of the closure of the beer stores in Whiteclay, Nebraska. The decision to close these stores was a significant public health victory for our state that would not have been possible without the tireless efforts of advocates.
Project Extra Mile commends them on their work to bleach the stain of Whiteclay from the fabric of our state. We also want to commend the Nebraska Liquor Control Commission and the Nebraska Supreme Court for their decisions to permanently close the stores.
Efforts by advocates to shut these stores down spanned decades, and Nebraskans have a moral obligation to spend the coming decades helping our brothers and sisters on the Pine Ridge Indian Reservation heal from the harms and injustices inflicted on them by predatory alcohol sales. The fear that the carnage in Whiteclay would spread rampantly throughout Sheridan County has been dispelled. The unincorporated village is now devoid of the lawlessness that defined it when its four off-sale beer stores were operating with impunity.
However, our state’s problems with alcohol don’t end in Whiteclay. We consistently rank among the 10 worst
states (currently sixth-worst) in the nation for binge drinking, and all Nebraskans are paying the tab for this dangerous behavior. According to the latest survey data, we have the second-highest rate of self-reported DUIs in the country. Alcohol-related crashes appear almost daily in local newspapers statewide, and stories often detail injuries to and deaths of innocent bystanders both young and old.
The harms of excessive drinking are more widespread than most would think. According to a study in the American Journal of Preventive Medicine, Nebraska experienced over $1.1 billion in economic costs (health care, law enforcement and work productivity) in 2010 alone because of excessive drinking, $491 million of which was borne by taxpayers. This figure stands in stark contrast to the $27.6 million the state collected in alcohol tax revenue that year.
There is also ample research showing that alcohol causes at least seven types of cancer in the human body, including breast cancer for women. The American Society of Clinical Oncology recently affirmed this link, calling for policymakers, clinicians and organizations to embrace evidence-based strategies for preventing and reducing excessive drinking and its harms, such as those outlined by the World Health Organization.
Despite the many social and economic consequences of excessive drinking, the most effective policies are the least likely to be implemented due to the efforts of a powerful, disingenuous industry working hard to frame alcohol in the most positive light (health benefits of moderate drinking, alcohol as a driver of economic growth, alcohol as a social elixir). Policymakers from the U.S. Congress down to city councils are more likely to respond favorably to the industry’s arguments than to connect the problems in their communities to the need for population-level policies over individual responsibility.
The World Health Organization recommends that governments address alcohol affordability (increasing price), availability (regulating outlet density) and advertising (restricting where and how companies can target audiences, especially youth, with their misleading messages) as cost-effective solutions to this problem. Community leaders are doing all that they can to protect their communities — we need lawmakers and regulators at all levels of government to recognize their role in enacting policies and regulations that would improve the safety and health of our state and communities.
NABCA Daily News Update (4/30/2018)
7
INTERNATIONAL NEWS
Scotland: Supermarkets braced for minimum alcohol pricing
The Scotsman April 30, 2018
Scottish supermarkets are preparing to raise the price of certain high-alcohol products when new minimumpricing guidelines become law on Tuesday.
Retailers will be forced to increase the cost for own brand spirits by up to £3, while larger multi-packs of beer, wine and strong cider will also be affected.
The move, which will set a baseline price of 50p per unit of alcohol, is designed to deter the sale of cheaper
alcohol in an attempt to curb the nation’s drinking problem.
However, certain supermarkets have responded to the incoming price hike by slashing the cost of products as they look to pull in customers hoping to stock up before the increase.
Some of the big six supermarkets have cut prices on bottles of 70cl spirits to as little as £10, while others have - introduced huge savings on multi-packs of lager, with 20-can packs available for just £10.
It is hoped that minimum pricing will help to reduce the number of alcohol-¬related deaths across the country, ¬saving at least 400 lives over the next five years and leading to around 8,000 fewer hospital admissions.
Under the new laws, a 700ml bottle of vodka, with a typical alcohol content of around 37 per cent, could not be sold for less than £13.13.
For whisky, the minimum price would be £14 and for 20 cans of lager, in 440ml volume cans, the base price would be set at £17.60.
But, with the minimum price for a pint (568ml) of beer being about £1.14 and large glass of wine about £1.50, the move is unlikely to have any noticeable affect on pubs and restaurants.
The new law is not a tax and does not generate income for the government. Instead its aims it to reduce the availability of cheap alcohol by setting a floor price.
In particular, ministers want the guidelines to target large bottles of super-strength cider, which currently retail for less than a bottle of cola.
A two litre bottle of strong cider at 7.5 per cent abv (alcohol by volume) is 15 units of alcohol and should cost £7.50.
