Marketing Makes the Difference at Sheetz

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By Tim Lazor, Contributing Editor Marketing Makes the Difference at Sheetz In addition to outstanding service and unsurpassed leadership, a keen focus on the customers’ needs has propelled the Pennsylvania chain into Destination: an elite class of retail marketers. Sheetz Inc. York, Pa.

HEETZ. ONE WORD AND all the food—in ways that electrified the and met his needs with creative food images come to mind: Made industry, broke sales records and cre- programs, coffee, snacks and loyalty To Order (MTO) foodservice, ated a foundation that helped put programs, and he rewarded us with a great store design, loyal them on the path they’re on today. repeated purchases. S Those eight years were a key employees and a world-class distribu- tion center. The list goes on and on. intersection of opportunity meeting Recognized that district manag- You know how well the chain is preparedness. 2 ers and store mangers were the operated, how tough a competitor Here are the core tenets we used company’s secret weapon. I chal- it is and how it continues to grow to to catapult Sheetz to a multibillion- lenge you to visit 20 Sheetz stores in unprecedented levels. But did you dollar industry juggernaut. Pennsylvania’s Blair and Cambria ever wonder, “What caused that counties where Sheetz was born. The exponential growth? Where were the We really understood the Sheetz women who run these stores are critical moments?” or “How did one 1customer and his needs. We didn’t from hard working European heri- dairy store in Altoona, Pa., grow to be just refer to him as “Bubba.” That’s lazy tage. They run Sheetz stores as they this successful?” targeting. This blue or white collar cus- run their homes—clean, effi cient and Ever wish you could steal a tomer had a great work ethic. He with pride. They know their custom- glimpse of the behind-the-scenes spent lots of time on the road in a lot of ers and if they don’t recognize you focus that makes them great? cold, wet or snowy Northeast weather. at first, they’ll give you a long look You can. He had one Sheetz store he called to make sure you can be trusted to One critical timeframe for Sheetz his own, and he watched his money enter their Sheetz family of custom- was an eight year window from 1993- and looked for value. We understood ers. If you behave yourself—and I 2000 when foodservice and marketing suggest you do—those employees started to click. The chain went from 150 will be as loyal to you as family. These stores and $300 million in sales to 300 women were critical to the opera- stores and $1 billion in sales. During that tional success we were attempting time, I worked for a Pittsburgh consult- in a period of rapid growth. ing group and Sheetz was my account. I was an insider with the Sheetz team Leveraged designated media and helped implement new retail strat- 3areas (DMAs). In those eight years, egies and advertising campaigns, and the cost of TV, radio, outdoor and print experienced all the 24/7 madness that advertising was relatively inexpen- rapid growth brings. sive in their geographical footprint Our team, working with Louie compared to DMAs nationwide. That Sheetz, Ray Ryan, Jeff Wild, Dan meant if Sheetz wanted to raise the McMahon, Bill Reilly, Dave Hazlet and bar by promoting products in cre- With its trademark focus on service, Sheetz Sharon Vaughn, was able to market ative new ways in the media, they has cultivated several generations of conve- Sheetz products—especially MTO nience store customers. could, and they did.

8 Convenience Store Decisions l May 2009 We promoted new MTO foods next test. That kind of trust is rare in an architect to design a store of the when the industry thought it couldn’t business today. future, which infl uenced some of the be done. We created the Sheetz chain’s current store design. brand of gasoline on TV and used Used TV to reach customers quickly the tankers and facilities to reinforce 6and cost effectively. We learned Systematized new store openings. the brand and the quality message. that the best way to get customers in 8Not only were we facing chal- We introduced Jacks cigarettes, “it” the stores during the day was to reach lenges we had never seen before, cola and a range of private label them at night. TV advertising was a key but to top it off, Stan and Steve Sheetz products that not only cost less, way to make that happen. Because were shooting for a goal of opening but helped Sheetz negotiate better we had tested a new high margin 40 stores a year. We had to get super prices on national brand products. MTO product and had confi dence in organized and create a systematic, Our mantra was get leverage to fuel its success, the investment in TV was step-by-step campaign to open a the rapid growth. just that—an investment. The resulting Sheetz store—or several simultane- number of new customers trying prod- ously—during a three month period. Used price point to drive sales. 4We never believed retail adver- tising had to look hokey. Everything we advertised looked fi rst class, but it almost always had a price point. Why? We felt this was the best way to communicate our value to that cus- tomer we knew so well, and it never failed to move foot traffic through the stores.

Emphasized testing and rolling 5out new food products. The mis- sion developed by Steve and Stan Sheetz during those years was, “Get people on the lot with low prices on gas, so we can sell them something inside the store.” That something was MTO food. But the key to our food pro- Building on its brand equity, Sheetz last year launched Sheetz Bros. Kitchen to make and distrib- gram was keeping it energized with ute fresh foods daily to the company’s more than 350 convenience stores across six states. new products. We designed a “test it and roll it” program that had us con- stantly developing new products, ucts at Sheetz was a major element We sequenced a teaser cam- such as the MTO steak sub, DOTZ bak- in growing the chain into the regional paign that created buzz about the ery and Schmuffi ns, testing them in 15 foodservice provider it is today. new store, an educational phase stores, working out the kinks, then roll- promoting the reasons to visit Sheetz ing them chainwide. Designed the store to communi- and a “we’re happy to be part of It might come as a surprise, but 7cate the Sheetz message. When your community” phase. After that, the key element that made this suc- you think of Sheetz, the fi rst image to the store was folded into our monthly cessful was trust. As a company come to mind is often the red canopy. corporate promotions. grows, you risk introducing a clunker. We were proud of the canopy and Still, don’t be afraid to try new stuff. referred to it as our Golden Arches. We had fun. During those eight At Sheetz, we were expected to We always challenged ourselves to 9 years, I was lucky to work with a make mistakes. But there was never see if the store design could create team at Sheetz that worked incred- the politics of blame if we laid an more uniqueness, functionality and ibly hard, cared deeply about the egg, which we rarely did. We simply communicate more effectively with products we marketed and kept a learned from it and moved on to the customers. Our group even hired sense of humor under pressure.

May 2009 l Convenience Store Decisions 9