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Super Beer, Snack Sales?

With The Nielsen Co. predicting nine out of 10 U.S. households watching the Super Bowl at home or at a friend's or relative's house -- rather than from a restaurant or bar -- there is great potential for increased sales of related products at c-stores this weekend.

Despite the flat beer sales coming out of the channel, countless Super Bowl-themed beer-and-chip displays no doubt dot the nation's corners this week. Years ago, when Convenience Store News ran an annual display contest, scores of entries were based on the Bud Bowl or similar beer themes built during the week leading up to the Super Bowl. While the Super Bowl ranks relatively low among holiday beer sales -- after Fourth of July, Memorial Day, Labor Day and Halloween, according to Nielsen research -- Super Bowl Sunday continues to be a bigger and bigger event, with consumers drinking billions of servings of beer at home.

"Beer marketers are taking advantage of that opportunity to drive sales during what is typically a slower period for beer purchases," noted Nielsen's Nike Lake, vice president, group client director, Beverage Alcohol.

This Sunday's Super Bowl viewers also are expected to stock up on nearly 166 million pounds of snacks, especially salty snacks, leading up to the big game. Potato chips are the big winners, followed by tortilla chips and pretzels. The snack with the greatest growth last year? Popped popcorn, sales of which were up 32 percent for the two weeks ending Feb. 2009, compared to 2008.

Still, only 5 percent of households expect to spend more on food and beverages for the Super Bowl this year, compared to last year's game . Nielsen's survey of more than 28,000 households reveals 86 percent of viewers plan to spend the same amount or less on food and beverages for Sunday football contest.

We're bringing guacamole and mini meatballs over to our friends' home on Sunday. What about you? 

 -- Barbara Grondin Francella

 

The Power of C-store Foodservice

CSNews Online has been reporting on recent store openings by Casey's General Stores Inc. and Wawa Inc. There are many reasons -- marketing strategy, execution, conservative financial moves, among others -- these two players have weathered the country's recession as well as they have, and continue to grow.

One commonality: popular foodservice programs. Casey's pizza and Wawa's hoagies have earned customer loyalty levels that surpass most c-store programs, and many fast feeders'.

A clue to the importance of these proprietary programs to the chains' overall success is found in a recent Convenience Store Monitor survey by The NPD Group, which found fresh prepared food buyers averaging 7.8 visits over a 30-day period, compared to 5.66 visits for all c-store shoppers.

Perhaps even more meaningful to the bottom line: these fast food shoppers purchased 4.1 products versus 1.64 products bought by all c-store shoppers, and their average check was $1.65 higher than all c-store shoppers.

Considering their foodservice habit, it's probably safe to assume the gross profit earned on that extra $1.65 is higher than a traditional stores' typical sale too.

The c-store industry is in a terrific position to meet customers looking for a value in fast foods. But operators have to deliver all three pieces of the recipe: convenience, price and quality. Too often, our industry stops at the first two ingredients. -- Barbara Grondin Francella 

What Happened to Global Warming?

If you’re like me, you must be sick and tired of hearing about global warming. The past week, a cold spell placed most of the country into a deep freeze, with temperatures in Florida falling below 32 degrees F for several days in a row last month.
And lest you think this is just a U.S. phenomenon, temperatures dropped below zero in Scotland and 1.3 feet of snow fell in parts of southern England last month. Australia – almost unbelievably – had snowfall two weeks into its SUMMER – which officially began Dec. 1, 2009.
The timing of all this couldn’t be more ironic – following last fall’s Copenhagen Climate Conference where global warming alarmists argued that “the future of humanity” was at risk if stringent measures weren’t taken. Mostly these measures amounted to developed countries giving billions of dollars to undeveloped and corrupt countries. Meanwhile, in the U.S., Congress is mulling a hair-brained “cap-and-trade” scheme that will place onerous taxes on energy consumption.
Now, I am not in favor of companies pumping toxins into our air and water. Common sense tells you that polluting the environment and unfettered use of natural resources like oil and gas is wasteful and dangerous. And, I certainly don’t think it’s a good thing for the U.S. to be so dependent on foreign fuel. But common sense also tells me that you don’t destroy your economy on the basis of sketchy and, perhaps rigged, climate change data. Meeting the future energy needs of the planet is a very real problem – one that will require an open mind about developing and using all kinds of different fuel sources – based on marketplace realities not politicians’ pipedreams.
So, should retailers care about “going green?” Yes, because when it comes to business, going green makes good business sense. More than a quarter of U.S. adults say environmental issues are extremely or very important to them when deciding what products or services to buy – and 18 percent prefer to do business with a “green” company. Nearly one-third of the consumers polled said they seek out green products and are willing to pay at least a little more for them. No wonder smart retailers are selling more “green” products.
Add those statistics to the expense savings realized from utilizing some basic energy saving technologies, like LED lighting, and it could make all the difference between turning a profit or loss. So perhaps we should call it, “Going Black,” instead of “Going Green.”

-- Don Longo

To Catch A Thief

A new study sponsored in part by ADT and Sensormatic Retail Solutions suggests employees may be stealing less merchandise, but swiping more cash, while shoplifting by consumers and gangs may be on the rise.

"Loss Prevention 2010: Retailers Battling Shrink in Tough Times" an on-line survey of 83 multi-national retailers conducted by Retail Systems Research (RSR), reveals 68 percent of retailers peg employee theft of merchandise as one of their top concerns, down from 80 percent the year before. 

"Traditionally employee theft has been the largest portion of the retail crime pie and it still is, but we believe we are seeing a shift in employee theft as retailers get better at spotting it," said Lee Pernice, retail director for ADT Security Services. "At the same time, the economy is reducing the number of employees in the stores and creating more opportunities for shoplifting and gangs."

According to Pernice, retailers have gotten better at identifying employee theft. Still, the economy presents more opportunities for shoplifters because there are fewer watchful employees on the store floor and more ways to resell discounted stolen items online or at flea markets.

While all this may be true, the way these results were presented bothers me. First, in the c-store industry's case, there has been no research supporting the case for two employees on duty, rather than one, as a robbery deterrent. Though, perhaps in large format stores, the more eyes on potential shoplifters, the better.

Also, while there is no doubt investments in security technology have helped retailers spot dishonest employees, perhaps some of the decline in merchandise theft by employees could be attributed to retailers doing a better job of recruiting and retaining honest, career-minded associates who are less likely to steal cigarettes or dip into the inventory. Or perhaps those with c-store jobs value them more, and are less likely to steal from their employers.

At the same time, I've noticed a big spike in news alerts detailing crime in c-stores. This industry has been one of the most proactive in protecting store associates from outside crime. In 1975, 7-Eleven (then The Southland Corp.) conducted the first of several studies to learn why robbers target certain retail operations. Researchers took robbery-deterrence advice from former convicted criminals and developed a store employee training program. In the early ‘80s, 7-Eleven again interviewed convicted armed robbers. The survey found that robbers still looked for the same things prior to a robbery: cash availability and visibility into and out of the store. In the mid-'90s, 7-Eleven sponsored a third study of convicted armed robbers. The two top considerations prior to a robbery were the amount of money available and escape routes.

Considering the changes in economic climate, organized shoplifting rings and security equipment available in the last decade, perhaps it's time for another industry look at c-store crime and safety. -- Barb Grondin Francella

$5 Per Gallon By Summer?

Predicting future crude and gasoline prices is like predicting the winner of "American Idol" based on the first round of Hollywood tryouts. You may have a good feeling about where the whole thing is headed, but then Kris Allen beats Adam Lambert.

As we head into 2010, anticipating a modest economic recovery, U.S. investment bank Goldman Sachs forecast oil prices to rise to an average $90 a barrel this year, before increasing to $110 in 2011, as supplies are drawn down and emerging market economies boosts demand.

At the same time, the U.S. Energy Information Administration predicts rising crude oil prices will contribute to an increase in the annual average regular-grade gasoline retail price from $2.35 per gallon in 2009 to $2.83 in 2010, with pump prices approach $3 per gallon during this year’s driving season. 

But, Mary Occhino, acclaimed psychic from Long Island, N.Y., who has a radio show on SiriusXM radio, sees gasoline reaching $5 per gallon by August. She also predicts employment rates will rise by 8 percent.

Mary predicted the Yankees winning the 2009 World Series in six games . Based on past accuracy of some analysts’ longer-term predictions, I’m betting Mary O. is right.

Where do you see gasoline prices going this year? -- Barbara Grondin Francella

When In Doubt, Bet On Chocolate

A few days ago, Mintel published figures that nearly any stressed out, middle-aged woman could have intuitively come up with -- even in a worldwide recession, countries near and far are reporting increasing chocolate sales.

In China and the Ukraine -- two countries hardly recognized for an abundance of chocoholic -- chocolate confectionery sales rose 18 percent and 12 percent, respectively, this year. I'll drink a hot Ovaltine and gobble a handful of M&Ms to that.

Other countries have seen chocolate bars, bags and boxes flying off the shelves, though at lower rates. The British drove their chocolate market up nearly 6 percent, while Americans purchased 2.6 percent more chocolate this year than in 2008. (Mintel didn't break out regional increases, but I suspect the 10804 zip code probably saw a huge bump.)

Argentinean sales rose nearly 2 percent this year, while Belgium, a country that lays claim to some of the world’s best chocolate, saw sales increase by more than 3 percent.

"It's clear that despite economic trouble this year, the world's chocolate lovers didn't deviate from their favorite treat. Chocolate is a small, affordable indulgence for shoppers who are cutting back on spending elsewhere. Even in countries not known for chocolate consumption, sales are on the rise," noted Marcia Mogelonsky, Mintel's global food and drink analyst.

The Swiss spent the most on chocolate, forking over the equivalent of $206 per person per year. Brits and Belgians followed, spending $106 and $90, respectively. Americans satisified their chocolate cravings by spending $55 on average. (Scores of Americans must be spending zero on chocolate, since my friends and I probably spend in the triple digits).

Mintel’s Global New Products Database (GNPD) reports that manufacturers launched nearly the same number of chocolate products this year as in 2008. I've seen other research indicating 2010 will be a big year for new candy item introductions.

For more information on how U.S. c-store operators can nab more chocolate sales, especially as new items are first released, the February 2010 issue of Convenience Store News. Until then, pull up a chair and have a few of these dark chocolate holiday Hershey Kisses that found their way to my desk. -- Barb Grondin Francella

Value In Vogue

As most of us say a very hearty "See ya!" to 2009 and look to better times in the new year, c-stores more than ever need focus on offering a value.

It's taken more than a decade for the c-store industry to shed its reputation as a place to buy cigarettes, beer and gasoline and an overpriced purveyor of nearly everything else. Now, many c-store chains have weathered the recession by offering true value, in the shape of quality, affordable take-out options, everyday fair pricing and private-label alternatives. Recent research by The Nielsen Co. revealed consumers’ fundamental spending adjustments brought on by the long recession are likely to last well into the next year. Either by choice or necessity, consumers' new-found thriftiness will continue. But focusing on very low prices at the expense of all other variables threatens margins, Nielsen noted. Value messaging must also include some point of differentiation. My mind immediately goes to Trader Joe's whenever I think about this. Their relatively limited selection includes unique products at lower-than-supermarket prices.

 Case in point: The chain's one-of-a-kind, delicious holiday shortbread star-shaped cookies dipped in dark chocolate and tiny gingerbread men cookies, which retail at two-thirds the price of a package of Oreos. In the fresh foods area, the packaged salads are priced $2 less than the nearest Cosi casual restaurant; my teenager packs them for her school lunch.

 But they still bring in a margin. We also stock up on the  terrific frozen four-cheese mac and cheese my five-year-old requests daily that retails for nearly $5. (Or fives times the boxed stuff when it's on sale.)

I drive five miles out of my  way to shop at this store. Can't say that about many -- actually any -- other food retailers. Plus, they give out balloons and let you enter a weekly contest for a gift card whenever you bring in your own bags. Can't beat that.  -- Barbara Grondin Francella

The Best News of '09

CSNews Online just revealed its 2009 Year in Review, a compilation of the most popular news stories published on its Web site, based on the number of online views, for each month of 2009.

The staff at CSNews would like to know which news stories were your favorites from the past year -- be it informative articles that helped your business or lighthearted stories that made you smile -- and why.

My personal favorite for 2009 was an article about an online advertising campaign launched by Alimentation Couche-Tard Inc., which received criticism by professional clowns.

One of the campaigns featured: "a multi-colored clown … being pushed through a saw, with a similar wave of festive confetti coming out the other end," CSNews.com reported in May 2009.

While it may sound shocking, the videos are done in a zany, amusing way that makes you wonder what's in the drinking water of our northern neighbors. Check them out at sloche.com.

What's your favorite news from 2009?

Florida Health Officials Going to the Dogs

The efforts of Florida Health and Agricultural Department officials to ban Cody, the convenience store dog as he’s become known, from a Clearwater, Fla., BP c-store/gas station would be laughable if it wasn’t another sign of government bureaucrats run amok.
If you haven’t heard about him already, Cody is the chocolate Labrador pet of Clearwater BP owner Karim Mansour. The dog had become a minor celebrity as he greeted local customers at the store’s drive-thru window and inside the store. Then, Florida Health Department inspectors – who apparently have no serious health issues to deal with – decided to add Cody to the state’s swelling unemployment roles. They said the presence of a dog in an area where food is sold is a violation of Florida health laws – even though the only food sold are packaged items like canned energy drinks, chips, crackers, meat snacks, and candy. No food is prepared at the site.
After a warning, Agriculture Department officials then got involved and told Mansour, who adopted the six-year-old pooch three years ago, to stop bringing Cody to work, or all of his food items — mostly things like canned energy drinks and Slim Jims — would be declared unfit for consumption.
Well, customers aren’t taking this laying down. Last weekend a Facebook group supporting Cody was created and quickly collected about 3,000 members. “Cody is my HERO!!! I would drive an extra hour to be greeted by this smiling face. Let Cody stay ,” said one poster.
It doesn’t appear yet that any of this support will sway Florida officials, though. Pity. And, we still want to put health care in the hands of government bozos?
To view a video of Cody greeting customers before he was banned, go to http://www.tampabay.com/news/humaninterest/article1056121.ece.

-- Don Longo

Stewart's Shops Strengthened By Community Ties

Those of us who subscribe to the "what goes around, comes around" theory of life should take a minute and think about Stewart's Shops.

 

Search "Stewart's Shops" in Google News and the breadth of the 327-store chain's charitable efforts becomes immediately clear. (Well, first you have to wade through the scores of news items about Twilight star Kristen Stewart.)

 

While the recent $3.9-million donation by Stewart's Shops'  co-owners Susan and Bill Dake benefiting the Community Foundation for the Capital Region scored a few local headlines, much of what the chain does goes unheralded.

 

Currently, the Saratoga Springs, N.Y.-based retailer's annual Holiday Match,  a qualified 5013c program, is in full swing. In short:  Stewart's Shops matches customer contributions to thousands of local children's organizations. In place since 1986, Holiday Match has raised $12 million. (The chain does not deduct administrative costs.)

 

Stewart's Shop's 2008 Holiday Match raised $1.1 million. This year, the chain expects more than 1,000 applications for grants.

 

Also this holiday season, Stewart's Shop is selling admission buttons to Saratoga's First Night event, the family-oriented, alcohol-free celebration on New Year's Eve, the only c-store operator to do so. Though not a charitable endeavor, it is one of many local activities in which the chain involves itself.

 

This retailer's community service and activities are widespread, year-round -- and diverse. The chain supports food pantries by donating certificates for milk and helps fund wildlife biologist Beth Bidwell, who gives up to 200 educational presentations each year featuring rehabilitated animals.  

 

This type of community face time, along with a conservative growth strategy and honest communication with store employees, is no doubt a crucial factor in Stewart's steady performance through the recession.  Last year, sales grew 5 percent last year; profits were up 7 percent.

 

I'm betting Stewart's karma will be on display when this year's sales results are posted too. -- Barbara Grondin Francella