LAVAL, Quebec — In what may be the coining of a new industry term, Circle K officials recently described an emerging tobacco customer—a “poly user”—who dabbles in cigarettes, moist smokeless and even vaping depending on the occasion.

During the chain’s July 12 earnings call, officials with Circle K’s parent company, Alimentation Couche-Tard, described its current tobacco numbers as following those of the major manufacturers, which have been experiencing slow but expected declines in volume while maintaining a strong position on price. Beyond that, Brian Hannasch, CEO for Couche-Tard, said the stores “continue to expand our back bars and allow adequate presentation of the newer innovations, whether that be electronic or [other] products that continue to grow.”

Noting growth in moist smokeless and cigarettes, Hannasch said, “We are seeing more and more consumers become poly users, so they are multiple users. They may use cigarettes for an occasion; they may use more smokeless for a certain occasion or an electronic cigarette or vaping unit as another occasion.”

The chain continues to grow its tobacco volume on a same-store basis, Hannasch said, with convenience stores in general appearing to hold an advantage over other tobacco-retail outlets.

Cigarettes have a lot in common with fuel, he said. While a declining business overall, successful c-store chains continue to thrive with both. “[There’s] a lot of low-volume sites in the industry both in Canada and in the U.S., and those sites are pressured over time from a lot of different fronts,” Hannasch said. “Demand will be redistributed and the higher quartile, high-quality assets and those players with a strong backcourt are going to be the ones that win in that environment.”

Laval, Quebec-based Couche-Tard operates more than 7,200 c-stores in the United States. It ranked No. 2 in CSP‘s 2017 Top 202 ranking of the largest chains in the country.

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The retail landscape has shifted, and for convenience-store operators, beating the competition can seem like an ever-moving target. New players have recently entered the retail scene and are constantly disrupting it with different strategies.

Here are what five of them are up to and how c-stores can fight back.

Amazon

Amazon, says Michael Sansolo, a retail specialist and president of Sansolo Solutions in Washington, D.C., “is becoming an omni company, with a strong online and offline presence.” Amazon’s so powerful because from time to time it fails, such as with its phone. “But their willingness to experiment shows everything is possible,” Sansolo says.

Amazon’s also disrupting the landscape through its Prime membership, says Neil Stern, senior partner with McMillan Doolittle consulting firm in Chicago, which is garnering uber-loyal customers. No one is immune to the threat of Amazon, he says, especially given its recent Whole Foods acquisition, and we may see more acquisitions, Stern says.

What can c-stores do?

• Implement a loyalty program.
• Consider partnerships with Amazon, or local retailers, to leverage convenience and be a pickup point.
• Ensure you are properly staffed to deliver faster checkout, somewhat akin to the Amazon Go store, which has no checkout.
• Review customer demographics for each store, and work with suppliers to stock stores with the convenience items your customers want.

Wal-Mart

Wal-Mart is also becoming an omnichannel retailer, but is doing it differently. “They’re buying companies and buying expertise,” says John Torella, senior advisor with J.C. Williams Group, a retail consulting firm in Toronto. “That gives them an opportunity to leapfrog in learning in almost every category.”

Having brick-and-mortar stores differentiates the chain, says Stern. “Wal-Mart’s big bet is driven towards click-and-collect, leveraging the 3,000-plus stores to their advantage. They are trying to offer a seamless omnichannel experience leveraging their footprint.”

What can c-stores do?

• Don’t lose sight of convenience. The consumer experience must be fast and efficient.
• Offer relevant items consumers seek out at convenience stores.

Zara

Zara radically changed the way the clothing industry operates, and it’s been drawing in American consumers since 1989.

“They’re a technology company and have made a commitment to technology and big data. They’ve disrupted the distribution and supply channel by getting goods to stores in two weeks whereas it used to be two or three months,” Torella says.

“Artificial intelligence, augmented reality and virtual reality, voice-activated search, the internet of things, robots—these are all the technology disruptors and are being integrated into Zara.”

What can c-stores do?

• Collect and analyze consumer purchase data from your stores. 
• Evaluate market-basket data, leverage that data with promotions and new products, evaluate again, and repeat. 
• Look for opportunities to compress the order cycle and implement agile inventory-management models.
• Use technology to get fresh foods to stores faster.

Kroger

Like Zara, Kroger relies on technology. The company “is dominating the traditional grocery space with a data driven, customer-first approach,” Stern says.

This will stand Kroger in excellent stead. “The customer-first approach and deep analytics driven by 84.51º (formerly Dunnhumby) can be adapted to meet the changing needs of business. Kroger applies data for customer marketing, pricing, assortment analytics as well as the nuts and bolts of operating good stores,” says Stern.

What can c-stores do?

• Start actively using consumer purchase data and loyalty programs to drive promotions and customer decision-making.
• Evaluate customer-service trends, speed and efficiency of checkout

Aldi and Lidl

Aldi and Lidl operate small stores with low prices (thanks to private labels) and no frills.

Lidl offers “very low prices in nice looking stores, and it’s an easy store to run with a low number of SKUs,” Sansolo says. “Wherever they’ve gone in Europe, they’ve caused huge disruption and huge loss of market share. And the company has the ability to open a lot of stores.”

Aldi, says Stern, is focused on “creating a low cost, simpler shopping trip.” Aldi is rapidly growing its store base and is up 2,500 units so far, which makes it the third-largest grocery player in the U.S.

What can c-stores do?

• Consider loss-leader or low-margin pricing on high-demand items, but be wary of potential out-of-stocks. Optimize inventories and watch them closely.
• Embrace private label—specifically a differentiated program, such as 7-Eleven’s, Stern says.
• Look for key products to put on special to blunt the impact of the deep-discount players.

DENVER & WOODBURY, N.Y. — The traditional Arnold Palmer will get some punch through a new licensing agreement between AriZona Beverages and Molson Coors Brewing Co.

Molson Coors is partnering with Hornell Brewing Co., an affiliate of AriZona Beverages, to market and distribute a new flavored-malt-beverage (FMB) version of the Arnold Palmer, a mix of iced tea and lemonade popularized by the golf star.

Denver-based Molson Coors will market Arnold Palmer Spiked Half & Half in the United States through MillerCoors, Chicago. The brand will be introduced later this year in select markets followed by a full national launch in early 2018, according to the company.

“Arnold Palmer branded beverages have a very strong following, and we believe this new hard iced tea and lemonade will provide consumers with even greater choice, as well as further extend our leadership position in the FMB space,” said Kandy Anand, chief growth officer for Molson Coors.

The agreement opens opportunities for Molson Coors to potentially distribute the brand outside the United States, as well as explore other product collaborations with Hornell Brewing and AriZona Beverages.

“With their wide distribution network, partnering with Molson Coors was a natural choice for us to introduce this new spiked version of our popular, great-tasting Arnold Palmer beverages,” said Don Vultaggio, chairman and owner of Hornell Brewing and AriZona Beverages, Woodbury, N.Y.

Licensed under the authority of Arnold Palmer Enterprises and Innovative Flavors LLC, AriZona Beverages is responsible for the commercial development of the authentic Arnold Palmer beverage, a proprietary blend of iced tea and lemonade and named after the legendary American golfer.

Arnold Palmer Spiked Half & Half is a flavored malt beverage made with real juice and select teas from around the world with an alcohol by volume (ABV) of 5%.

Terms of the agreement were not disclosed.

YORK, Pa. — Rutter’s Farm Stores has added electric-vehicle (EV) chargers, with the potential for more as the market develops.

The Pennsylvania chain flipped the switch on the Level 3 DC fast chargers this week at its Mountville and New Cumberland, Pa., convenience stores. The charging stations, which can service two EVs at the same time, deliver an 80% charge in about 30 minutes.

The new addition to Rutter’s fuel offer was about a year in the making, Derek Gaskins, chief customer officer, told CSP Daily News. Nissan had approached the c-store chain about adding the charging stations to help support its No Charge to Charge program. Launched in 2014, the program offers customers who buy or lease a new Nissan Leaf EV with two years of free public charging at a network of participating locations. Nissan is debuting its latest-generation Leaf EV in September.

“Part of the future of fuels is making sure we represent all of them,” said Gaskins. “With foodservice and our loyalty program, we give people choices.” The two stores were a “natural fit” for the charging stations because of their proximity to high-traffic corridors and the Harrisburg and Philadelphia markets, where Nissan would like to build up charging infrastructure near its dealerships.

The charging stations, which were installed with the help of charging station provider EVgo, are located next to parking spaces near the lot’s perimeter. There was a logic to this placement.

“For one, they are more visible to people driving by,” said Gaskins. Secondly, the first retailers to add EV charging stations—such as grocery stores—tended to put them in prime parking spots right in front of the store.

“That’s not the right message—you’re handpicking winners,” said Gaskins, noting that the purpose of those parking spots closest to the store is for customers who want a quick in-and-out experience.

“Those on the periphery can park a little longer,” he said. “If someone were to tie up that spot, it wouldn’t take away from the rest of the business.”

Rutter’s shared in the cost of the EV charging stations, or around “several thousand” dollars for each, and paid to help upgrade the electrical infrastructure of the sites to accommodate them. Nissan, however, paid the majority of the EV chargers’ cost.

“The days of the retail free model is long gone,” said Gaskins, who added that by fronting some of the investment, Rutter’s now has “skin in the game.” It also gets a share of revenue from the charging stations. Participants in the No Charge to Charge program get to use the charging stations for free, while other EV owners pay a small fee. The charging stations are equipped with both CHAdeMO and SAE Combo connectors to service different types of EVs.  

The Rutter’s EV charging sites are included on the PlugShare EV charging station locator app, and the GasBuddy fuel price information app.

While these two locations are a test, “we would certainly like to launch more,” said Gaskins. He is planning a marketing push to introduce the charging stations to Rutter’s customers over the coming weeks.

Other c-store retailers that have partnered with Nissan include USA 2 GO Quick Stores, Mark Oil, Calloway Oil, Ricker Oil, Terrible Herbst, Spinx Co., Mapco and Sheetz. 

With roots dating back to 1747, Rutter’s Farm Stores, York, Pa., owns and operates more than 60 convenience stores in Pennsylvania.

SMYRNA, Tenn. – Franke Coffee Systems has named Corrie Byron to the position of president of Franke Coffee Systems North America, effective immediately.

Byron will be responsible for accelerating sales and growth of Smyrna, Tenn.-based Franke Coffee Systems’ business in the United States and Canada. Byron will report to Thomas Patrick Meier, chief executive officer of the company’s global coffee systems division, based in Aarburg, Switzerland.

“Corrie will leverage her extensive background in the food and beverage industry to help Coffee Systems fulfill its goals in the Americas,” said Meier. “She shares our vision of Franke as a ‘one-stop shop’ for hot beverage solutions, and will help drive expansion of a product range that provides high-quality and innovative machines for the industry’s most dynamic operators.”

Byron most recently was president of the foodservice and international business units of The Oneida Group, marketer of tabletop brands such as Oneida, Anchor Hocking, Buffalo and Delco. Previously, she spent nearly 20 years with Kerry Group, a global ingredients, flavors and foodservice solutions company, most recently as its vice president and general manager. 

Franke Coffee Systems provides solutions for coffee preparation beyond the kitchen. The global product range encompasses fully automatic, as well as traditional, coffee machines, capsule machines, and high-volume coffee brewers for the convenience foodservice segment and restaurant operations.

Franke Coffee Systems is part of the Franke Group, which produces diverse items such as consumer kitchen products, foodservice kitchen systems and equipment and restroom fixtures. There are 9,200 employees working within the Franke Group’s 72 subsidiaries, which are located in 37 countries around the world.

MINNEAPOLIS — Last week, the San Francisco Board of Supervisors voted unanimously to ban the sale of all flavored tobacco products, including menthol cigarettes, menthol, mint and wintergreen tobacco products, flavored e-cigarette/vapor products, flavored cigars and flavored pipe tobacco. The ordinance is scheduled to go into effect in April 2018, and it affects every kind of retailer that is licensed to sell tobacco products in San Francisco.

A significant industry effort was undertaken to oppose the ordinance, because the breadth of the ordinance would have a devastating economic effect on retailers that sell tobacco products. With tobacco-product sales accounting for up to 36% of in-store sales for an average convenience store, being prohibited from selling all flavored-tobacco products, including menthol cigarettes, would likely mean that retail jobs will be lost and a substantial number of stores could be forced to close.

However, with the passage of the San Francisco flavor-ban ordinance, a new coalition called Let’s Be Real San Francisco has been formed to launch an effort to gather signatures from San Francisco voters to require the city’s Board of Supervisors to place a referendum question on an election ballot next year. Under the city’s code, a 30-day period is allowed to collect a sufficient number of voters’ signatures for a referendum question.

In the event that the required number of signatures is obtained, there are three different outcomes that the San Francisco Board of Supervisors could consider. First, schedule the referendum vote for the next regular primary election that is planned for June 5, 2018. Second, set a special election date earlier than the June 5, 2018, primary election date. However, San Francisco would need to cover the cost of a special election separate from the scheduled June 5, 2018, primary election. Third, the Board of Supervisors could consider repealing the flavor-ban ordinance.

The Let’s Be Real San Francisco coalition is comprised of concerned residents, business leaders, retailers and trade associations, including NATO. Securing the needed number of signatures for a referendum question to be placed on the ballot is a significant task, but one that is being taken in an attempt to protect the right of retailers to sell lawful products and the right of legal-age adults to purchase legal tobacco products.  

DEERFIELD, Ill. — A global cyberattack that struck Mondelez International in late June shrunk the company’s second-quarter revenue growth by 3%, the company said.

The Deerfield, Ill.-based snack and candy maker said it is making progress in restoring its systems after the June 27 attack, which disrupted its shipping and invoicing in the last few days of the second quarter.

“There are a few markets where we have permanently lost some of that revenue due to holiday feature timing, but we expect we will be able to recognize the majority of these delayed shipments in our third-quarter results,” Mondelez said in a statement.

The company said it also expected “incremental one-time costs” in the second and third quarters as a result of the cyberattack, but that it was still on track to achieve its “organic growth outlook of at least 1% growth” for the full year.

The company had net revenues of $6.4 billion in the first quarter, according to a report in the Financial Times. Mondelez reported net revenues of approximately $26 billion in 2016.

It said it is still assessing the full financial effects of the attack.

The so-called Petya ransomware struck in more than 60 countries, affecting businesses and government organizations alike. The software blocks computers and demands payment in exchange for unlocking them.

Mondelez International is a world leader in biscuits, chocolate, gum, candy and powdered beverages, featuring brands such as Oreo and belVita biscuits; Cadbury Dairy Milk and Milka chocolate; and Trident gum.

CHICAGO — Cook County, Ill., retailers and consumers have at least another week before a new beverage tax begins after a Circuit Court judge again postponed a hearing in a lawsuit brought by the Illinois Retail Merchants Association seeking to block the tax.

A 1-cent-per-ounce tax on the sale of sweetened beverages was scheduled to go into effect July 1 but was delayed by a temporary restraining order a day before. The temporary restraining order was set to run through Wednesday, but a scheduled hearing was pushed back in the wake of a motion by the Cook County Department of Revenue to dismiss the lawsuit, according to a report in the Chicago Tribune.

“We believe it’s the county’s attempt to both try to bleed us and buy more time to try their PR campaign that the sky is falling,” Rob Karr, president of the Illinois Retail Merchants Association, said July 11, according to the report.

In the wake of Tuesday’s postponement, Cook County officials announced that more than 1,100 layoff notices could go out this month in the Chicago area, according to an Associated Press report. The county was counting on raising $67.5 million with the tax through Nov. 30 and had warned that cuts were possible without it.

ST. LOUIS — Retailers in St. Louis might feel some relief on their labor budget lines after state lawmakers reversed the city’s $10 minimum wage.

Missouri legislators approved a bill barring municipalities from setting their own hourly minimums, and Missouri Gov. Eric Greitens announced this month that he will neither sign nor veto the bill, allowing it to become law.

“It will kill jobs,” Greitens said of the hike, according to the St. Louis Post-Dispatch. “And despite what you hear from liberals, it will take money out of people’s pockets.”

The city enacted the increase in May, up from the state minimum of $7.70. The nullified bill was set to rise to $11 by January 2018. When the city returns to the state minimum on Aug. 28, retailers will have to decide whether they will continue to pay the higher wage or drop down to the official minimum.

Retailers have long been critical of the higher minimum wage since city aldermen approved it in 2015. The Missouri Retailers Association, along with the Missouri Restaurant Association, filed a lawsuit against the city, citing concerns that the law would hurt workers. David Overfelt, president of the Missouri Retailers Association, said businesses would leave the city, forcing workers to travel farther to find jobs, according to the Associated Press.

The city’s policy reversal comes on the heels of a study from the University of Washington reporting that Seattle’s low-wage workers lost out on $125 a month after setting out on a path toward a $15 minimum wage.

LAWRENCE, Kan. — Five years ago in Kansas, the first retailer began selling E15, the 15% ethanol blend.

That site—a Zarco 66 location in Lawrence, Kan., since rebranded to Zarco USA—formally debuted E15 in a grand opening on July 18, 2012. Five years later, nearly 900 stations in 29 states offer the ethanol blend, according to the Renewable Fuels Association (RFA), Washington, D.C. More than 1 billion miles have been driven on E15, by RFA estimates.

In June 2012, the Environmental Protection Agency (EPA) approved E15’s use in vehicle model years 2001 and newer, or almost 90% of the current vehicle fleet.

“Since the debut of E15 five years ago, consumers have enjoyed greater access to a fuel that typically costs less, reduces harmful tailpipe pollution, offers higher octane, and boasts a higher renewable content,” said RFA President and CEO Bob Dinneen, who credited the U.S. Department of Agriculture’s Biofuels Infrastructure Partnership Program and the Prime the Pump initiative for encouraging more retailers to add E15.

The fuel blend marks the fifth anniversary of its retail debut as Congress weighs legislation that would grant it a crucial Reid vapor pressure (Rvp) volatility waiver, which would allow it to be available for sale without restrictions from June 1 to Sept. 15 across the United States.