Convenience Industry Leaders Cite Need For Reinvention

MAPCO and Hess executives take center stage at NACS Leadership Forum

Top executives for two of the largest convenience store chains in the nation presented their visions of the c-store industry's future during the 2013 NACS Leadership Forum, an invite-only event held Feb. 11-13 at the Fontainebleau Miami Beach.

Igal Zamir, president of Tennessee-based MAPCO Express, and Chris Baldwin, senior vice president of New Jersey-based Hess Corp., both stressed the need for change if c-stores are to remain successful in today's rapidly changing business and technology landscape.

Zamir, whose company operates 372 c-stores in seven states, said the industry faces numerous challenges such as channel blurring, the reinvention of drugstores as a convenience destination for women, flat fuel consumption and declining cigarette profits.

MAPCO has been busy over the past few years, having remodeled 184 stores and divested 111. New stores are being built to its "mega store" model, which has had "a huge positive impact on sales," said Zamir. The company also has made a big commitment to private label.

Zamir still sees challenges ahead for MAPCO and the entire industry. "The reality is that the trends are going against us. We still don't see the customer we want in our stores," he said, referencing that c-store customers still skew more male and lower income than other retail channels.

Meanwhile, Baldwin focused his presentation on three big changes that c-stores must cope with: how we eat, how we get information, and how we move. Hess, which operates 1,300 sites mostly along the Interstate 95 corridor on the East Coast, is noted for value-priced fuel and quality real estate. It's also one of the few oil companies with retail stores that are mostly company operated (93 percent).

In regards to how we eat, Baldwin noted that people don't eat three square meals a day anymore. "Snacking has become a fourth meal," he said. Food consumed by Americans on the run has also doubled in recent years, according to Baldwin, and "we are eating more — more calories, more fat and more snacks." The implications this has on the nation's obesity problem are enormous, and c-stores "need to be part of the solution" to this problem.

On the topic of how we get information, Baldwin pointed to the fact that it took 38 years for radio to reach 50 million listeners, and 13 years for television to hit 50 million viewers. For the Internet, it took just four years. For Facebook, two years. And for "Angry Birds," just 35 days.

Finally, addressing how we move, Baldwin said gasoline consumption in the United States has peaked and will continue to decline as the fuel efficiency of the American auto fleet gets better and car ownership lessens among the younger generations. This means c-stores must figure out how to stay relevant as trips to the pumps decline.

"These are disruptive changes to our business," he concluded.

2013 NACS Leadership Forum

Feb. 11-13, 2013

Fontainebleau Miami Beach