Cumberland Farms Committed to Singular Focus
FRAMINGHAM, Mass. — Leading the family business is not something Cumberland Farms Inc. CEO Ari Haseotes takes lightly as the job comes with its own unique challenges. Foremost is that there is more at stake than just the bottom line.
Questions he consistently finds himself asking include: Is this an investment that, over the long term, will be a good one for the family? Are we making the right decision now for our people? Are we robbing the future to pay for something in the present?
"It's quite different here. The decisions we make we live with for many, many decades generally. There is a pressure that comes with really making sure we've done our homework; that we've been very diligent and vigilant with things we've looked at; that we've taken a long-term view on the investments and the decisions we make, all in the mindset that we're most interested in building a business that is as strong as it could be over the long term," said Haseotes.
The long-term lens certainly came into play when Cumberland Farms recently decided to sell off Gulf Oil LP to Chelsea Petroleum Products Holdings LLC, an affiliate of ArcLight Capital Partners. The transaction was completed in December. The move was driven by Cumberland Farms’ desire to return to its legacy of pure-play retail.
"It was simply a matter of where do we think we have the greatest opportunities and where do we think our strengths can be best leveraged. Where are our family values and cultures most consistent with? All of that pointed to our retail business being the business we wanted to put as much focus and attention on [as possible] — not just capital, but management and overall corporate focus. Really, being the best we could be as a retail company," Haseotes told Convenience Store News.
For his commitment to Cumberland Farms and to the convenience channel as a whole, he is being honored as the 2016 CSNews Retailer Executive of the Year. This award, now in its third year, recognizes a retailer executive who exemplifies leadership, business acumen, dedication to the industry, and commitment to community service. Winners are chosen by a blue-chip panel of industry leaders.
MOVING IN THE RIGHT DIRECTION
When combined with the Gulf Oil organization, Cumberland Farms had been running a wholesale marketing business and a terminal business. As much as the company liked those businesses, "it wasn't clear to us that we could take our retail business to the heights that we would like to take it to, with that much of a diversification of our own focus," Haseotes explained.
While Cumberland Farms' separation from the Gulf Oil business is still relatively new, he already sees early signs indicating the decision is moving the retailer in the right direction. Notably, its much-sought-after focus on retail is becoming a reality.
"My time, the time of our board, and the time of our senior leadership team is now spent solely and exclusively focused on making our retail business as good as it can be," he said. "That's been the biggest and most profound change: our ability to gain a singular focus and make sure all elements of our strategy, our values, our culture, our mission and our vision are fully aligned around that singular retail focus."
A significant piece of the retail focus is foodservice. Like many other retailers in the convenience channel, Cumberland Farms has recognized the opportunities that fresh food and beverages present, and the chain began intensive efforts to enhance its fresh food and beverage offer roughly a decade ago. Now, thanks to the company's singular focus on retail, foodservice has moved even more to the forefront.
Part and parcel to this shift are other initiatives like the company's store remodeling program and new-build plan. According to Haseotes, these investments are going well. Guests are responding positively, and fresh food and beverage sales are performing well.
“…We invested many millions of dollars of our resources into deploying that new format and we've iterated numerous times since then, making it increasingly more compelling for our guests in the stores and making it more efficient for us to operate," the CEO said.
Plans call for Cumberland Farms to continue on this path forward, building even more new stores on an annual basis, as well as continuing its investment in remodels and rebuilds of existing stores.
For more on Haseotes and how he is protecting and enhancing the Cumberland Farms legacy, look in the September issue of Convenience Store News.