A Legacy Of Leadership

E-Z Mart's Sonja Yates Hubbard continues to break new ground, becoming the first woman inducted into the Convenience Store News Hall of Fame

Sonja Yates Hubbard has been told many times that ""she's got her daddy's genes." Her father, Jim Yates, founded Texarkana, Texas-based E-Z Mart Stores in 1970 and led the company until his untimely death in a 1998 plane crash. He served as the 1992-93 NACS chair, and was renowned as a visionary leader in the convenience industry.

To say Hubbard has followed in his footsteps would be an understatement. She assumed leadership of E-Z Mart upon his passing; became the first female chair of NACS in 2008-2009; and is well-known for being an industry champion and a trailblazer in everything she does.

"My father was so driven. He could get by on four to six hours of sleep, and was always doing something," she recalled. "I don't know whether I have OCD [obsessive-compulsive disorder] or what, but if I get behind something, I just can't let go. Sometimes, I think I speak up too much."

In November, Hubbard achieved yet another parallel with her late father, as she was inducted into the Convenience Store News Hall of Fame. Yates became a Hall of Famer in 1997.

In her signature trailblazing style, though, Hubbard went a step further by becoming the first female ever inducted into the Hall of Fame — an honor she described as both moving and bittersweet.

"It's [the Hall of Fame] one of those things that means so much specifically because it's crafted where you are selected by your peers," Hubbard told Convenience Store News. "To think that those people I've grown up with over the years — those I have admired and respected — actually thought enough of what I've done in the industry to vote for me, it's very touching."

At the same time, it is bittersweet because her father is not here to share the moment.

"I think how proud he would have been," she said. "I know he is happy, though."

While personally significant, Hubbard also hopes her Hall of Fame induction is a symbol of how far the convenience industry has come with respect to women in leadership roles. "This is where we need to be. I hope this says something for women and what their potential is in this industry. The opportunities are so huge; it's just trying to draw women to them," she noted.

For Hubbard, the decision to join the c-store industry and the family business came easily. She began working for the company as a teenager. After graduating college with a Bachelor of Science degree in business administration, she worked for two accounting firms and attained her license before returning to her roots at E-Z Mart. She worked her way up from assistant controller to CFO, and assumed the role of CEO following her father's death.

Hubbard said it's hard to believe it's been 11 years since she took the helm.

She still vividly remembers the conversation she and her father had the morning before his death. Among the topics they discussed were the need to finalize financing for a pending acquisition; a major change in vendors; and the next potential acquisition target for the chain.

They also spoke about Hubbard's position given that her father had entertained an offer to sell. It was always the intent that she would eventually step into the CEO role. "I look back now and am so glad we had that conversation, because I knew the direction we were headed," she said.

EMBRACING CHANGE

Since taking over, Hubbard has guarded the company her father built, while also being an agent of change. She once printed out a large sign that read, "Edison did not invent the light bulb through continuous improvement of the candle," and kept it up for an entire year.

"We can't keep doing what we've always done and just keep tweaking to make it better. Sometimes, you've just got to change," she said, admitting that she's needed to learn to be more patient and understanding of those who don't embrace change as easily as she does.

One of the most difficult, but pivotal changes E-Z Mart has gone through under Hubbard's leadership is a "resizing." From 2001 through 2004, the c-store retailer sold or closed more than 200 underperforming locations after finding itself highly leveraged while facing new, big-box competition and compressed margins in a down economy.

"My dad didn't give up on anything. If we bought a store, by God, we were going to make it work. He would say 'if you're not making money, you're doing it wrong.' But with all the things we were facing, there were some stores we just had to give up on," Hubbard said.

Putting her "accounting hat" on, she and her team took the emotion out of the decision and looked solely at the numbers. What they found was a third of the stores were dragging the rest down.

"While it hurts your ego, I'm proud to say we were at 525 stores and we're at 302 today," she said. "The resizing has absolutely contributed to our success more than anything."

And although they didn't know it then, shedding those stores positioned E-Z Mart to be able to weather the recent recession. In fact, Hubbard said the company has had some of the most profitable years in its history in the face of these most difficult economic times.

This October, E-Z Mart celebrated its 40^th anniversary. After years of disposing non-producing assets and cutting its debt substantially, the company is back to growing, but the focus now is on increasing sales and profit dollars — not store count.

"We're asking ourselves, 'What's the good stuff? What's the stuff we can grow?'" Hubbard explained. "We're on a plan to make the best better."

One of the unique characteristics of E-Z Mart is it operates stores predominately in rural areas. This can sometimes be problematic as it means volumes aren't as high as the industry's top quartile stores. The upside of operating in rural markets, though, is the stores are ingrained in their communities. Customers don't think about going into the E-Z Mart store, rather they think about visiting (store manager) Reba's E-Z Mart store or Tony's E-Z Mart store, according to Hubbard.

To capitalize on this personal connection, the company is putting a focus on individualizing its stores to give each its own personality. At the recent NACS Show, Hubbard said her team spent a lot of time looking at software they can use to digest the data they're already capturing and use it more effectively to engage shoppers.

In addition to personalizing the locations, E-Z Mart is making a big push to raze and rebuild stores with a more modern flair. "Our 40^th anniversary made us look at some of our facilities, and we realized we have some great dirt, but our stores are dated," the CEO said.

The raze-and-rebuilds are ushering in consumer-friendly features such as:

• Easier access in and out of the parking lot;
• A more open layout in the front of the store;
• More cooler doors;
• Addition of a beer cave (where space is available); and
• Touch-free airport-style bathrooms with multiple stalls.

The new stores also dedicate more space to food-service — a category where E-Z Mart has struggled to find the right offering. The chain has been most successful with its fried foods program, but Hubbard said they've learned the same offering will not work for every market.

"Some say foodservice is a silver bullet, but at times, it's just been a bullet for us. The challenge for larger retailers is one thing doesn't work in all locations, and we tended to historically want to paintbrush," she said. "We're still trying to figure out the foodservice thing, but it's an area we're not giving up on. We keep having little successes by finding niches."

While the reimaging will continue indefinitely, Hubbard said there are still some locations not performing on par with the rest. To address this, E-Z Mart is getting ready to transition a group of these sites to dealer operations. The new program is almost ready for rollout.

"Independent operators can sometimes do a better job operating a store than a chain," she noted.

ALL FOR ONE

Like many companies that thrive on change, E-Z Mart benefits from having a strong executive management team that enables such transformation. The average tenure among its team is an impressive 18 years of service, with the newest member clocking in at 12 years.

Being a family business, the executive management team includes Hubbard's younger sister, Stacy Yates, who serves as CFO, and Hubbard's husband, Bob Hubbard, who is president and COO. The three family members each have very different personalities that fit their roles perfectly.

"Bob loves the stores and the operations side. Stacy is the perfect accountant because she is obsessive about accuracy and promptness. And I'm the one who loves people and thrives on change. I bring the higher view; I'm always looking at where we're going next," Hubbard said.

She described the company's overall organizational structure as "a hierarchal team."

"You have to have somebody who takes ultimate responsibility when answering for certain things. But at the same time, we've changed over the years — in part because I'm a woman and have a kinder, gentler way of doing things, and in part because there's a generational difference — to where my mid- to upper-management teams now cross over," she explained.

When she first became CEO, there were often turf wars over projects. Under her leadership, the mantra is now "all for one." If a human resources employee walks into a store and sees that location is out of gas, they're expected to make a call to get the pumps back in business.

"You don't hear 'it's not my job,'" Hubbard said.

And when she personally goes out to tour the stores — which she would like to do more frequently — the first thing she asks store personnel is: "What can I do for you?"

"Our job is not just to inspect and critique, but to pitch in where it's needed," she explained.

Hubbard is constantly asking what more she can do for the convenience industry as a whole, too. In addition to serving on NACS' 2010-2011 executive committee, the former chairwoman is leading a committee seeking ways c-stores can better promote health and nutrition.

"Initially, I was offended by [First Lady] Michelle Obama's comment that convenience stores don't have anything healthy to offer, almost throwing us aside," she said. "It's true we don't do a lot of fresh fruits and vegetables because they don't sell and there are challenges with distribution and waste. But then I stopped and thought what can we do to change that?"

Within her own chain, Hubbard said her team took two stores with heavy food stamp use and reset them to include healthier fare such as fresh and frozen fruits and vegetables. While still in the early stages, she said they're seeing some progress. For instance, one item selling well is a package of frozen, pre-cooked chicken breasts, which alone is a nearly $10 ring.

Hubbard knows things won't change overnight, but believes the opportunity is there to make c-stores a more nutritious place for consumers to shop.

"The youth population is becoming more aware of nutrition, so I think we're going to move to a healthier eating population, and there will be that demand [in the future]," she said. "Our industry should be part of that evolution, and at the forefront."

With all she wants to accomplish for E-Z Mart and the industry, Hubbard shows no signs of slowing down — and that's exactly the kind of environment in which she shines.

"I love when there's a lot going on," she said. "My sister always laughs and says I'll never be happy, and she's probably right. There's always more to do."

For comments, please contact Linda Lisanti, Senior Editor, at [email protected].

"Our job is not just to inspect and critique, but to pitch in where it's needed." — Sonja Hubbard