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Past Recessions Provide Lessons

NEW YORK -- The mood in August 1994, as the nation was pulling out of a recession, is one the nation is eagerly awaiting. There was improved financial health, with chains planning expansions and upgrades. A page one article in the Aug. 1, issue that year warned, though, that c-stores should heed the lessons they learned in that recession and continue to apply those recessionary strategies of cost-cutting and budget controls.

"We might be a nickel away from financial disaster," consultant Dick Meyer, then president of Waunakee, Wis.-based Meyer & Associates, said at the time. "We have to have our companies positioned as if we were not enjoying the profits that perhaps are coming from more favorable gas margins."

Meyer recommended keeping a stiff hand on gas and cigarette inventories, and reducing products in stock.

Maggie LaCasse, then store operations controller for the 519-unit Wawa convenience store chain, acknowledged the upside to the recession. "The recession forced us to look at some things. Without it, there would have been no need o pressure to look at them," she said.

LaCassee recommended "cutting the fat by doing things smart," and gave examples of Wawa's rule of consolidating non-critical maintenance projects together for one contractor, providing all things are completed at once with less waste. She also suggested retailers speak to their vendors about consolidating scheduling.

She also said the company cut back on employee recruitment efforts in newspapers and other media in favor of a referral process by existing Wawa store employees.

Meanwhile, at Rutter's Farm Stores, a then 50-unit chain, the retailer aimed to cut overtime costs and inventory shrink by investing in technology and automation.

And when it comes to establishing budgets, Meyer of Meyer & Associates recommended planning in a "recessionary state of mind."

"Why is it that cost cutting can be accomplished effectively in rough times, yet we don’t so the same during good times?" he asked. "Review all costs from the ground up at budgeting time. Look more closely at excess labor hours at one store compared to another with the same volume. Reduce administrative costs if store count has been reduced."
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