QT Cuts to the Chase

When Burt Holmes and Chester Cadieux opened the first QuikTrip store on Sept. 25, 1958 in Tulsa, Okla., they launched the beginning of one of the most astounding success stories not just in convenience retailing, but in business.

Today, QT, as it’s known to many of its customers, is the nation’s eighth largest convenience store chain in company-operated units, with more than 700 stores generating more than $11 billion in revenue across 11 states.

Over its 57-year history, QT was one of the first to operate all its stores 24 hours a day, became a leading seller of motor fuels in all the markets in which it operates, and is now becoming a major factor in improving the perception of fresh foodservice in the c-store industry.

QT has always been one of the leading innovators in the c-store industry, whether it was leading the industry in growing the fuel business, setting an example for how a progressive company should empower its associates, pioneering the next generation of convenience store design, or its latest efforts to help improve the perception of foodservice quality in the c-store industry.

This year, QT earned a spot on Convenience Store News’ Top 20 Growth Chains list for the fourth year in a row; was named to Fortune magazine’s list of the 100 Best Companies To Work For, for the 12th straight year; achieved a nod on Fortune magazine’s inaugural list of the 100 Best Workplaces for Millennials; and rolled out its highly-praised, fresh, made-to-order food and beverage concept — QT Kitchens — to more than 90 percent of its stores nationwide.

Also this year, CSNews’ editors have selected QuikTrip Corp. as the 2015 Retailer Innovator of the Year. Previous winners of this award were Sheetz Inc. in 2014, Wawa Inc. in 2013 and RaceTrac Petroleum Inc. in 2012.

“I personally think that it [innovation] is an overused term,” said Chet Cadieux, son of company founder Chester, who became president of the company in 2002. “Most changes that I see, including at QT, are evolutionary more than they are innovative. By that I mean, getting better every day or constant improvement. Whatever you want to call that constant improvement process, I think it is critical to a company’s survival.”

In an exclusive interview with CSNews, Cadieux said he feels true innovation, as in actually inventing something new, is rare and not essential to a company’s survival. “I don’t necessarily think QT is good at literally inventing things. There are certainly companies that are a lot better at it than us. However, we are, I think, really good at working toward perfecting things that already exist.”

Innovation may be in the eye of the beholder, but if the measure of a successful company is its ability to adapt to a changing marketplace and to foster a culture of constant improvement, QT fits the bill.

Of all the company’s accomplishments this year, Cadieux said he is most proud of having installed the QT Kitchens concept in almost every store. “Of course, that necessitated us hiring a lot of people to run those kitchens, which created a 30-percent increase in employee count companywide,” he said. QT has more than 18,600 employees. “And, of course, we had to train all those newbies as well as our existing employees on how to run those kitchens. To get all of that done in just one year was a real biggie for us.”

You’d think such growth and training needs would put stress on the company’s resources, but QT continues to rank at the top of “Best Places to Work” lists, even nabbing a spot on Fortune magazine’s first Best Millennial Workplaces list.

“Everything we do is based upon helping our employees grow and succeed with the company,” said Cadieux. “We’re very proud that year in and year out, our employees place QuikTrip as one of the best places to work. It’s not just a corporate culture to us — it is QuikTrip. We hire people that we believe will fit our culture and belief. They are overachievers, highly competitive, and are in perpetual motion performing multiple tasks consistently day in and day out, all while wearing a smile. I think they are amazing.”

HAPPY EMPLOYEES, HAPPY CUSTOMERS

By taking care of its employees, those employees help the retailer focus better on the needs of its customers. “Our employees are really great listeners,” said Cadieux. “The customer will tell you which products they would like to see and what their expectations are.”

According to CSNews’ 2015 Top 20 Growth Chains report (published in the March issue), QT grew its store count from 678 stores in 2013 to 711 in 2014, an increase of 33 net new units. Growth has been organic and across all of its existing markets, with the newest states, North and South Carolina, seeing the most new store activity. The retailer expected this year’s growth pace to be about the same as last year’s.

“We have experienced tremendous new store count the last couple of years, which has been great,” noted Cadieux, adding the retailer doesn’t comment on future expansion plans. He did, however, acknowledge that “the Carolinas have been absolutely fantastic. We have been really well received by the customers.”

Importantly, Cadieux believes QT has “learned a lot [from its Carolinas expansion], which is critical because learning is how you get better. Further, we reaffirmed just how hard our people work and how dedicated they are to being the best.”

In addition to the new store growth, QT has been busy refurbishing and retrofitting its existing stores to accommodate the full-service QT Kitchens concept. “We have been fortunate in that we have retrofitted about 93 percent of our existing stores with our full service QT Kitchens and we were able to do it without really affecting our customer flow.

“It’s no secret, we are in the process of doing a lot of relocations and scrapes/rebuilds, making way for our new Gen 3 model,” Cadieux added.

The creation of QT Kitchens in 2006 is an example of how good QT is at taking an idea and perfecting it. The concept originated because two of the industry’s biggest categories — gasoline and cigarettes — are no longer growth categories, and instead are declining.

“As such, we needed to find something to replace them. We always thought we were pretty good at selling gasoline and convenience store items. Over time, our goal is to be as good at selling fresh food as we are at other items,” Cadieux noted.

According to one foodservice expert, QT innovated its operational systems so that it could use made-to-order customer service as the basis for its new food and drink products. This new offer includes made-to-order breakfast pizza, pizza for lunch and dinner, toasted sandwiches, flatbread sandwiches, kolaches and fresh baked pretzels, among other items. Coinciding with the chainwide rollout, QT has clearly taken its fresh food business to a new and higher level.

Cadieux, whose father Chester was the first inductee into the CSNews Hall of Fame in 1987, laughs when questioned about the industry’s three biggest challenges in the years ahead. “Boy, only three biggest challenges? Channel blurring, declines in demand for motor fuels, and declines in cigarette consumption. Any of those three should be enough to keep everyone in our industry awake at night. All three combined is just scary.”

For the future, Cadieux admits he “has no idea” what c-stores will look like in 2030 or 2040, but he promises QT will “be working really hard every day during the interim years to figure it out.”

The retailer is never satisfied with the status quo. “We believe there is always a better way to do things and we believe to remain successful that we simply have to get better every day. Sometimes we stay ahead and sometimes we fall behind … but we’re always working at it,” he said.

And this year, QT’s pursuit of constant improvement is as good a definition of innovation as any other.

Innovation may be in the eye of the beholder, but if the measure of a successful company is its ability to adapt to a changing marketplace and to foster a culture of constant improvement, Qt fits the bill.