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Archive for Monday, April 19, 2010

Stations pump up the retail

Convenience stores add goods, services to entice customers to buy more than gas

Kyle Griggs, of Lawrence, pumps gas while talking to his friend, Bione Dudley, of St. Louis, at the BP gas station at 23rd and Louisiana streets.

Kyle Griggs, of Lawrence, pumps gas while talking to his friend, Bione Dudley, of St. Louis, at the BP gas station at 23rd and Louisiana streets.

April 19, 2010

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Area gas stations trying to bring customers back inside

A local Zarco station is installing pizza, sandwich and coffee counters to help boost its indoor sales. Enlarge video

Area fuel vendors are sprucing up their in-store features and offerings to lure folks inside their doors, rather than leave consumers to passively pay at the pump.

And with inside sales serving as the main source — sometimes the only source — for company profits, the stakes couldn’t be higher.

“There are days where that we’re selling fuel at or below cost,” said Scott Zaremba, president of Zarco 66 Earth-Friendly Fuels, which has eight stores in eastern Kansas, including four in Lawrence. “You can’t keep the doors open if you’re selling below cost, so we need to have other products in our locations that customers are asking for.”

The days of convenience stores relying on bags of chips and bottles of pop to draw customers inside their doors are giving way to a new era of on-the-go offerings.

A convenience-store owner in Manhattan is converting his two shops into mini grocery stores, with some of the same meats, toilet paper and baked goods you’d find at Dillons, Hy-Vee, Wal-Mart or Target. Other operators own and manage self-storage units behind their shops, to secure items for customers who may stop by often.

While store owners were able to make a living solely on fuel sales as recently as a decade ago, today’s intense competition — particularly from the aforementioned “big-box” retailers and grocers — has turned gasoline into a losing proposition for some, with credit-card fees draining bottom lines by fractions of cents per gallon.

‘Wave of the future’

“I don’t know if it’s a wave of the future, but for people who want to remain a small business that stays in business, they’ll need to find options other than just selling gasoline,” said Tom Palace, executive director of the Petroleum Marketers and Convenience Store Association of Kansas, which represents more than 1,200 convenience stores. “You need these little nuances, these little differences, that say, ‘I’m different than you.’ Those are the things that make all the difference.”

Sammi Sangam, owner of Speedway Shell, 1733 Mass., is bolstering his standing by serving homemade Indian food. From 11 a.m. to 8 p.m. each weekday, shoppers can fill their tank, then step inside to pick up already-heated packages of curried chicken and rice pilaf.

“We call it ‘Curry in a Hurry,’ ” Sangam said. “When you’re in a hurry, buy some curry.”

Now, with the fresh food, he’s already seeing an uptick in his in-store sales — which is significant, he said, given that his pump prices typically are higher than other stations in town. He assures customers that he sells “pure” gasoline, not fuels blended with what’s becoming industry-standard ethanol.

The Indian food is the latest differentiation.

“Nobody makes money on gas; it’s the inside sales that really help,” he said. “There has to be something unique to your store: discount offers, or something not sold by somebody else. You need something unique.”

Zaremba remains on a constant search for such separation. He opened his Earth-Friendly Fuels station in February 2008 at Ninth and Iowa streets, looking to steer away from a reliance on foreign oil and toward domestic supplies such as ethanol.

This week, he started preparing the “premium” settings on his pumps for a switch over to an E85 blend, which is 85 percent ethanol. The high-octane premium had represented only 5 percent of his fuel sales, which helped make the decision easier.

‘Oasis’ on way

But the biggest shift is coming to one of his busiest stores, at 1548 E. 23rd St.: a new Sandbar Subs shop, an indoor Scooter’s Coffeehouse and a Godfather’s Pizza, set to open within six weeks.

Such offerings soon will spread to all of his locations in one form or another, featuring fresh-made foods and beverages to feed the desires of customers looking for quality and convenience, Zaremba said.

Eighty percent of his customers pay at the pump, and the goal is to draw them inside to what will be known as the “Zarco 66 Oasis.”

“The world is changing … and now we’re evolving,” Zaremba said. “We’re moving into concierge and guest services, and that’s what we’re about: Welcome to paradise.”

Comments

Steve Jacob 4 years, 5 months ago

Everybody is playing catch-up to Quick Trip.

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Thats_messed_up 4 years, 5 months ago

Please Lawrence city Kommission in your all-knowing-protectionist benevolence allow a Quiktrip to be built at Iowa and that half-a-highway SLT. I know it would be waaaay too convenient for Lawrence regulations and allow customers to avoid 3 or 4 redundant stoplights thereby speeding their commute to work but please just this one exception to the approved list of businesses!

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labmonkey 4 years, 5 months ago

I have also seen stoplights put up just for QT's....

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hail2oldku 4 years, 5 months ago

I realize that it all started because of drive-offs, but as long as they are going to require me to swipe my credit card at the pump instead of letting me do it inside after I fill-up they won't get any additional in store purchases. I'm too lazy to walk in and pay for something else after I've already paid for the item that I really came for in the first place.

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scopi_guy 4 years, 5 months ago

Yep, me too. Plus, grocery type items in places like that cost at least twice what they do in a regular grocery store.

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catbird 4 years, 5 months ago

Why expand? They could downsize to a booth with candy and cigarettes...lose the restrooms and a lot of stuff that creates the overhead. Too many businesses try to do too many things.

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ksjayhawk74 4 years, 5 months ago

Have you ever had to go to a gas station for a "meal" because everything else is close, like on Holidays? It's horrible, there is usually no real food to be had.

This always happens to me when I'm driving to or from my Parent's house during Christmas/Thanksgiving/New Years and EVERYTHING is closed except for gas stations.

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parrothead8 4 years, 5 months ago

I remember when they used to pump the gas for you, and even check the oil while they were at it. Then they put in self-serve pumps, turned loose the folks who use to work the pumps, and started making us do the work. Now they want us to come inside and buy more stuff. I guess those self-serve pumps really paid off.

You reap what you sow. Maybe I'd come inside if there was still someone filling up my car and checking my oil, but I've got things to do. I've been conditioned by years of quickly getting in and out of the gas station, and there is no incentive for me to come inside and get things I don't need.

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ksjayhawk74 4 years, 5 months ago

You should move to New Jersey, where it's a law that a gas station employee has to pump your gas.

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parrothead8 4 years, 5 months ago

I wouldn't move to New Jersey if they paid for my gas.

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FarneyMac 4 years, 5 months ago

Well then, move to Oregon. Same stupid law.

I can't believe there is someone actually advocating for a return to full-serve gas stations.

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Eric Holscher 4 years, 5 months ago

Check out Sheetz or Wawa on the East Coast to see how this is done correctly.

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anagram 4 years, 5 months ago

Check out the Phillips 66 at 3300 W. 6th. There's a whole Italian restaurant in there! (Basil Leaf Cafe). I ate there the other day, and it's pretty good. Will have to check out the curry in a hurry.

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KawHawk 4 years, 5 months ago

Never did understand how the Speedway Shell on Mass made any money, given that the gas station on the corner of 19th and mass, a few hundred feet away, is usually cheaper by at least 5-10 cents per gallon. Guess some people are stupid enough to pay more when they don't have to.

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persevering_gal 4 years, 5 months ago

I wish more gas stations had the option of purchasing a car wash along with your purchase of gas. Healthier food wouldn't be that bad of an option either.

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RockChalk_88 4 years, 5 months ago

The indian food at the Shell station is AMAZING! its affordable and i can even have leftovers. and Sammy and his wife are wonderful people! Even if you dont get gas at their station do try out the food!

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