Stations pump up the retail
Convenience stores add goods, services to entice customers to buy more than gas
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.”