Issue link: http://read.dmtmag.com/i/414216
12 Oil Prophets Never before have so many things been changing so rapidly. The convenience store industry is a good example. Technology is changing at light-speed, and new competitors are entering the competitive landscape like never before. The most important question for any company is this: Are we changing as fast as the world around us? The only thing that can be safely predicted is that sometime soon your business will be challenged to change in ways for which it has no precedent. Your company will either adapt or falter. Capacity to adapt and adapt quickly is extremely important these days, and therein lays the problem: Most companies were never built to be adaptable. Adaptability requires a willingness to occasionally abandon established routines and norms, and in most companies there are precious few incentives to do so. That's why change tends to come in only two varieties: the trivial and the traumatic. If you find yourself behind the change curve, chances are you're already dead in the water; your obituary just hasn't been written yet! Declining Fuel & Tobacco Dollars The biggest issue facing convenience store operators today is the decline in fuel and tobacco sales and margin. What's your plan to replace this decline in gross profit dollars? If you're waiting for a miraculous turnaround, you're going to have a long wait. Welcome to your new reality. If you believe foodservice is the answer, but you've yet to jump into foodservice with both feet and establish yourself, then the process will take too long before you can turn the tide and replace current lost gross profit dollars. That's not to suggest you should ignore foodservice -- certainly not. Foodservice not only offers great margins (upwards of 50 percent), but more importantly, it's become a price of entry; the ante to get into the game. If you're not into foodservice, then you're at a competitive disadvantage. Quick-Strike Strategy To help offset declining fuel and tobacco gross profit dollars, here's a quick four-point strategy that you can immediately implement: OTP: • Other tobacco products (OTP), such as electronic cigarettes and vapors, are rapidly growing both in consumer acceptance and sales. These products have solid gross profit margins (GPM). If you don't have an OTP strategy in terms of pricing, merchandising and promotion, now is the time to develop one. Foodservice margins: • If you currently have a foodservice program (including fountain and coffee programs), make sure you're getting a good GPM. The best companies can generate a solid 50 percent to 55 percent GPM. Keep in mind, phets are precious few so. That's why come in only to get into the game. If you re not into foodservice, then you're at a competitive disadvantage. Are You Keeping Up With Change? Terry McKenna, Convenience Store Coaches & Employee Performance Strategies Inc.