Quantum Newsprint hosted by Bill Sjoblom

What's New in Your Stores...Your Feedback

I got several great responses for new or interesting items in your c-stores:

From Chad in Roanoke:

Forget flavored waters with vitamins pre-mixed in.   It has been proven that the longer vitamins remain dissolved in a beverage, the less effective they become, over time, for the consumer. 

Now, introducing Karma Water, the water with fresh vitamins that you dispense.   Inside the cap of each bottle are 12 essential, and fresh, vitamins.  A push down of the unique, specialized cap and these vitamins are released into the water.  Just shake and enjoy!   With 6 tasty flavors,  it's sure to have something everyone would enjoy.

I found this today at a Sheetz in Trinity, NC. Thought it was a pretty cool idea!

Check out the advertising video via YouTube here: Karma Water

 From Laura in Tucson:

2 kinds of suckers one with a scorpion and the other one is tequila flavored with a worm

 

From Bonnie in Binghamton:

Mmmm...deviled eggs!  That's what I thought when I first saw these in my Extra Mart.  You may or may not be disappointed when you bite into one though...they are actually made of white chocolate!

What's New In Your Stores?

Last week I visited a Byrne Dairy location in Syracuse, New York and I was surprised by all the new and interesting products I found.

Did you know you can still buy milk in glass jugs?  And it is 10 cents cheaper than plastic!  I also found some wine ice cream - check it out at Dizzy Scoop Wine Ice Cream.  Byrne Dairy also believes in flavored coffee.  They had 18 carafes of coffee featuring the following flavors in addition to regular and decaf: Blueberry, Dubliner Creme, Chocolate Raspberry, Sweet Treat, French Vanilla, Hazelnut Decaf and Regular, French Roast, and Colombian!

You can also pick up a half gallon of pickled eggs or pickled sausage for $12.99.  But my favorite of all was the 5 pound gummy bear (see picture below).  For those of you watching your calories, that's 51 servings @ 120 calories per serving = 6,120 calories!

I am curious.  What interesting products have you found in your stores recently? 

A Subway gift card to the best three products!

Joe Schmo to Lambo...The Rest of the Story

Maverik Convenience Stores based in Salt Lake City, UT has built a chain of about 200 locations around an adventure theme.  They are well known for innovative and edgy advertising and marketing.  Last year they held a contest "Joe Schmo to Lambo" that raised money for charity by giving away a Lamborghini Murcielago.  It's a $300,000 sports car! 

Well a small town truck driver from Santaquin, UT won the contest and while giving joy rides to friends he wrecked it six hours later!  Ahh, well...at least he was required to have insurance on the vehicle when he picked it up.

Where Did You Buy That Beverage?

This month's CSP Magazine includes an article with some interesting data about the beverage category in convenience stores titled A Six-Pack of Insights.  It is generally accepted that beverages are the biggest draw for getting customers into a c-store but did you know that 58% of c-store shoppers report buying a non-alcoholic beverage the last time they visited?

Women tend to visit a c-store to buy bottled water, iced tea and juice.  Men purchase beer, energy drinks and sports drinks.  And the vast majority of shoppers decide what beverage type, brand, flavor and size they will buy before they enter the store.  So much for all those marketing and promo displays!

The cities that favor Coke are Los Angeles, Atlanta, Houston, Washington DC and Miami.  More people prefer Pepsi in El Paso, Bakersfield, Baton Rouge, Memphis and Fresno.  Based on the size of the cities mentioned it is no surprise that Coke is winning the cola war!

More energy drinks are sold through c-stores than any other retail channel.  And energy drink consumers are very brand loyal.  If you don't stock their brand they generally don't buy an alternative.  Maybe that's why c-stores carry so many different brands.

And finally, 19% of shoppers think of c-stores as a place to buy wine...thats the same percentage who think of c-stores as a place to buy milk.  Surprising?

The Roll Your Own Debate

Even if you are not a smoker you probably have heard about roll-your-own (RYO) cigarette machines manufactured and rented to retailers by a Cincinnati based company.  During 2008, the first year the machine was offered, only 10 of them were in operation.  There are now 1700 machines and a huge controversy has erupted. 

Why?

In 2009 the SCHIP taxes on roll your own tobacco resulted in a 2400% increase from $1.01 per pound to $24.78 per pound.  Meanwhile, pipe tobacco merely doubled from $1.09 to $2.83 per pound.  This resulted in some tobacco manufacturers allegedly labeling RYO tobacco as pipe tobacco - thus avoiding the huge tax increases. 

There is also an effort by some states to classify owners of RYO machines as "manufacturers" so they would then be subject to manufacturing regulations.

What's at stake?

In Pennsylvania a RYO carton of cigarettes from one of these machines using tobacco labeled as "pipe tobacco" might cost $18 a carton.  A carton using cigarette tobacco would cost about $27 and the lowest generic manufactured cigarette is roughly $55.  Since April 2009 it is estimated that the federal treasury has lost more than 1 billion in taxes and expects to lose more than 1 billion in 2012 alone!

Most convenience chains have resisted offering RYO cigarette machines because of the uncertainty of the governments response to this problem.  Some speculate that the government could demand retroactive payment for taxes which could be a huge problem because the tax was never collected from the consumer. 

Have you seen or heard about any of these RYO cigarette machines?  What do you think?

A "Must Read" Article on Item Level

The article "Looking for 3 Million?" in this month's CSP is a must read for all QS people.  It is well written and loaded with facts and examples.  It makes many of the points that we have been making for years:

• Used correctly, ILA's reduce inventory levels.  Flash Foods - a 172 store chain took $3 million out of their inventory.  That's more than $17,000 per location.
• Chains over-report their adoption of ILA.  While surveys regularly report 38-45% of c-store chains using IL inventory, PDI reports that only 5-10% of it's customer base is at true item level. 
• Benefits of item level:
  • Inventory cuts of 10-25%
  • Sales increases of 1-3%
  • Out of stocks cut by 60-90% to less than 1%.  Typical rate is 7% for c-stores.
  • Return rates drop by 66% with more focus on expiration dates
  • Spoilage reduction of 30-50%
  • Elimination of markup and markdown tracking
  • Reduced register adjustments and chance of abuse
  • Electronic auto reordering
• Challenges of item level:
  • More complicated auditing or counting process
  • The need for a detail-oriented culture
  • Vendors unable to give timely invoices electronically
  • Operational "buy-in"
  • Time sensitive data entry that if not done can throw off reports, invoices and orders

 The article also makes the point that adopting IL is not an easy thing and that it is a multi-year process.  The greatest barrier is the "cultural shifts that need to take place".

The result is better decisions. 

Do You Love Slushies?

What do Play-Doh, super glue, the slinky, Velcro and slush drinks have in common?  They were all invented, more or less, by accident.  Here is some more interesting facts from NACS Magazine about The Slushie Success Story.

How were frozen carbonated beverages first invented?  A broken soda fountain at a Dairy Queen in Coffeyville, Kansas was the catalyst one day in the late 1950's.  The owner transferred his room temperature soft drink bottles to the freezer so he could still serve his customers cold drinks.  Instead he ended up creating slush beverages his customers loved!

• Icee sells 500 million drinks a year
• The first flavor ever sold was Cola
• 7-Eleven has sold more than 6 billion Slurpees since 1965
• The Slurpee capital of the world is Winnipeg in Canada.  In the dead of winter at minus 20 degrees, MACS convenience stores still sells more slushies than they do coffee!
• Icee's top-selling flavors are cherry, blue raspberry and coke

File This in the Absurd Category

NACS Magazine reported in the Decmeber Issue that a group of California consumers filed a lawsuit against BP, Chevron, Conoco-Phillips, ExxonMobil, Shell and Valero alleging that they were overcharging customers who buy premium fuel.  The lawsuit stated that the design of some gas dispensers is flawed - when they purchased premium fuel they can receive up to one third of a gallon of regular or mid-grade fuel if the previous customer did not buy premium.  The problem is that with single-nozzle pumps, there is a residue of gas in the pump and nozzle.

Fortunately the Appeals Court sided with the refiners.  They concluded that it is not reasonable to infer that oil companies have committed any misconduct since they cannot alter their dispenser designs, price computation mechanisms or octane disclosures "without running afoul of various legal requirements in this heavily regulated area."

I wonder why no one complained that they were getting three tenths of a gallon of premium fuel when they purchased regular after the previous customer bought premium??