A Brief History of Convenience Stores

Some of you may have arrived here from the Convenience Store News Magazine discussion. I want to be clear that it is not my intention to sell any product or service through these discussions, nor will I tolerate anyone else using our discussion to sell anything.

This is a discussion of ideas revolving around the possibilities of utilizing Cloud Computing in retail industries. Personally I’ve had some experiences in other retail types of businesses, but the convenience store industry is where I have gained most of my knowledge.

I bring to the table thirty-two years of experience in working with oil marketers and convenience store operators; a few with one or two stores, some with twenty to thirty stores, and some with several hundred stores. I have performed almost every task that can be done in the convenience store environment. I have cleaned toilets and swept floors when employees have refused to do so, ordered inventory, managed employees and provided functioning computer systems in the stores and at the stores’ headquarters.

As a result, I have had a great many experiences in the market of c-stores. I know where they are making mistakes and I know where they’re not. My emphasis is on inventory control, because from where I sit, the lack of inventory control and merchandise marketing is killing the convenience store industry for the smaller to midsize retailers – those with 1,000 stores or less, and some even larger.

When I started working in this industry in 1978, 7-11’s success prompted many oil marketers to get serious about entering the convenience store market. Mostly they were small service stations— selling oil, bulbs, batteries, cigarettes, chewing gum and gasoline. Very few sold grocery items as did 7-11.

Gasoline is what brought their customers to their stores. Putting the bathrooms inside the stores created opportunities to display a limited number of retail items for sale. The retail prices were much higher than the same items sold in conventional grocery stores. The employees that worked at these stores evolved from gas station attendants to cashiers. Most of the inventory came from the oil marketer’s own stock. Markups were generally done by raising the cost of items to produce a 30% profit. Many made the mistake of multiplying the costs by 1.3 instead of 1.43, realizing a much smaller profit than they expected.

As stores began to stock more and more non-fuel and less automotive items, operators were reluctant to hire new employees to manage the grocery stock. Stores were commonly laid out over a 100 mile radius, and managing inventory from a central location was difficult if not impossible. They went to their suppliers who agreed to keep the stores stocked. Finding an excellent outlet to sell their stock, suppliers became more aggressive and set up programs to expand the market and bring on new outlets. At first the system worked fairly well, but the sheer volume of inventory being transferred and logistics lessened the suppliers’ ability to keep up.

During the late seventies and early eighties, the convenience store industry experienced tremendous growth. Fortunes were made through fuel margins, in some areas as much as 40 cents a gallon.

Then something happened. The major suppliers of gasoline products to the stores began to open up more and more company operated stores, infringing on the independent convenience store operator’s market. If you were branded, you were forbidden from competing with the majors. In 1986, Congress closed many of the loopholes in the tax system, and the industry began to experience a downhill slide that continues through today. Walmart exploded in size and developed the world’s most efficient inventory control system and then they stepped into the fuel market.

Grocery suppliers began to experience problem of their own. Wholesale prices of groceries to retailers began to rise. Inside the stores, margins which once were much higher began to shrink to 28% then 22%. Today, a convenience store has to be very creative to see a 20% gross profit on overall grocery sales. Organizations, in many cases heavily financed by suppliers with deep pockets, began to exercise influence over struggling retailers, guiding them in directions that served their own agendas.

To compensate, convenience stores were forced to explore other avenues of making up for lost profits. One of their remedies included an expansion into deli. They began to focus on food services- fried chicken, pizza, hamburgers and french fries; even leasing parts of their stores to food franchisees like McDonalds, Wendy’s and KFC.

But their troubles were far from over. As costs continued to accelerate out of control, reducing costs became the primary concern of everyone in the industry. The largest controllable costs being salaries and store maintenance, smaller, less profitable stores simply closed up shop, or sold out to Mom and Pop’s and competitors. Government mandated wage hikes forced stores to lay off employees, prompting them to maintain a skeleton crew of minimum-wage workers who lived from paycheck to paycheck, unsatisfied with their pay and always looking for a better job.

The downward spiral continues, and today the average convenience store is lucky to see a 2% net profit before taxes. It makes one wonder why someone would invest a quarter-million dollars to realize a profit slightly higher than that offered by banks on CDs. Knowing the history helps us to understand better. If the convenience store industry was suggested today, it would probably never get off the ground.

Retailers throughout the world are facing the same problems. The current economy notwithstanding, the convenience store industry was already in desperate need of reinvention. If we look back into the history of how we evolved, we can see where we got off track and maybe these clues point a way to solutions.

If we look around and see others who continue to be successful, we have no alternative, but to come to the conclusion that they are doing something right and we obviously are doing something wrong. In my view, from my knowledge and experience, the answer lies not only in inventory control, but in other factors involving marketing techniques and attitude.

Henry Ford wrote in his autobiography, “The moment one gets into the ‘expert’ state of mind a great number of things become impossible.”

We must thoroughly examine the techniques employed by other, more successful enterprises and ignore the knee-jerk reaction that they seem impossible in our situation. We must do the opposite, figure out ways to employ their techniques in our operations. We must realize that we are NOT experts. The market changes daily. We are constantly learning and there are infinite opportunities to change for the better.

95 replies

Trackbacks & Pingbacks

  1. home decor clearance

    […]below you’ll obtain the link to some websites that we believe it is best to visit[…]

  2. 3 bedroom home design plans

    […]Wonderful story, reckoned we could combine several unrelated information, nonetheless seriously really worth taking a look, whoa did a single discover about Mid East has got extra problerms also […]

  3. decorate home with plants

    […]Wonderful story, reckoned we could combine a few unrelated information, nevertheless seriously worth taking a appear, whoa did 1 understand about Mid East has got a lot more problerms at the same time […]

  4. more movies says:

    more movies

    […]check beneath, are some completely unrelated web sites to ours, on the other hand, they’re most trustworthy sources that we use[…]

  5. robert says:

    robert

    […]usually posts some very fascinating stuff like this. If you’re new to this site[…]

  6. home garden natural pesticides

    […]The info talked about in the post are a few of the very best available […]

  7. nSpire Network Signup

    […]although sites we backlink to below are considerably not connected to ours, we feel they may be really worth a go via, so possess a look[…]

  8. Sprinkler system

    […]the time to read or stop by the content or web pages we have linked to below the[…]

  9. Cellular repair

    […]here are some hyperlinks to websites that we link to simply because we think they may be really worth visiting[…]

  10. kona 100% says:

    kona 100%

    […]Every when inside a while we pick blogs that we read. Listed below are the most up-to-date sites that we pick […]

  11. best kona says:

    best kona

    […]very couple of sites that take place to become detailed beneath, from our point of view are undoubtedly well really worth checking out[…]

  12. http://motuandpatlugames.com

    […]Here is a superb Blog You may Find Exciting that we Encourage You[…]

  13. dirty talk says:

    dirty talk

    […]one of our guests just lately encouraged the following website[…]

  14. 6 inch dollhouse furniture

    […]always a huge fan of linking to bloggers that I adore but really don’t get a lot of link really like from[…]

  15. motu and patlu games

    […]Here is a good Weblog You may Discover Fascinating that we Encourage You[…]

  16. b&q home improvements

    […]Here is a superb Weblog You may Locate Interesting that we Encourage You[…]

  17. videos says:

    videos

    […]the time to study or visit the material or web sites we’ve linked to below the[…]

  18. Financial says:

    Financial

    […]please take a look at the sites we stick to, such as this one, as it represents our picks from the web[…]

  19. server says:

    server

    […]please pay a visit to the web sites we stick to, such as this 1, as it represents our picks in the web[…]

  20. best kona says:

    best kona

    […]very few internet sites that transpire to be comprehensive below, from our point of view are undoubtedly effectively really worth checking out[…]

  21. park ridge says:

    park ridge

    […]one of our visitors not too long ago advised the following website[…]

  22. home improvement 08830

    […]the time to read or pay a visit to the material or web-sites we’ve linked to below the[…]

  23. toys fashion valley

    […]always a major fan of linking to bloggers that I love but do not get lots of link adore from[…]

  24. maxi dresses for wedding guest

    […]always a large fan of linking to bloggers that I like but don’t get a great deal of link really like from[…]

  25. 韓版爸爸我們去哪兒第二季(下部)dvd

    […]check below, are some entirely unrelated web-sites to ours, having said that, they may be most trustworthy sources that we use[…]

  26. jorge garcia cr fashion

    […]the time to study or take a look at the subject material or internet sites we have linked to below the[…]

  27. خرید سرور مجازی

    […]here are some hyperlinks to web sites that we link to due to the fact we consider they may be really worth visiting[…]

  28. 70’s ladies fashion

    […]Sites of interest we have a link to[…]

  29. beat store says:

    beat store

    […]we like to honor many other world-wide-web web-sites on the web, even when they aren’t linked to us, by linking to them. Below are some webpages really worth checking out[…]

  30. step 2 lifestyle deluxe kitchen

    […]Wonderful story, reckoned we could combine a number of unrelated data, nevertheless actually really worth taking a look, whoa did one discover about Mid East has got a lot more problerms as well […]

  31. a brand new song

    […]Every once in a whilst we choose blogs that we read. Listed beneath are the most up-to-date web pages that we decide on […]

  32. ways to earn money from home

    […]below you’ll find the link to some internet sites that we think it is best to visit[…]

  33. ny fashion week schedule

    […]Here are some of the web pages we recommend for our visitors[…]

  34. 4 appetite hormones

    […]always a significant fan of linking to bloggers that I enjoy but do not get a good deal of link really like from[…]

  35. fashion world wholesale

    […]check beneath, are some completely unrelated internet sites to ours, nevertheless, they’re most trustworthy sources that we use[…]

  36. 9 fashion calandra dress

    […]please take a look at the web sites we follow, which includes this a single, because it represents our picks from the web[…]

  37. top 5 travel agencies in south africa

    […]Here is an excellent Blog You may Obtain Intriguing that we Encourage You[…]

  38. travel places near bangalore

    […]Here are several of the internet sites we advocate for our visitors[…]

  39. bután y su musica

    […]here are some links to internet sites that we link to mainly because we consider they’re really worth visiting[…]

  40. Site sparkfun: Invalid

    […]Here are a number of the web sites we recommend for our visitors[…]

  41. China Import Agent

    […]just beneath, are a lot of absolutely not associated web pages to ours, nevertheless, they’re certainly really worth going over[…]

  42. 福井脱毛 says:

    福井脱毛

    […]always a significant fan of linking to bloggers that I really like but really don’t get lots of link adore from[…]

  43. safe traveling scriptures

    […]The info talked about in the report are some of the ideal accessible […]

  44. 福井脱毛 says:

    福井脱毛

    […]that may be the finish of this report. Right here you’ll locate some sites that we consider you will enjoy, just click the links over[…]

  45. business travel expenses ato

    […]although sites we backlink to below are considerably not associated to ours, we feel they may be actually worth a go through, so possess a look[…]

  46. 福井脱毛 says:

    福井脱毛

    […]usually posts some very intriguing stuff like this. If you’re new to this site[…]

  47. 福井脱毛 says:

    福井脱毛

    […]just beneath, are quite a few entirely not connected internet sites to ours, having said that, they’re surely worth going over[…]

  48. baldwin v traveling men’s association

    […]although sites we backlink to below are considerably not related to ours, we feel they’re essentially worth a go by means of, so have a look[…]

  49. pet travel agency

    […]Sites of interest we’ve a link to[…]

  50. d&k travel guide books

    […]very couple of web sites that take place to be in depth beneath, from our point of view are undoubtedly effectively worth checking out[…]

  51. pc games freedownload

    […]just beneath, are various absolutely not connected web sites to ours, even so, they may be surely really worth going over[…]

  52. l j world travel

    […]here are some hyperlinks to sites that we link to since we consider they’re worth visiting[…]

  53. apps for pc download

    […]we prefer to honor lots of other world wide web web-sites on the web, even though they aren’t linked to us, by linking to them. Underneath are some webpages really worth checking out[…]

  54. Alfa Laval Plate Heat Exchanger Agents

    […]although web sites we backlink to below are considerably not connected to ours, we feel they are truly worth a go as a result of, so have a look[…]

  55. Homepage says:

    Homepage

    […]below you’ll come across the link to some web sites that we think you ought to visit[…]

  56. Arduino says:

    Arduino

    […]that could be the finish of this report. Here you will find some web-sites that we believe you will appreciate, just click the links over[…]

  57. Phentermine 37.5

    […]we came across a cool internet site that you simply could possibly take pleasure in. Take a look when you want[…]

  58. Cheap Limited Jets Jerseys

    […]check below, are some absolutely unrelated websites to ours, nonetheless, they’re most trustworthy sources that we use[…]

  59. anal vibrator plug

    […]just beneath, are a lot of totally not related web sites to ours, having said that, they’re surely worth going over[…]

  60. recovery data

    […]The info mentioned within the write-up are a number of the ideal obtainable […]

  61. dirty sex says:

    dirty sex

    […]always a significant fan of linking to bloggers that I enjoy but do not get a good deal of link really like from[…]

  62. Buy Adipex says:

    Buy Adipex

    […]below you’ll discover the link to some websites that we feel you’ll want to visit[…]

  63. dildos says:

    dildos

    […]always a large fan of linking to bloggers that I enjoy but do not get a lot of link appreciate from[…]

  64. best butt plug

    […]The facts mentioned in the report are a few of the most beneficial obtainable […]

  65. clit stimulation

    […]that may be the end of this article. Here you’ll uncover some internet sites that we believe you will value, just click the links over[…]

  66. wabbit sex toy

    […]The facts talked about within the post are a few of the very best available […]

  67. Destiny best rabbit vibrators

    […]Here are a number of the websites we suggest for our visitors[…]

  68. g vibrator says:

    g vibrator

    […]here are some links to sites that we link to simply because we consider they are worth visiting[…]

  69. sex toys says:

    sex toys

    […]usually posts some really fascinating stuff like this. If you are new to this site[…]

  70. rotating vibrator

    […]usually posts some extremely fascinating stuff like this. If you’re new to this site[…]

  71. smm panel says:

    smm panel

    […]we like to honor many other world-wide-web websites on the internet, even if they aren’t linked to us, by linking to them. Beneath are some webpages really worth checking out[…]

  72. games for windows pc download

    […]the time to study or take a look at the content material or websites we’ve linked to beneath the[…]

  73. peterbilt 379 exhd for sale

    Clasificados Online para El Transportista – Si Somos los números 1 ¿Compra o Vende? Camiones, Camionetas, Volteos, Trailers – Trabajos para el Transportista

  74. persian setar

    […]although internet websites we backlink to beneath are considerably not associated to ours, we feel they are actually really worth a go as a result of, so possess a look[…]

  75. HPE0-A117P Certification Exam Questions and Answers

    […]please go to the web sites we adhere to, including this a single, as it represents our picks through the web[…]

  76. Wireless microphone systems

    […]we came across a cool site which you may take pleasure in. Take a look if you want[…]

  77. microfon spion

    […]Wonderful story, reckoned we could combine a few unrelated information, nevertheless definitely worth taking a look, whoa did a single learn about Mid East has got more problerms also […]

  78. buy real youtube views

    […]one of our guests just lately proposed the following website[…]

  79. mechanical gaming keyboard

    […]Wonderful story, reckoned we could combine a couple of unrelated information, nonetheless really worth taking a search, whoa did a single study about Mid East has got extra problerms also […]

  80. Search Marketing

    […]we came across a cool web page which you may well appreciate. Take a appear when you want[…]

  81. forex signal says:

    forex signal

    […]one of our visitors recently recommended the following website[…]

  82. prevention and treatment of night blindness

    […]just beneath, are several absolutely not connected websites to ours, nevertheless, they may be certainly really worth going over[…]

  83. Download P2090-018 Certification Dumps

    […]we prefer to honor several other net web pages on the net, even when they aren’t linked to us, by linking to them. Below are some webpages really worth checking out[…]

  84. analyst says:

    analyst

    […]Every once inside a though we decide on blogs that we read. Listed beneath would be the newest internet sites that we opt for […]

  85. e liquid says:

    e liquid

    […]usually posts some extremely intriguing stuff like this. If you’re new to this site[…]

  86. szybki kredyt

    […]just beneath, are a lot of absolutely not related web sites to ours, having said that, they are surely worth going over[…]

  87. Carlin Ross says:

    Carlin Ross

    […]here are some links to sites that we link to mainly because we consider they are worth visiting[…]

  88. male vacuum pump

    […]The information mentioned inside the report are some of the very best out there […]

  89. adam and eve sex toys

    […]very few internet websites that come about to be in depth beneath, from our point of view are undoubtedly properly worth checking out[…]

  90. wireless vibrator

    […]Every as soon as inside a when we pick blogs that we study. Listed below would be the most up-to-date internet sites that we pick out […]

  91. massage wand says:

    massage wand

    […]just beneath, are quite a few completely not associated internet sites to ours, having said that, they may be surely worth going over[…]

  92. Phil Doe says:

    Phil Doe

    […]Wonderful story, reckoned we could combine some unrelated data, nonetheless really really worth taking a look, whoa did 1 learn about Mid East has got additional problerms as well […]

  93. Title

    […]just beneath, are various completely not associated web sites to ours, even so, they’re certainly really worth going over[…]

  94. Google says:

    Google

    Here is a superb Blog You might Discover Intriguing that we encourage you to visit.

  95. Google says:

    Google

    Wonderful story, reckoned we could combine a couple of unrelated information, nevertheless seriously really worth taking a search, whoa did a single discover about Mid East has got a lot more problerms at the same time.

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply