CSD Cover Story: Sheetz Continues Reinventing Convenience
By Shahla Hebets
Through special arrangement with Convenience Store Decisions magazine, we present these opportunities to discuss the subjects of CSD’s monthly cover stories.
When it comes to delivering quality and value, few chains are as highly regarded as Sheetz. The chain has long been admired for its superiority in innovation and its diligent commitment to consumer satisfaction.
It’s not just that Sheetz has 326 stores in six states that make it a leader in the convenience channel; it is the total package of goods and services, quality and value that is driving the business. Sheetz strives to constantly reinvent itself “and put the Sheetz of today out of business,” said company President and CEO Stan Sheetz.
Among the ways the company is doing that are its self-distribution center in Claysburg, Pa., being the first to market with concepts like no-fee ATMs, E-85 fuel and its new convenience restaurant concept.
Sheetz began researching the restaurant concept back in September 2001. The company certainly considered competitors inside and outside the convenience channel in piecing the store together, but no existing retail concept served as a model for the prototype – the company started from scratch based on research culled from customers, vendors and employees.
As a whole, the convenience restaurant has an upscale, big city feel, but manages to maintain many of the design elements Sheetz regulars have come to expect. The company expects it to do nothing less than revolutionize the convenience industry.
The convenience restaurant measures 10,000 square feet, about twice the size of an average Sheetz store. Multiple touchscreen order points give customers the option of ordering brick-oven pizza, paninis, gourmet salads and other made-to-order foods. (Each “base” food item on the touchscreen menu lists the individual sandwich components so customers can select exactly what they want on their food item.) To the left lies an open atrium equipped with Wi-Fi Internet access, several big-screen televisions and an ample seating area with wood floors, bistro lighting and other design elements typical for fast-casual restaurants.
A made-to-order Sheetz Bros. Coffeez Espresso bar, manned by baristas trained in the art of crafting specialty coffees, adjoins the restaurant and c-store. Sheetz has raised the bar with its inline coffee station, offering high-quality hot and cold coffees and coffee alternatives.
Stan Sheetz recently spoke with Convenience Store Decisions about the company’s operations and the enormous success of the family-owned convenience chain.
CSD: To what do you attribute your success?
Sheetz: I believe success has been driven by our corporate culture. We always think we can do better or that good is never good enough… We continuously reinvent ourselves, and that means we always have to get a little bit better at everything that we do.
CSD: What do you deem your most innovative customer program?
Sheetz: Our focus is on the “on-the-go” consumer. It’s hard to put a pin on the demographic because so many people are on-the-go. We focus on people that value time, and we do not focus on one specific program, but rather create programs around a large demographic of convenience shoppers. One of the best things that we did years ago was to add restrooms to all of our stores and open them to the public 24 hours a day. This was difficult to execute because cleaning restrooms is not something that people like to do, but our customers really appreciated that we thought of their needs. The ultimate convenience consumer, “the road warrior,” knows that they come to us for a clean restroom, fuel for their car and something for their belly as well.
CSD: What recent experience had a significant impact on your organization?
Sheetz: One of the largest impacts occurred about seven years ago when we instituted our employee stock ownership plan. Every employee that has been with the company for more than a year becomes a stockholder automatically. We do not ask our employees to contribute or pay for the stock in anyway. Rather, we give them the stock as part of their compensation and incentive plan to foster a vested interest in growing the organization. It’s a really great thing, as it gives people a sense of ownership because they actually have ownership. But more than that, it gives them a sense of pride in delivering the Sheetz brand to our customers.
The only way to increase the value of the organization is through taking care of your customers and your employees.
Discussion Question: What makes Sheetz “different” from convenience stores and other businesses it competes with?
Reading the Convenience Store Decisions piece, we couldn’t help but wonder if innovation is really what makes Sheetz superior to those it goes up
against or if it is the chain’s commitment to properly executing the basics, such as keeping the restrooms clean, opening additional registers to keep customer lines short, etc.
– George Anderson
As I’ve said before — it always all comes down to culture. Sheetz has a tradition of not resting on its laurels, constant innovation and always keeping its eye on the customer. That explains a lot about their success — maybe everything.
Sheetz is doing the right thing to differentiate themselves from their competitors. This positioning gives them a unique edge in a marketplace which is filled with many stores which all look alike. The key here is to offer niche products that make their stores a destination location as well as the standard products that their customers come to expect from them.
What makes Sheetz a truly great company is simple to say, but not so simple to perform. Sheetz is focused on the customer. The customer today and the customer 5 years from now.
Sheetz began working on the restaurant concept in 2001 because they knew the face of the convenience customer is changing and will continue to change. Clean restrooms, well stocked shelves, courteous people, good service, etc. are basics to retail that every company should focus on. But truly understanding your customer and where your customer is heading, that is the unique characteristic of Sheetz, in my opinion.
Sheetz seems to me to be an exemplar of the customer service principle of “great people supported by great practices.” A service culture is a wonderful thing, but if it is not enabled by solid business practices that ensure customer-facing success, that culture would amount to little more than a veneer overlaid on a rotten substrate.
From my observations, Sheetz is just the opposite. It has invested in sound practices that support its people and ensure their success. The touch-screen ordering systems are a great example of this. Not only are they convenient to shoppers, they make the ordering process far less ambiguous and order completions much faster – both key factors during the morning coffee and midday lunch rushes.
Do ESOPs help breed happier employees? Absolutely. But Sheetz wins big because of the environment of success that it breeds by deploying customer-facing practices that win. Staff members know they are doing a great job. It’s the practices that make them almost perfect.
Sheetz is a very customer-focused organization. They think hard about and then deliver well on things that are important to their customers.
The thing that sets them apart from most of the retailers is their motivated and talented people. Sheetz has created a culture that has allowed them to attract, retain, and then encourage good associates to give their very best. This makes a major difference in the marketplace.
Continually innovating to be a cutting-edge accommodator of today’s lifestyles and a total team commitment to the Sheetz culture sets the 326 Sheetz convenience stores apart from the pack. Kudos to Stan Sheetz.
Stan Sheetz, and the culture he brings, is what impresses me most. He walks the talk over and over again. Some merely talk the talk, and a good portion walk the talk until they get “comfortable,” and then let innovation slide. Stan Sheetz has the courage and stamina to stay with it. Rare. Very rare.
Ditto on Ryan’s comment about culture. When you get your ecological dimension right the economic dimension is almost effortless. Some day in a land far far away we’ll finally understand this universal law. This is a company I’d like to get to know.
This is going to be heresy coming from a technology contributor, but the Sheetz story apparently buttresses the well known importance of people in an organization. Technology can help enable motivated employees to do a better job, it cannot replace them. As we have seen with other discussions, companies who have found a way for their employees to share in the corporate success seem to have more success themselves. Another benefit must be the corporate structure, which allows a private company to shed some of the overhead carried by their publicly owned brethren. But probably the most significant factor is a “clear objective.” Their management has stated a very concise mission: “We are here to serve the road warrior.” There is nothing ambiguous in that statement and it certainly helps that many of the people they serve are much like the employees that work in the store. This sense of identity serves to build customer loyalty.
Congratulations to Sheetz for continuing innovations in the otherwise uninspired convenience store market. Sheetz’ history is a classic example of the Wheel of Retailing. Convenience stores first started with limited facilities and services and low prices catering to price sensitive consumers. During the roll out of convenience stores in the 70’s and 80’s, facilities and services improved attracting a broader base value conscious shoppers. Now we have the full evolution with Sheetz. Excellent services attract a more upscale consumer commanding higher margins.
Sheetz runs and locates supersized convenience stores expertly. Their average store volume is $7.2 million. Compare that to a typical competitor, such as Cumberland Farms, whose average store sales are $2.7 million. Sheetz stores aren’t just larger, their locations are better, and they optimize use of their space. By staying within a relatively focused region, which has reasonable real estate and operating costs, Sheetz optimizes its profit.
Customer service and innovation is extremely critical, but it’s Management and its style that is the reason for Sheetz success in reinventing the business.
All this is framed within the superior ‘culture’ that has been built and nurtured by Management! Marketing and strategic thinking have always been, and still are, the second most important reason for Sheetz success…and keeps Sheetz number # 1a long way from everyone else.
It makes sense for others to follow this winning and profitable formula. Hmmmmmmmmmmmmm