P-O-P Show Report: BP Gases Up C-Stores

Three years ago, executives at British Petroleum realized that their 2,000-odd corporate-owned and franchised U.S. convenience stores needed a major upgrade. "If we didn't [do it], we'd be out of business," said Richard Griffin, chief merchant for BP's U.S. c-store operations, during a keynote presentation Dec. 9 at The P-O-P Show/New York. The circumstances demanding BP's evolution included the emergence of supermarkets selling gasoline, drugstores focusing on convenience, and consumers exhibiting an "it's all about me" attitude by demanding personalized services and shifting store loyalty if their needs aren't quickly met. After talking to its shoppers, the company identified several "must haves" to incorporate into stores. "It's easier said than done," Griffin said. "It's doing it every hour, every day and in every store." At the 850 stores operating under the Arco am/pm banner on the West Coast, "must haves" translated into an expansive fountain bar offering 24 choices of carbonated and non-carbonated beverages, various energy shots and "cubed" or "crunched" ice. The setup allows shoppers to mix and match as they like. Coffee selection has been another focus for BP, which has transitioned its offerings from merely regular or decaf options to a multitude of choices, increased the size of cups (and the price) and tripled the size of the condiment counter to make preparation easier. At the 4,200-square-foot BP Connect stores, which are located primarily on the East Coast, the "must haves" are delivered through the Wild Bean Cafe, which features a variety of fresh food options and gourmet coffee. Customers also can customize sandwich orders at a computerized kiosk. BP also is looking to boost sales of packaged goods by making products more accessible and the overall shopping experience easier. For example, items are being moved from behind counters to gondolas and shelves. The company is also striving for cleaner aisles by limiting the number of "unauthorized" secondary displays, Griffin said. (Vendors, however, can still earn placement by working with category buyers, he added.) Promotionally, the company is hosting fewer campaigns. While it traditionally has run as many as 30 programs per month, it now hosts no more than seven. "We re-thought how we do [promotions]," he said. "They have to be seen, they have to be relevant and offer consumer value." Spending less executing promotions also frees up staff for more attentive customer service and allows shoppers to "fill up" faster. Since the bulk of transactions take place between 6 a.m. and 10 a.m. when consumers stop in before work, 60% of stores are now restocked overnight. Improved customer service also means increasing face-time for managers and even corporate-level BP employees. Managers are expected to man the cash registers for at least part of the morning crunch, and corporate officers -- including the CEO -- work in stores for a set number of hours each year. "It drives home the fact that the customers coming through the stores actually pay our wages -- forget the big oil business," Griffin said, adding that the chain expects to conduct 350 million shopper transactions in the U.S. this year. The changes appear to be paying off. Over the last 18 months, dollars per item have increased 12% (or $0.24), basket size 30% (or $1.16) and profitability per customer 35% (or $0.38), according to Griffin.BP expects to have all corporate or franchised stores redesigned by the end of 2005. To date, 40% to 50% of locations have been redone, with efforts focused mainly on the East Coast BP Connect stores. Initiatives for the West Coast Arco am/pm stores will officially begin in January 2005, Griffin said.

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