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PITTSBURGH, Pa. -- Giant Eagle's new GetGo store in South Fayette bakes bread for its made-to-order subs, and sells 30 varieties of coffee, cappuccino and tea, eight flavors of frozen drinks and milkshakes from a self-serve blending machine with a touchscreen. Motorists can fill up their vehicles at 16 fuel pumps, or clean them at the store's WetGo car wash.
While customers are impressed, competitors with older, smaller convenience stores are worried, according to a report by the Pittsburgh Tribune-Review.
The newest Sheetz, GetGo and Wawa stores in Pennsylvania and nearby states "are the franchisee-owned convenience store's worst nightmare," retail expert Burt P. Flickinger III said.
"The meals-to-go program Sheetz has is one of the finest anywhere in the world," including high-end convenience stores in Japan, Beijing and Europe," said Flickinger, managing director of Strategic Resource Group in New York. "The GetGo program is superb, and the brilliance of the food and fuel frequent shopper card overlay makes it that much tougher to compete against."
Despite the tough economy, sales at a typical Sheetz store rose 7 percent last year and customer count was up by 3 percent, Sheetz CEO Stan Sheetz told the newspaper. The chief executive said he's noticed cold beverage sales "didn't go down, but the rate of growth slowed" as gasoline prices have risen by more than 40 cents during the past three months.
Sheetz stores always have sold fresh food to go, starting with a sit-down counter at the first store Sheetz' father, Bob, opened in 1952 in Altoona. Now, the chain focuses on "trying to allow the customer on the go to multitask when they visit," Sheetz said. "That can be any combination of filling up the car, getting a beverage or getting enough food to take home to the whole family. They can do that 24 hours a day."
Altoona-based Sheetz Inc. has 390 stores in six states, and plans to open 30 more this year including one in May in Plum. Newer stores are 5,000 square feet or more in size.
O'Hara-based Giant Eagle started selling gas in 1995 from an attendant's booth and four pumps outside a Youngstown, Ohio, supermarket. Its store network got going just eight years ago, and GetGo now has 162 stores, including 75 in the Pittsburgh area.
The South Fayette location that opened in November "is our platform for new stores, going forward," Dave Daniel, vice president for GetGo operations, said in the report.
The 5,500-square-foot store is the first to sell Old Fashioned Subs, which were pioneered at the company's Giant Eagle Express concept store in Harmarville. A seating area at the location offers Wi-Fi service, and a circular "cash wrap" counter has several checkout points.
Sheetz, GetGo and Wawa, which has stores in the Philadelphia area, are "three of the most formidable, well capitalized and most capable competitors anywhere in the world," Flickinger said. Their highest-volume stores may ring up $350,000 a week in sales, half inside and the rest at the pump. Sales at an average c-store range from $15,000 to $25,000 a week.
Sunoco Inc.'s APlus stores, which compete head to head against these operators, is using new promotions to standout, Flickinger noted. Every month, APlus promotes different breakfast sandwiches and other items tied to gas rewards under a sales growth program that started last year, said Joe McGinn, spokesman for the Philadelphia-based company.
Customers are visiting more often. Monthly same-store sales at Sunoco-owned APlus locations were 21 percent higher last year than in 2008, McGinn said. Sunoco also partners with Pittsburgh-area Shop 'n Save supermarkets to offer gas rewards, a program that started after Giant Eagle kicked off its gas discounts.
The company will demolish an APlus convenience store occasionally to replace it with a bigger store, and has such a project set for this summer in Kittanning, McGinn said. Sunoco has 150 gas stations in Southwestern Pennsylvania, and about 30 close to Pittsburgh have corporate- or franchisee-owned APlus stores.
Superior Petroleum Group's Fueland stores run Rollback Rewards, which knocks a penny off gas for every $5 spent at the store or at a Foodland supermarket. The program has helped to keep sales stable at the stores, which sell gas under the BP, Valero or CITGO brands, said Don Bowers, manager of petroleum and transportation for Ross-based Superior.
"But in some areas, it's still down because of the Giant Eagles," he said. Running convenience stores "is a tough business. You don't make money selling gas, so you try to make up for it on Twinkies."
Rewards programs are key in the industry, Flickinger said. Consumers can save $500 a year or more on fuel and other purchases, and when they're prevalent in a market, such as in Pittsburgh, they help to keep prices lower overall.
Wheeling-based Tri-State Petroleum Corp. is working with Elias/Savion Advertising of Downtown on a marketing campaign for about 50 stores in Western Pennsylvania and nearby parts of Ohio and West Virginia. Changes should start to appear in a couple months, Tri-State CEO Colleen C. McGlinn told the newspaper.
Tri-State owns and operates more than 30 of the sites, and dealers with franchises run the rest. BP, Exxon, Mobil and other petroleum brand signs mark the pump areas, but the stores are unnamed.
McGlinn wouldn't discuss the campaign, but said the company wants to offer more fresh, healthy and affordable foods. "Everyone is so busy these days, that they expect and demand new and different products. Retailers are trying to meet their needs," she said.