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By Barbara Grondin Francella
In a cover story last August, Valero Corp.'s Gary Arthur detailed the petroleum marketer's plans to reduce overhead and build bigger stores holding more fresh foods and private label products.
Recently, the company opened its first brick-and-mortar embodiment of that vision. Here, Arthur gives us the inside scoop on the new Road Runner concept.
Industry veterans may remember Road Runner as a small chain of convenience stores based in Texarkana, Texas, bought by the now-defunct Denver-based Total Petroleum Corp. in the 1980s.
Today, however, Road Runner is Valero Corp.'s newest convenience concept, the latest step in the petroleum marketer's evolution from operator of a varied group of units once belonging to and flying the ExxonMobil, Diamond-Shamrock, Ultramar, Total and Beacon flags, to the owner of a modern chain of nearly 1,000 sites offering the latest in convenience retailing.
At 5,500 square feet, the new Road Runner store in San Antonio is nearly 2,000 square feet larger than the previously built new Valero Corner Store, and boasts a new distinctive yellow-and-blue color scheme and spacious interior with rich wood grains meant to differentiate it as a premium destination for fresh foods and convenience products.
"This Road Runner concept was driven by the desire to create a distinctive brand that clearly separates the store offering from the fuel offering," Arthur, senior vice president of retail and specialty products marketing, told Convenience Store News. "We're excited about what we did inside and outside this store. More than ever before, customers today want to customize their purchase and we give them that opportunity through our foodservice offering.
"We are interested in keeping and growing our traditional customer base, but we want to complement that with more female and young consumers," he added. "More expansive grocery, newly introduced meals to go, appealing general merchandise offerings like greeting cards and more expansive dairy are all part of the exciting new offering we have in store for our customers."
A great deal of consumer research and testing went into the concept, beginning with its name. "We looked for a name consumers would readily identify with," Arthur said. "We wanted a name that would encourage customers to come inside the store to buy products. We looked at a variety of names, not just c-store-oriented names. But 'Road Runner' tested extremely well, and we decided to reintroduce it."
"The Corner Store" was too generic, he said, and hadn't yet built much brand equity.
The new store is a big departure from existing Corner Stores, which have color schemes that match the Valero pump colors. "It all blended together," Arthur said. "Customers would refer to the Corner Store as 'the Valero store' and not differentiate what was offered inside the store."
Fresh Foods To Go
The new store devotes 30 percent of the floor space to prepared foods, including fresh, never-frozen hot dogs and other trans-fat free roller grill products -- marketed as such inside the store -- and ready-to-eat salads, cheeses and dips; breakfast tacos made with homemade tortillas; fresh-baked kolaches; burgers; doughnuts; pastries; muffins; and other foods. The store allows shoppers to customize their fresh foods with a self-serve topping bar for sandwiches, hot dogs, baked potatoes and tacos.
New to the chain: competitively priced ready-to-heat meals for at-home consumption. "These are for moms who want to stop at the store and pick up a meal, salad and bread and take it home for the family," Arthur said. "We want to reach consumers during the drive-home part of the day. We do extremely well during the morning and OK during lunch. But there is room for us to improve and meet the needs of customers midday and on the way home."
Now prepackaged and shipped refrigerated under Tyson and other brands, Valero is exploring a private label meals-to-go program that would roll out when there are more Road Runner stores.
The Road Runner concept also features a new Cibolo Mountain branded premium coffee program, with a higher throw weight than the Corner Store's current offer, including a light roast blend, medium roasted Colombian and dark roasts, such as an espresso roast. "We created a more robust taste, as taste profiles continue to evolve to stronger coffees," Arthur said, also noting the chain is believed to be the first to offer a sugar-free cappuccino.
Three cappuccinos will be available, with another one or two rotating flavors.
The coffee is made with triple-filtered water and served in triple-layer paper cups with built-on sleeves. Cibolo Mountain coffee will be rolled out to all of Valero's Corner Stores by early summer.
In cold beverages, the store's Flavors 2 Go fountain area features a 30-head dispenser and offers fountain drinks, fresh-brewed iced tea, ICEE-branded frozen drinks and a self-serve shake machine, as well as flavor shots on the dispenser.
"We reset our dispensers a year ago based on the best-selling flavors by market," Arthur noted. "That generated a significant lift in our fountain business."
The fountain drinks can be made with both cubed and "chewable" ice. Similar to the hot beverages, fountain drinks are made with triple-filtered water and served in cup holder friendly cups that don't "sweat" on hot days.
Many of the food programs, such as the pastries, kolaches and breakfast taco programs, have been tested in existing Valero stores. "We are bringing all of these programs together in a much bigger way, in a store designed to make it easier for operators to execute the programs," Arthur said, noting they have more workspace and storage.
The Road Runner concept also includes a new graphics package and image for the company's Fresh Choices line, which is now marketed on the outside of the store, too. The line of approximately 100 SKUs of snacks, soft drinks, spring water, vitamin water, teas and pastries is expected to grow substantially in the coming year.
Other features of the Road Runner store are a large walk-in cooler; much more general merchandise, including ice chests and automotive goods; and bigger, more appealing restrooms.
"The restrooms are designed to be much easier to clean and maintain so that we can ensure our facilities are in great condition for consumers to use," Arthur said, pointing out the Corian counters, under-mounted sinks and few corners to collect dust and debris, plus a floor drain and water hookup to easily clean the floors and walls.
Also, the store's racking -- which can be easily changed to accommodate more or less items -- is on rollers to adjust merchandising easily. The store's initial floor plan was designed by computer, Arthur said, built at the company's local distribution center and literally loaded -- racks and merchandise -- on trucks and taken to the store. "We had the ability to take a large part of the store, see how the product mix would be laid out, make modifications and changes, and deliver it intact to the store in a matter of a few hours."
Outside, the site has 14 fueling positions. New Gilbarco fuel dispensers, which are able to advertise in-store specials, community events and other information on a 10-inch screen, dispense printed coupons. In the first quarter of 2008, Arthur hopes Gilbarco will be able to add streaming video and audio to the pumps.
"We've been looking for a system that allows us to interact more with the customer," Arthur said, noting the chain will continue to use the pumps with the next few Road Runner stores to evaluate them and determine if the increased in-store traffic justifies their expense.
The greater investment in this site, however, does not mean higher retail prices for consumers, Arthur said. The roller grill, mini cheeseburger, baked potato, pastry and kolache items, for instance, are sold under a mix-and-match "two for $2.22" deal.
"On our core mix, we will remain very competitively priced," he said, but noted much of the new mix -- such as the meals to go, backpacks and ice coolers -- will have higher rings than traditional c-store products.
Customers should see, Arthur said, 20 to 25 new Road Runner locations per year for the next five years. All of the company's nearly 1,000 Valero Corner Stores will eventually be remodeled and refurbished, sporting the Road Runner name and graphics package, and as many of the programs as space allows.
"Right now, we plan to phase the name in as we do our remodeling, so if we follow that plan, it will be six or seven years," Arthur said. "We've got two-thirds of our chain reimaged to Corner Store and a third yet to do. As of now, our plan is to put Road Runner on those 300 stores, then go back and touch the others.
"I'm sure we will cost analyze the initial store and 'value engineer' costs out of it, although we were able to do that to a large extent before we opened the first one," he said.
Still, there are no plans to franchise the concept. "That's not to say at some point we wouldn't consider it, but we have no plans right now.
"The last year was a fantastic one for us, perhaps a record one," Arthur said. "We're excited about the new format and the future we think it holds for us."
For comments, contact Barbara Grondin Francella, Senior Editor, at [email protected].