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    Eye on New Jersey

    Long considered a tough place for convenience retailers, the Garden State heralds c-store revival.

    By Mitch Morrison

    Kim Baker and Kristin Ahlemeyer, two fresh-faced teens, look more like California sun-tanners than New Jersey c-store clerks.

    But instead of surfing, the high school seniors are serving — gallons of milk, loaves of Wonder Bread, 20-ounce plastic bottles of Coke.

    And dog biscuits. Lots of them.

    Welcome to southern New Jersey, where Baker, Ahlemeyer and Alica Glab have no time to pause, fielding orders from the left and right. Cars idle up as mostly female motorists emerge from the Garden State Parkway with crying children and barking dogs in the backseat.

    Two Snapples, a bag of chips and Marlboro Lights.

    A loaf of bread and gallon of milk.

    The orders continue as the queue stretches at this drive-through convenience store. Business is bustling. Life is good at Welsh Farms.

    Like Amerada Hess Corp. and BP plc. — both with a storong New Jersey foothold — Welsh has adopted a new face to enhance business. The Aberdeen, N.J. structure resembles a farmhouse cast in 60s retro. Inside, piles of product consume a paltry 340 square feet of floor space, not counting the cooler section. "A lot of older folk like to come shopping here because they don't have to get out of their car," said Glab. "People with pets and people with kids come here too. In some ways it's easier to come here than someplace else if you know what you want."

    This homegrown Jersey chain has settled on in-car convenience to score a marketing niche in what many consider the toughest state to run a c-store.

    Truth be told, New Jersey lends few favors to petroleum and convenience operators. Littered with aging independent dealer stations, the state is one of only two (Oregon is the other) with a law against self-serve gasoline. The restriction leaves oil companies and c-store chains little incentive to install ground-ups with interactive fuel dispensers and enhanced point-of-sale systems that appeal to self-serve business.

    Other obstacles stand: The state is the most densely populated in the country and imposes some of the most rigorous environmental and zoning restrictions. The customer base ranges from affluent to impoverished, which makes developing a marketing program challenging. The market is fraught with low-end independent operators who offer cheap gas and little else, stirring fear into more creative, yet costlier operations.

    Despite these pitfalls, the Garden State is seeing a boom in convenience store ground-ups and remodels. In addition to Welsh's remodel last year of a 1950s box construction, others including regional player Amerada Hess Corp. and global powers BP plc, Shell Oil Products and Exxon Mobil Corp. are unveiling upgrades from brighter illumination and more sophisticated exterior designs to wholesale conceptual changes.

    Recently, Convenience Store News spent an afternoon examining new concepts rolled out by three companies with three distinctive profiles: Welsh, Neptune, N.J.-based, with stores only in Jersey; Hess, headquartered in Woodbridge, N.J., but with stores along the eastern seaboard; and BP, an international power with 3,700 stores across the United States.

    Jersey Shores Up

    Welsh circumvents many of the state's challenges by letting patrons stay in their cars and by not selling gas. Hess and BP face inherently stiffer marketing drawbacks, such as how to get the full-serve motorist into the convenience store

    "The thinking among oil people is that because New Jersey is a full-serve state people would pull in, someone pump the gas for them and then they'd drive off. There was no reason to go in to the store," said Rick Lawlor, vice president of sales and marketing at Amerada Hess Corp.

    With some 90 stations statewide including 15 with Hess Express units, the locally-based outfit is seen as the first oil company in recent years to seriously invest in new c-store designs in the Garden State.

    "All our New Jersey stores are doing extremely well for us," Lawlor said. "They've been a huge surprise. We're finding that people who are filling up are still coming into the stores."

    Hess's success can be attributed to its two Hess Express prototypes rolled out over the past four years that are replacing many of the company's aged kiosks. The earlier version, a 3,400-square-foot "homeplate" configuration and the newer 3,700-square-foot rectangular layout underscore extensive foodservice treatment with Blimpie's, Godfather's, TCBY and Mountain Top coffee. The sites also display impressive graphics and strong customer service.

    The formats also feature a broader selection of groceries than typically found in c-stores. "We've designed these stores to be meal solutions," said Lawlor, "since New Jersey is a big commuting state with people traveling long distances from their home to the office. "You can pick up two pizzas, a 6-pack of soda and your groceries in one stop."

    "Our whole thing is built on fast, fun and family," he added. "Speed of service is important because gasoline purchasing is geared on getting in and out as fast as you can. 'Fun' because are graphics are upbeat and create a fun, positive image. 'Family' because we really are a family business. There really is a Mr. Hess."

    What makes Hess's investment more impressive is that it travels well beyond Jersey's more affluent, suburban southern tier, where Wawa and the likes have forged a strong c-store acceptance.

    Northern and Central Jersey is another story. The region is littered with rundown 600- to 800-square-foot food marts and kiosks. The densely populated region is largely responsible for the following statistic: Of 1,000-plus gas operations in New Jersey, less than half feature convenience stores, according to Trade Dimensions, a Wilton, Conn.-based market research outfit and sister company of Convenience Store News.

    "In Central and Northern New Jersey, there is not a proliferation of convenience stores that would be considered attractive or appealing," Lawlor said. "We believe our format appeals to the state's [personality]. Some of our stores are a melting pot with a Mercedes-driving woman and the guy painting her house. It's a mix group of people."

    BP Connects

    A short distance from the Hess in Edison, Inaam Elhelou, a Lebanese native with a rich background in foodservice and retailing, greets customers with a friendly grin at the newest BP Connect in North Brunswick.

    Open since April, the store, sitting on the site of a former go-go bar, is stirring more than the lascivious glances of its predecessor.

    Already, the location's 10 fuel dispensers are pumping more than 150,000 gallons a month. Inside, the proprietary Wild Bean Café is capturing local workers and residents with a tasty line of soups, freshly made sandwiches, baked items and a rich selection of coffee flavors.

    With several tables and inviting lighting, the store – one of five BP Connects in the state with 60 planned over the next five years — is persuading motorists to park their cars after a fill-up and grab a bite. "People are looking not for the price but for the service," said Elhelou. "People are starving for customer service and we're giving it to them. It's showing us that people always just fill their car with gas, then go."

    Elhelou assumed the reins of this company-operated location after spotting a BP recruitment ad about one year in a local newspaper. "After 12 years in the restaurant business I wanted something new," he said. "I sent my resume, they called me and hired me. They trained me on the gas business and environmental issues. My background was in the food business so I knew I could do well running the store."

    One of the more dazzling concepts in the c-store industry, BP Connect bears brilliant green and yellow signage – the company's signature colors – throughout the store, directing patrons to the ATM, well-kept bathroom and free e-kiosk, which spits out news, traffic reports and road directions. The 2,900-square-foot layout is free of clutter, absent the often-found ceiling danglers and promotions pasted on exterior windows.

    "This store is a real change from what people are used to," said Elhelou. "We're changing the image of convenience stores."

    In contrast to BP's inviting image, Welsh Farms' marketing strategy is to keep customers out.

    With a drive-through modus operandi, Welsh tailors its approach on simplicity. Want a sports drink? Gatorade is your sole game. Milk or OJ? Try Welsh's proprietary brand. With space tight, selection is simple — one or two brands per category. That's it. No fuss, no quibbling.

    "Obviously, there's no impulse buying," quipped General Manager Dal DeBenedetto said.

    One of the store's charms is its sense in simplicity in a pocket of New Jersey that dovetails farms and suburban sprawls. From a small depot where milk and dairy goods were delivered door to door 35 years ago to today's utilitarian metal baker's racks and modest presentation, Welsh's true marketing success is its nostalgia.

    "This place started out as a dairy so we thought it would be good idea to make it look like a barn and bring back its roots," said DeBenedetto. "While the outside of the building has changed, the inside isn't much bigger than the original. All it was was a 550-square-foot location. Now, it's 792 square foot – and that includes the bathroom and back office.

    "There isn't much there but we get the most out of it."

    By Mitch Morrison
    • About Mitch Morrison

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