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    Innovators Take the Lion's Share

    On many fronts, the industry as a whole seems to be performing at a higher level than ever. Average per-store sales are up, average per-store gross margin dollars are up, industry pre-tax profits are growing and the outlook for 2006 and 2007 is bullish, according to the Convenience Store News Mid-Year Forecast Study (turn to Page 16 for more on this).

    On many fronts, the industry as a whole seems to be performing at a higher level than ever. Average per-store sales are up, average per-store gross margin dollars are up, industry pre-tax profits are growing and the outlook for 2006 and 2007 is bullish, according to the Convenience Store News Mid-Year Forecast Study (turn to Page 16 for more on this).

    But is the prosperity and growth evenly distributed among the industry's 140,000 stores or are high performers disproportionately pulling up average industry benchmarks? Is the 80/20 rule at play here as well? The truth is, no matter how much middle- to low-tiered performing companies want to deny it, the top performing companies are at the top because they innovate, and they innovate all the time.

    Top performers are at the top because they invest in their businesses, they are focused on new product and service development, and they listen intently to their customers and give them what they want and need. They continuously try to figure out how to make the lives of their customers easier and more convenient. Once they roll out something new, they are already trying to figure out how to do it better. When something doesn't work, they try to fix it. If it can't be fixed they get rid of it and move on to the next thing that deserves their focus and attention.

    Sounds simple, doesn't it? Well, in theory it is simple, however living the talk requires a fierce commitment, and not everyone "has the stomach for the business," one industry retailer told us at our recent Future Forum event in Atlanta. Retailing and foodservice is a tough business. Sometimes one hits a grand slam, other times there may be a few solid singles, doubles and triples. But when retailers "lose their stomach" so to speak, is when they can't seem to hit anything. Everyone strikes out now and then. Even a top performing company acknowledged at our recent Foodservice Roundtable that "we are screwing up all the time." The difference is that the innovators are "relentless" in their pursuit of doing things better and different.

    So how do you make sure you are equipped to stay in the game and avoid those slumps in between the small and big wins? No matter how you slice it, it still comes back to focus, investment, commitment and innovation.

    Too often we hear retailers in the industry pointing to some of the best-known top performers saying, "Well, we could never do that," or "We could never compete on that level," or "They are breed apart." Indeed, Wawa, Sheetz, QuikTrip and a handful of other strong regional players are a breed apart, but that's because they work very hard to make sure that they stand alone. Their success is not by accident, nor does it come easy.

    So as we look at this month's cover story about MAPCO's new concepts and vision of the future, we tip our hats to the company that is clearly reinventing its business and trying to shed its former reliance on motor fuels and location. "The mantra of the convenience store has long been location, location, location, but location is only good for so long," said Paul Pierce, vice president of marketing for MAPCO. "You have to have something that you can hang your hat on, something people know when they see your brand. Otherwise, you're solely dependent on your location."

    There are many more retailers out there that need to shed the "I can't do it" cloak if they want to remain viably competitive. The only other option is to sit on the sidelines and watch as the innovators continue to take the lion's share of sales, profits and satisfied customers.

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