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By Don Longo
GERMANTOWN, Wis. -- Kwik Trip, the vertically integrated La Crosse, Wis.-based convenience store chain, held a grand opening for its 353rd convenience store here this week. The opening marks the beginning of an aggressive store opening schedule that will see a new Kwik Trip open every two to three weeks between now and the end of the year, according to CEO Don Zietlow, who with other Kwik Trip executives, gave CSNews Online a tour of the store, which represents the retailer’s new look for the future. View a slideshow featuring Kwik Trip's new look.
Kwik Trip, which owns its own bakery, dairy, kitchen commissary, ice and water plants as well as a central distribution center, will open 15 to 20 new stores this fiscal year despite the recession, Zietlow told CSNews Online. Most of the new stores will be built-to-suit—although the Germantown store is a rebranded and remodeled store purchased from an independent Mobil dealer in March. Although slightly smaller than Kwik Trip’s normal 5,000-square-foot model, the Germantown store features the chain’s new "softer" look aimed at making the facility more "homey" and appealing to "soccer moms" and other female customers.
"We’re spending $30 million over three years to redo all 350-plus stores to this warmer, softer color scheme," Zietlow said. The new look, the result of feedback from several customer focus groups, gives the store a more upscale look, with wood fixtures, subdued florescent lighting with accent lighting spotlighted on key areas, less clutter on the floor, and rounded corners on in-store departmental signage. The color scheme of browns and greens is a big departure from the bold red and blue hues of traditional stores.
The new store layout also more effectively displays Kwik Trip’s trademark baked goods and produce departments, according to Zietlow. "Our sales have actually grown quite well, despite the recession," said the chain’s astute, but unpretentious leader. "We’ve been promoting the value of our commodities, such as milk, bananas and baked goods."
"The value proposition is so important," said Steve Loehr, vice president of support operations, as he showed CSNews Online the store’s new Kafe Karuba coffee presentation, new fresh display case endcaps (bigger stores will have fresh case islands rather than just endcaps), and the European-style bakery cases.
Because the retailer controls the manufacturer and distribution of so much of its product mix, it can gain a significant advantage in price on competitors, explained Zietlow. It delivers fresh products direct to every store each night, and can be a price leader in such key items as bananas (49 cents a pound), Glazer sugar-glazed doughnuts (at half the price of Krispy Kreme) and milk. Bakery is one of the chain’s fastest-growing departments. In one year, Kwik Trip sells 30 million Glazer doughnuts, 8 million muffins, 8 million loaves of bread, 5 million thaw-and-frost donuts, 5 million cookies, 3 million rolls and 2 million Danish buns—all baked fresh at its central Kwikery Bake Shoppe. Bakery sales are growing so fast the company is adding an 80,000-square-foot addition to its central bake shop at the cost of $30 million, said Zietlow.
The company’s own water plant enables it to offer customers great prices and make more profit with its private label Nature’s Touch bottled flavored water and its own label Kwikade sports drinks. Loehr said Kwik Trip will be introducing a new, exclusive label vitamin-enhanced bottled water this fall.
And Kwik Trip’s 60,000-square-foot commissary currently supplies its stores on an annual basis with 1.8 million pizzas, 500,000 gallons of soups, 4 million breakfast sandwiches, 2 million deli sandwiches, 500,000 fresh salads, and 1 million cheese snacks. With a capacity to triple volume of current production, the facility is also looking to expand its distribution to third-party customers and to add a prepared meals to the product mix.
"We feel there is a great need for good, home-feel tasting meals for the busy soccer moms of the world," Jay Ellingson, Kwik Trip’s food safety and quality assurance director, told CSNews Online earlier this week.
In Wednesday’s ribbon-cutting at the Germantown store, Zietlow thanked all the chain’s 8,700 "coworkers" and noted—to the delight of local politicians in attendance—Kwik Trip would be spending approximately $120 million on capital expenditures this year, which will have significant impact on local economies in the chain’s market areas.
"Our greatest asset is our people," Zietlow continued, as he pointed out the corporation gives 40 percent of its pre-tax profits to its employees. "They understand that if we make a dollar, they make 40 cents; if we lose a dollar, they lose 40 cents."
Employees also share in the company’s success by virtue of another program called, Convenience Store Investment (CSI). Loehr presented store leader Beth Ohde, a 20-year Kwik Trip veteran, with a CSI plaque, noting, “when the store is paid off, the rent we would pay goes into a fund for employees. Two thousand employees are part-owners so far.” There is currently $250 million in assets in the CSI fund, Loehr added.
View a slideshow featuring Kwik Trip's new look.
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