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SAN ANTONIO -- One year ago today, CST Brands Inc. spun off from Valero Energy Corp. Since then, the standalone retail organization has been making strides in growing its retail network and expanding its offerings.
The San Antonio-based company currently operates nearly 1,900 locations in the southwestern United States and eastern Canada, including 500 dealer stores in Canada and more than 1,300 company-operated stores in the U.S. and Canada.
These numbers are growing. “Last year, we built 15 new stores in the U.S. and another seven in Canada, and this year we will build 30 new stores,” CST Brands President and CEO Kim Bowers told CSNews Online. “We will have 10 open by April, and all but two of the 30 are in Texas.”
In March of this year, the company identified 100 underperforming U.S. Corner Store locations with plans to sell the properties through NRC Realty & Capital Advisors LLC. It is waiting to announce the specific locations until all employees at the affected stores are informed.
“For the most part, we are able to find places for the employees of these stores to stay within the company,” Bowers said, noting at the time of the interview that almost all the stores had been informed of the sale. “We can move many of them to other locations.”
The new Corner Stores that CST Brands is building feature the chain’s new-to-industry (NTI) format, which is much larger than previous Corner Store locations. This format was set back in 2007 and ranges in size from 4,500 to 5,500 square feet, Bowers explained.
“We have a couple that are larger – one near our headquarters that is 7,000 square feet and another one that is 10,000 square feet,” she noted. “The new builds are on 2-acre lots, with larger parking areas to allow customers to get in and out of the store easier, and a lot of fuel offerings. The stores offer a more open feel, and seating inside.”
The retailer is celebrating its one-year anniversary this month with a number of in-store promotions, and all of the staff is wearing special anniversary T-shirts.
Focus on Foodservice
One of the most notable aspects of the new larger Corner Stores -- and where much of the focus for CST Brands has been since the spinoff -- is an increased focus on foodservice. The chain hired a new director of foodservice in September, and the category takes up 40 percent of the layout in the NTI stores.
“This year, we tried to hone in on our fresh food offerings and hired a director of foodservice who came from the fine-dining restaurant space,” Bowers told CSNews Online. “His name is Richard Poye and he is a culinary-trained chef who also worked for an international food distributor, as well as running several fine-dining restaurants.”
Much of the Corner Store chain's fresh food is baked on-site, including its whoopie pies, kolaches and breakfast tacos. The company is nearing the final stages of a new offering that will cater to the afternoon and evening dayparts. This will be added to its proprietary line through a launch this summer, according to Bowers.
“Poye is really helping us think about moving from being a refining-owned retailer to being a retailer where food is our focus,” she said. “We are still working toward offering more of a dinner daypart. We have some offerings in the afternoon, but still have more of a heavy breakfast crowd, which we do really well in. Now, we need to do better at getting the evening crowd in.”
CST Brands recently acquired its first food truck, featuring a fully functioning kitchen. The truck travels throughout Texas selling whoopie pies at all of the new-store grand openings, and the chain recently ran a successful promotion using the truck this February.
“We ran a promotion on whoppie pies for Valentine’s Day and saw almost a 50-percent increase in sales for the month,” Bowers noted. “Our slogan is ‘Making Whoopie … Pies,’ and we handed out T-shirts with the slogan during the month.”
Right now, the food truck only offers whoopie pies, but the full kitchen provides the potential to expand in the future, and CST Brands is looking into using the truck at smaller stores not currently offering foodservice, which is 60 percent of the chain.
“We will be evaluating how we can use it over the next six months, and may add additional trucks in the future,” Bowers shared.
Furthermore, the company is continuing to add to its Fresh Choices private label product line, and recently rolled out a new salty snack called Taco Rollos, a spicy snack.
“We do well in energy drinks with our UForce private label drink, which we have done a lot of promotion on, particularly in Colorado. And most of the year, we have had the cheapest price on milk, along with well-priced bread and eggs that have been doing well,” Bowers said. “We have big signs on the pumps letting people know about it.”
Coming Up Next
To distinguish itself from other stores selling Valero fuel, one of the initiatives being launched by CST Brands this year is a signature community charity fundraiser at its stores called the Corner Store Country Run -- a series of 5K races starting this September.
“Customers, employees and vendors will be raising dollars to give back to children’s charities in the communities where our stores are located,” the CEO explained.
The chain is also looking to develop its own dealer network in the U.S. and will be working to set up deals to supply fuel to the 100 stores it recently put on the market for sale. This will give CST Brands the direct relationships outside of Valero, Bowers noted.
“We will offer dealer supply contracts to them while someone else will run the store,” she explained. “It is a marketplace that over time is going to be consolidating, and we are a strong party to be participating in that process.”