Single Store Owner

JAN-FEB 2016

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JANUARY/FEBRUARY 2016 / singlestoreowner.com / 37 erages for Murphy USA Inc . "Foot traffic in general is a good guide, but you really need to know what the customers are buying once inside." Stick to the Basics In terms of buying power, there is no way under the sun that a single-store operator can compete on equal footing with a chain franchisee on the products needed for a MTO program. So in order to even the playing field, a single-store owner needs to create strategic partnerships with his or her suppliers and, of course, be quicker on their feet than the competition. "R etailers and their suppliers both need to be committed to pro- viding differentiated products that focus on quality, customization and experience," said Mandeltort. "If single- store operators are going to produce com- moditized products that are simply posi- tioned as a low-cost option, they are going to find it very tough sledding because they will be unable to lever- age the economies of scale that large chains utilize to offer low-cost products and still maintain sensible margins." Once the decision is made to transition from GNG to MTO — or, more than likely, a GNG opera- tion with a MTO platform added on — one must decide what products will be included in the made- to-order side of the foodservice operation. Sandwiches, for instance, are certainly more con- ducive to a MTO operation than drinks or pastries are. But don't think that just because you've added MTO sandwiches to your product mix they are go- ing to automatically sell like, well, hotcakes. "It really depends on t he quality and program," noted Prast. "Just because a sandwich is made-to- order doesn't necessarily mean it's better than a grab-and-go sandwich. If you are going to invest in a MTO program, make sure it blows away the competition. If a customer has to stand in line to have something made just for them, they are going to expect it is better than other quick GNG items." able to adapt to, your expected new product and production needs? "I think it's important to recognize that made- to-order is a production continuum," noted Mandeltort. "It can include everything from made- from-scratch assembly (e.g. omelets and breakfast sandwiches made from fresh eggs, or deli sandwich- es made with cut-to-order meats and cheeses ala Jersey Mike's) to speed-scratch assembly (e.g. items made with grilled, pre-marinated meats) to simple assemble to order (e.g. Subway sandwiches)." To Be or Not To Be? First, one should determine how important a MTO program might be to your current customers. "My opinion is that single stores are all unique," said fellow How To Crew member Tim Powell, vice president of consulting at Q1 Productions . "It basi- cally depends on how your customers perceive your foodservice operation. If your customers consider you the 'corner market,' where they can purchase sliced meats, cheeses and fresh bread, then yes, MTO sandwiches fit squarely into that portfolio. Others might be wise just sticking to bottled beverages and dispensed coffee with retail food, including prepack- aged GNG sandwiches." Ergo, before deciding to transition from GNG to MTO, it is imperative to determine if your current foot traffic justifies the move. There is a difference in opinion among our How To Crew members regarding how much of a steady in-store headcount is required to make the leap. " Realistically, you probably need a minimum of 600 in-store customers per day," said Mandeltort. This doesn't count gas-only customers, nor cus- tomers stopping in for just tobacco, beer or lottery tickets, then turning around and leaving. Still, another How To Crew member sets the bar even higher. "We use 1,000 in-store customers (no fuel)," explained Dean Dirks, CEO of Gig Harbor, Wash.-based consulting firm Dirks & Associates. "From that total, figure 15 percent will be foodser- vice customers." That translates into 150 foodservice customers per day, or 1,050 per week. How To Crew retailer Jack Cushman, director of foodservice for CST Brands Inc. , agrees foot traffic is an important metric. But he says it is just one of many factors to consider. Which dayparts are driv- ing the most traffic? Is it during meal periods? If so, which ones? "A store with low customer counts, but very high dispensed beverage sales, is an ideal candidate to transition its foodservice operation to MTO," noted another How To Crew retailer Chad Prast, senior category manager of fresh foods and dispensed bev- Foodservice 201: Call to Action Try your best to eliminate waste. Ten percent waste can be profitable, provided all other metrics are in line. The best number for a profitable MTO program should be 5 percent waste or under, however. Understand that labor will be your most important investment. A successful MTO program usually requires hiring a manager or assistant manager to run the program, ensuring everything is running smoothly and customers are getting what they expect. If the store has a large customer base, sampling is a great way to promote a MTO program.

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