Fuel economy Featured

6:14am EDT March 24, 2006
Stephanie White-Longworth ascended to the top of the GasAmerica Services Inc. empire far sooner than she ever planned.

When her father, Richard, passed away at the age of 53 in 1998, White-Longworth was appointed president and CEO.

“There was a big transition time. It was a little scary,” White-Longworth says.

Eight years later, she is quite comfortable leading the 78-station chain of gas station/convenience stores throughout Indiana and Ohio. And if the company is to continue moving forward, stagnation is not an option.

“We certainly believe that you have to grow to survive,” she says. “Overall, we look at growth two ways — same-store growth, which we try to keep a focus on, and new stores. Our goal with the new stores we call ‘assertive but fiscally responsible.’ We want a steady pace of growth that we can handle financially and work into our operations without a great deal of upheaval.”

White-Longworth plans to grow GasAmerica with a detailed real estate plan, a commitment to employee training and by using technology to maximize efficiency at the company, which posted 2004 revenue of $343 million.

Real estate
White-Longworth’s goal for new site growth is between 8 percent and 10 percent every year.

“We’ve watched the industry, and we’ve watched some of our competitors who’ve grown probably a little too rapidly,” White-Longworth says. “We went through spells where we didn’t grow; we know that that’s not a good thing. We went through spells where we stretched ourselves a little bit. That (8 percent to 10 percent is what) we’ve averaged out at that seems to work well for us to keep us growing at a manageable pace.

“We feel it’s assertive. It doesn’t put us in a compromised financial position. It allows us to grow and keep our key ratios where we like them to be. It seems to be a number that flows pretty well for us. You have to be careful when you get overexcited. It’s very difficult when you’re a company our size to grow at 20 to 30 percent every year.”

For White-Longworth, there is something to be said for knowing your market. That’s why the company focuses on building in Ohio and Indiana and not on branching out into other states.

“We feel that we have built a local brand,” White-Longworth says. “We can tell that in our new stores if we put a new store in city or a market where we already have a presence. That store will take off much more quickly than when we go into a new market.”

And there is no better way to find the right location than looking for it yourself.

“We do it the old-fashioned way,” she says. “We drive around in the car — a lot. We get a lot of calls in the Indiana market about different real estate that is available. We try to check out every opportunity. Our primary focus at this point is to stay and expand in the Indiana and Ohio markets. We’re there, and we’ve got plenty of fill-in space.”

Moving into new markets — although not entirely out of the realm of possibility — creates challenges the company doesn’t want to deal with at this time. Moving to a new state means dealing with new tax laws and hazardous product issues.

“If we came across a seven- to 10-store chain in another state, we would take a look at it. But to add one site, it really doesn’t make much sense for us to do that,” White-Longworth says.

While the company looks for new places to put its gas station/convenience stores, White-Longworth makes sure that existing sites are not neglected. Each year, she budgets to remodel and rebuild some of the older locations.

“(With) same-store growth, we put quite a focus on rebuilding our older locations and continually doing remodel work,” she says. “Every year, we take a look at our whole package and we decide if there’s anybody that we need to completely tear down and rebuild. Then we look at each store individually and look at whose counters are falling apart, who needs a new awning, who needs new lighting. We try to fit in as much of it as we can.”

Remodeling is important to maintaining the overall integrity of the chain.

“Appearance is important, particularly with women,” she says. “You need to keep your lighting up — things like that. They want to feel safe where they shop.”

White says that while remodeling provides a slight sales increase, the main purpose is to maintain consistency across all of the stores.

Same-store sales
In addition to the growth that comes from new sites, White-Longworth also focuses — through a combination of training and technology — on organic growth from existing sites.

“(The growth target) changes annually, and we have to break that down because gas to us is not a dollar business, it’s a gallon business,” White-Longworth says. “If you look at dollar sales, it’s real easy to inflate that depending on the gas price. Cigarettes are also more of a unit-type item, so we break those goals down by location. Each store has its own goal by units and dollars for the other categories that we try and base that upon.

White-Longworth says she receives data daily, and gas sales can be pulled hourly. That data is then used to identify trends, and track promotions and adjust them accordingly.

“If you run a program with a coffee and a doughnut, you want to see if it’s effective,” says White-Longworth. “We can see how many people actually bought coffee and a doughnut. Sales are certainly the No. 1 place that we use that in deciding merchandising and promotions.”

Every month, the company runs different promotions, which are scheduled a year in advance.

“Every single month, we analyze the effectiveness of every one of those promotions,” she says. “We look at how much signage was put toward it. What did the sales actually do? Did our loyalty (card) customers buy more than the nonloyalty customers?

“Early on, we used to not sell a lot of eggs. We ran a really hot deal on eggs, which cost us money to run. We ran that deal for 30 days. The next month, we doubled our egg sales, and our egg sales have continued to be double ever since. And we’ve not ever had to do that promotion again.”

Promotions are also useful for introducing people to GasAmerica and what it can provide.

“A lot people don’t associate convenience stores with having reasonable prices on groceries,” says White-Longworth. “We try to do that to develop some consistency so consumers understand we aren’t the old-fashioned, high-priced convenience store chain that is out to gouge every penny.”

GasAmerica is able to track its sales and target its promotions because the company has installed the latest technology in its stores.

“We’ve been 100 percent scanning and pulling our data for 10 or 12 years now,” White-Longworth says. “That provides us with a tremendous amount of data. We’re pretty detailed, down to the per-store measurements. We have all of our data down by transaction, by time, by item, by person responsible for the sale. So we have a huge amount of data to manage.

“We have systems here that will pull that information constantly. We put a lot of effort in trying to stay ahead of the curve. We know we’re a smaller business, but we think it’s important not to fall behind on that.”

Of course, having the information and doing something with it are two entirely different things. White-Longworth works hard to make sure those people who need the information get it.

“Each manager can go in there and look at (the data),” she says. “It may be the store that is having a problem; it may be the vendor’s out of stock. The retail department has access to that data so they can look at their specific areas of responsibility, such as shortages or low sales or not asking for the loyalty card. Each department has access; we’re pretty open within our company on our data in terms of sharing that information and allowing people to get to whatever it is they specifically need to do their job.”

Despite the technology, it is still the people in the stores who have the most direct impact on customers.

“That is part of the reason we went to computer-based training (so) we could systemize that instead of counting on our managers specifically,” White-Longworth says. “Standard procedures, such as carding for cigarettes, the same information goes out to every employee that we hire.”

A manual and an intranet site give the more than 800 employees access to routine human resources information. It’s all part of keeping a consistent culture throughout the organization.

“Culture is formed around the values you have and living by those values,” says White-Longworth. “We do an annual strategic planning session. From that, we set individual goals for every department. Those goals are shared companywide across departments.”

Goals are always in alignment with the culture and the values the company is trying to promote. And White-Longworth issues an annual statement to employees that includes the company’s vision, mission, values and goals.

“We always talk about those things,” she says. “We try to make our performance measures tied to those things.”

Competition and differentiation
In recent years, GasAmerica has faced increasing competition, often from nontraditional retailers that can afford to sell gas at a lower cost. Wholesale clubs have invaded areas in which the company operates, and that can greatly squeeze profit margins.

“Gas margins are very unpredictable,” White-Longworth says. “They fluctuate rapidly, day to day. Our No. 1 priority is to not overly rely on them. (We have an) in-store focus; inside is a much bigger focus for us in terms of where gross profit comes from. The main product we sell is convenience. There is always going to be a certain segment of the market that will go to those types of shops. We are trying to play our cards to the group of people that are mostly interested in convenience at a competitive price.

One way GasAmerica attracts those customers is by having the best locations. “There’s only going to be so many wholesale clubs in an Indianapolis market whereas smaller stores can sit on many corners and be more convenient,” White-Longworth says. “Competition is an ongoing thing. We know they’re going to get a certain piece of the pie, and it’s our goal to hold on to as much of the pie as we can by treating our customers in the best manner possible, by running an ethical business.”

Another way to keep customers loyal is to give them something the competition doesn’t.

“We try to be innovative,” White-Longworth says. “We’re one of the first marketers in the state to offer E85 (an ethanol fuel for hybrid cars). We try and stay ahead of the curve.”

White-Longworth recognizes the market for alternative fuels is not a big one yet, but innovation means taking risks.

“It’s not starting out profitable,” she says. “It’s something that’s coming in the future; it’s more environmentally friendly. Those are the kinds of things you have to make an investment in at the start and watch them grow.”

GasAmerica also keeps customers through its Convenience CARD program, which offers discounts and an opportunity to turn points earned for purchases into savings.

“I believe we were the first convenient store chain to have a loyalty program,” White-Longworth says. “It’s been really successful. From our estimates of where we started, we’ve signed up five times the number of customers than we had originally budgeted to do. It’s certainly changed the way we do business. We do know that people that join that loyalty program are more apt to visit more often and they’re more apt to spend more when they’re there.”

With loyal customers, a focused strategy for growth and nearly a decade of experience, White-Longworth is no longer a timid leader.

“When we were newer in positions, it was a little scarier; we weren’t as prompt to move sometimes,” White-Longworth says. “I’m sure we cost ourselves a few opportunities in the past. We take our chances a little better.

“You have to be afraid to not make a decision. You won’t always be right, but if you make one, at least you’re moving forward. If you make those decisions based on ethics and making the right decision, you come out OK.”

HOW TO REACH: GasAmerica, (866) 427-9900 or www.gasamerica.com