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Sheetz strategy - Listen to customers, instincts

Convenience store chain's president speaks at Chambersburg awards breakfast

Convenience store chain's president speaks at Chambersburg awards breakfast

December 07, 2007|By DON AINES

CHAMBERSBURG, Pa. - Why is it, Stan Sheetz was asked, that the price of gasoline at one of his family's convenience stores can be one price at one location and 10 cents higher at another store in the same town?

"We're greedy," Sheetz replied.

After the laughter died at Thursday's Greater Chamber of Commerce Annual Business Breakfast, he listed the real reasons. Sometimes it is just a matter of one store not having gotten the call to raise or lower prices, or reacting to nearby competition, he said. In other cases, such as older stores with small lots such as the one in Greencastle, Pa., "we actually have to price the gas so we don't choke the parking lot."

The company makes about 8 cents a gallon, and "if any of you want to operate on that kind of a margin, bring it on," he said.

In 1952, Sheetz's father, Bob, bought his father's store in Altoona, Pa., for $950 and eventually set a goal of opening 100, a milestone met in 1983. As of Thursday, there were 342 stores in six mid-Atlantic states and Sheetz is ranked 79th on the Forbes list of top privately owned companies in 2006.

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Sheetz ended 2007 with revenues of $3.9 billion, Sheetz said.

"I started when I was about 8 years old, sweeping parking lots," Sheetz said.

The company now employs about 11,500 people, he said.

Now the president of Sheetz, Stan Sheetz answered questions about how the company has grown and prospered. He described a strategy of listening to customers and following gut instincts.

"We don't really do much market research," Sheetz said, but the company does have monthly lunches with groups of about 20 customers. "We just sit down and talk with them and listen to what they have to say."

"We have people in there with spiked hair ... They're very creative folks," he said of the company's graphic design team. When it came to updating its logo, Sheetz held a contest among design firms and "we picked the one we liked best."

The company is adding french fries and other fried foods to its menu and is building a 140,000-square-foot food preparation facility to prepare food for the stores, including a bakery to produce rolls and 9 million donuts a year.

Sheetz was asked if that was the company's idea of a healthy menu.

"A lot of people talk healthy and eat fat and that's OK. We're here to serve," said the trim, donut-a-day CEO. He also noted that Sheetz offers 16 menu items under 400 calories.

Company milestones included Pennsylvania legalizing self-serve gasoline in the early 1970s, said Sheetz, which led to the installation of fuel pumps at stores that now sell 1.3 billion gallons annually.

A few years later, made-to-order (MTO) service began, and the addition of touch-screen ordering in the 1990s "drove our sales up dramatically."

Sheetz opened a distribution center in 2001 and now delivers about 80 percent of what is sold in its stores, including fuel, he said.

One person in the audience asked how the music in stores is selected. Sheetz said there are four Muzak programs employees select from.

"You're in there about two minutes. They're in there about eight hours," he said.

An employee committee also designs the uniforms, he said.

That smaller store in Greencastle is due to be replaced at the same location in a year or so, Sheetz said. As the company and its range of services has expanded, so have the stores themselves, with new ones being 5,000 square feet, he said.

Sheetz was asked what goals he has set as president.

"My goal is to just have fun," he said.

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