Cooperatives refresh the gas station experience
Synergy Cooperative built a new Cenex branded retail location in Cumberland, Wis.,with financing help from the CHS LIFT initiative.
Should I take a right or a left? To some consumers, that’s the only consideration when choosing which gas station or convenience store to stop at to fill their tank or pick up a snack. But more customers now expect features like welcoming lighting, clean bathrooms and a variety of healthy and local snack options at c-stores. Cooperative c-store owners are stepping up to the challenge.
For Kyle Knutson, CEO of Synergy Cooperative, these amenities were musts when building a new Cenex® location in Cumberland, Wis. Busy with cabin traffic, the cooperative not only prioritized modern comforts, but also wanted to build a Northwoods themed store with vaulted knotty pine ceilings. “We wanted people to come into the store and say ‘Wow,’” he says.
To fund the project, Knutson partnered with CHS on its new LIFT initiative, a lighting, image and facilities transformation designed to revamp Cenex branded stores through a series of exterior and interior updates, along with additional loan funding for in-store improvements. The two-part initiative features exterior updates such as a new fuel canopy and lighting, but also provides financing for in-store updates. “LIFT allowed us to make the updates we wanted to. We’re proud to offer a top-notch experience for our customers,” says Knutson.
Synergy isn’t alone in updating its c-store experience. Cenex brand retail locations are owned by cooperatives across 19 states.To ensure those stores are also valuable revenue sources, cooperatives are using LIFT to make the stores more appealing to customers.
First impressions at the gas pump
Consumers want a well-lit spot for gas fill-ups, according to a study by GasBuddy, which found that gas stations with good outdoor lighting saw a 50% increase in foot traffic during nighttime hours.
“A bright, welcoming store helps attract people to our store, plus bright lighting helps our customers feel safe when they visit at night,” says Neil Graves, general manager of Prinsburg Farmers Co-op, which owns two stores in western Minnesota.
By the close of 2023, as part of the LIFT initiative, every Cenex branded store will receive a revamp to the all-new Halo forecourt image. The new Halo image includes improvements made to the canopy, forecourt and main ID sign, including a 360-degree LED light band, new Cenex logo signs and three-dimensional backlit blue arches.
“We knew we needed to brighten up our exterior canopies to be competitive with other convenience stores,” says Brad Van Overbeke, CEO, Farmers Union Oil of Southern Valley, which owns four stores on the North Dakota-Minnesota border. “The exterior upgrades enhance the brand presence and invite customers to stop at our stores.”
In addition to an updated exterior, the LIFT initiative also includes low-interest financing options to help retailers update store interiors.
Each store team decides what to update, from bathrooms to in-store coolers to food options to lighting. “The financing we got through LIFT to do in-store upgrades was huge to help us offset the initial cost of the site,” says Van Overbeke, whose cooperative built a new location with LIFT financing. “We went from a small store that wasn’t very inviting to an organized, attractive location. We’re seeing an increase in the number of people who come inside the store.”
That increase in foot traffic means more profit for stores by increasing sales of higher-margin products. “People now come into the store looking for a sandwich or ordering a pizza. Having a welcoming, clean interior has been bringing in new business for us,” says Graves.
More than gas station food
Attracting customers on a snack-finding mission is key to convenience store sales growth. In 2020, inside-store sales, which includes items like food and drinks, grew despite a decline in fuel sales, according to the annual Convenience Store News Industry Report.
What a store offers can make the difference. When Synergy Cooperative opened its new location, changes were made to accommodate locally made foods, says Knutson. “We added open-air coolers so we could offer local meats and cheeses.”
Changes in consumer expectations — such as 63% of customers saying they’d like to see more healthy foods offered in a survey by CSP Daily News — made retailers like Van Overbeke rethink food offerings. “We now offer salads, fruit baskets, subs and chicken sandwiches for those looking for healthier options. We had to rethink refrigeration and storage and the in-store loan program through LIFT helped us do that,” he says. “With about half of our business being passersby, meeting customer expectations related to food is key to growing our business.”
Next for the Cenex network
With nearly 300 Cenex branded locations currently undergoing LIFT initiative projects, the Cenex brand and cooperatives are ready to meet customer demands.
“We want to make sure the Cenex brand is well perceived by consumers. By investing in our energy brand, we’re supporting our cooperatives and the communities they serve,” says Akhtar Hussain, director, refined fuels marketing, CHS.
“LIFT gave us the opportunity to start over,” says Graves. “It feels good to give the community this gathering place, and it has responded positively. Everything we do is for our owners and our customers, and we’re happy to offer them something new.”
Check out the full Summer 2021 issue of C magazine with this article and more.