Two C-Store Veterans Explore COVID-19 Disruptions

Kevin Smartt of Kwik Chek and Gray Taylor of Conexxus discuss what lies ahead to wrap up the Conexxus conference.

August 18, 2020

By Kim Stewart

ALEXANDRIA, Va.—Amid all of the uncertainty around COVID-19’s impact on the convenience and fuel retailing sector, one thing is clear—no one knows how the pandemic will end, but there’s no question it has changed society. So, convenience retailers need to be ready to flex to serve customers when and how they want to shop—whether that’s via an app, through curbside pickup or the conventional in-store experience. Those are some of the key takeaways of the final day of the Conexxus Annual Education and Strategy Conference, which was all about disruption.

The three-day virtual event wrapped up August 13 with a candid Q&A between Conexxus Executive Director Gray Taylor and Kevin Smartt, CEO of Austin, Texas-based Kwik Chek, who is chairman of Conexxus and a member of the NACS Executive Committee. Smartt is also the owner and CEO of McCraw Oil Company, a fuel wholesale distribution company; McCraw Transport, a fuel delivery company; and Texas Born, a food product company.

“Here’s the truth nobody knows,” Smartt told Taylor and the conference goers. “We’re still in the middle of it [the pandemic]. I keep telling my team that. We’ve had more strategic meetings since this started than I’ve had in the past three years. We have to understand where we are in this process,” he said.

For convenience retailers, “We’re strong enough to be essential business, to keep our doors open,” Smartt said. “We’ve had to deal with the hurdles of keeping our workforce safe and keeping people employed and finding people to work. There’s many out there who haven’t had that opportunity.”

Smartt traveled to Washington, D.C., to testify May 12 before a Senate Judiciary Committee hearing that examined liability for essential businesses that have remained open during the COVID-19 pandemic on behalf of NACS and its members. He was the only member of the retailing industry invited to testify. Read full coverage in “Mr. Smartt Goes to Washington” in the July 2020 issue of NACS Magazine.

Congress still hasn’t acted to provide regulatory relief. “If you’re listening, I would encourage you to reach out to your senators and express support for liability protections for businesses who have been working during this pandemic,” Smartt said. “Kudos to NACS for helping facilitate that for me during the pandemic.”

Pandemic Concerns

Taylor asked, “What were some of the gut-wrenching things your team had to rally together and pivot really quickly?” All of Smartt’s businesses were considered essential, so there were several areas that needed addressing immediately.

“The first one really was safety, sanitation, cleanliness immediately in the stores,” Smartt said. “Our company did a great job, we formed a safety task, a COVID task committee, that started having calls daily talking about steps, precautions, what we had to do, trying to get our arms around CDC guidelines. What those guidelines meant. It was complicated. It was a fast-moving target every day,” he said. Kwik Chek’s corporate team also had to get up and running for working from home.

With “650 folks on the retail front line,” Taylor said, “how did the pandemic hit your staff?”

Kwik Chek has had just two positive COVID-19 cases in its stores as of last week, and neither of those cases were severe, Smartt said. His teams have worked through a range of conditions, with additional layers of pressure.

“We’re in a lot of small rural towns,” Smartt remarked. “If we’re not open, they may be driving 30 to 40 miles to get essential items. We felt the pressure to continue to serve our customers. We took the essential business to heart.”

Face masks can be contentious if customers don’t want to wear them, despite signs in stores indicating they are required. So how does his staff respond?

“If the customer still opts not to wear a mask, I’ve told my staff, ‘you’re not the mask police. Your safety is more important to me than the other.’ I feel for them. It’s been difficult. They take tongue lashings from customers who say, ‘why aren’t you enforcing the mask law?’ I try to handle some of these situations myself. For me, it’s not political. It’s about employee safety.”

He said Kwik Chek has faced some challenges in hiring and staffing because of the extra $600 a week unemployment compensation stimulus that expired at the end of July but also acknowledged that extra money in consumers’ pockets benefits retailers, too.

“I kind of have a stake in both sides,” he said. “From a hiring perspective it’s difficult. I’d like to see some modification. Honestly it’s been good for us. It’s injected capital into the community…Foot traffic is down but sales are up.”

Pantry stocking has been good for sales. “The beer category has been up substantially during this. Those typically who enjoyed getting a beer with dinner, I think has pushed some of those consumers to convenience stores and grocery stores,” Smartt said.

“We are seeing some shift in categories. Our HBC [health and beauty care] sections have increased. A lot of our more grocery staple items have increased, milk, eggs, bread. I think that’s indicative that the consumer is saying, ‘If I don’t have to go to the grocery store, I’m just going to go here and stock up, get my 12 packs, my milk here.’” Kwik Chek also is seeing good demand for the take-home meals stores added during the pandemic.

Future Forward

Taylor asked Smartt to share “some of the key things you’re looking to do in the future that might make some lemonade out of lemons.”

Kwik Chek plans to “lean heavy and hard into the future,” Smartt said. The company is continuing to enhance the Kwik Chek mobile app and loyalty program and is planning to roll out mobile food ordering and in-store ordering. “We hope to have that up by Q3 or Q4 of this year,” Smartt said.

“We’re already testing mobile checkout with Skip,” and all new Kwik Chek locations will offer curbside pickup, he said. The c-store is exploring drive-thrus, too, “either traditional or drive-thru for just pickup.” New store designs might include walk-up windows and extra outdoor seating areas.

Looking at the industry as a whole in transition, Smartt encourages retailers to “lean forward into technology.” Digital age verification will be an important focus, he said. “Cannabis will come back on the radar in more states because I think they are going to need funding [in terms of tax revenue]. Digital age verification will help us get into that space if you want to be a player.”

Embracing mobile payments is a critical area of growth, as well. “I think every convenience store in the U.S. should have mobile payment,” Smartt said.

Content, learnings and networking at the Conexxus Annual Education and Strategy Conference tapped into a central theme of “Surviving & Thriving in the Age of Disruption: How We Responded to the Pandemic.” Look for more coverage in NACS Daily this week.

Kim Stewart is editor-in-chief of NACS Magazine and editorial director of NACS.