Akhtar Hussain:
Thank you very much, Jeff.

Jeff Lenard:
an you give us a sense day to day what your job is like at Cenex in working through solutions for people who are involved with Cenex?

Akhtar Hussain:
Absolutely. I’ve been working with the Cenex brand in a marketing function for 15 years now. It’s been really exciting to see the evolution of the brand and all the changes that the brand has undergone since I started 15 years ago. There’s three main components to my job. One is coordinating and directing the marketing and advertising efforts for the Cenex brand. The second is responsibility for the branded incentives that are paid to the Cenex branded marketers. And third is running the retail image and equipment department that facilitates the brand transitions to Cenex.

Jeff Lenard:
I would imagine that includes a lot of time on the road visiting stores and seeing how they’ve changed as you continue to roll out the LIFT Initiative that is a big part of the Cenex offer.

Akhtar Hussain:
The opportunity to see stores and visit with our direct customers is a fun and exciting part of my job. I love getting out into the country and taking a look at how the Cenex brand stacks up against other competitors. You see the innovative ways that our Cenex marketers are leveraging the Cenex brand in their local community. When I can get out of the office, it is a fun aspect of my job get in the field and see how that looks.

Jeff Lenard:
Gas prices have come down a bit from their peak in June but they’re still elevated. How might that change consumer behavior as they look for value? I’ve heard some perspectives that say the idea of Walmart is more attractive because people are more willing to go out of their way for bundle shopping experiences. On the other hand, I’ve heard from retail experts who say that this is an opportunity to really connect that you are in a community and you’re able to keep people from driving further out of their way because you have everything they need at a time of elevated gas prices. I assume that based on the community and based on a specific situation, they’re both right. But from your perspective, as you look at stores and you talk about the Cenex promise, how do those two apparently opposing positions also align because they are unique to different areas?

Akhtar Hussain:
That’s an interesting perspective because I completely agree with you. I think that the community and the needs of those community members really shape the retail landscape and the businesses that those consumers are going to patronize. For the Cenex brand, we see this as an opportunity to further solidify our commitment to the communities we serve, regardless of the consumer preference, in terms of whether they’d rather go to a big box store or whether they would rather stay a little bit more local and have more of a convenience oriented experience. Coming out of the pandemic, we did see large shifts in consumer behavior towards using local convenience stores for more than they had maybe five to 10 years ago with the non-essential business closures. Cenex stores in their communities really became depended on differently by the consumers in their markets. And now coming out of the pandemic where we’ve seen a rise in energy costs, as you explained, that doesn’t really change our commitment to delivering high quality goods and services to those communities. Whether that be our top tier gasoline, or whether that relates more to the convenience offering in the stores and offering consumers that higher level shopping experience.

Jeff Lenard:
A critical component of the offer is consistency. And it has to be something that people trust. You’re going to have clean stores. You’re going to have employees who are happy to be there and happy to serve customers. You’re going to have trust that they have great relationships with vendor partners to ensure that as few customers as possible notice any of the supply chain outages. So I would imagine trust is a word that you and others on your team talk about a lot. How do you communicate that offer and how do you live that offer that at your stores?

Akhtar Hussain:
Trust is a huge element along with consistency, comfort, safety and fair prices. I think all of those things shape consumer expectations. Our stores are locally owned and operated. The people working in the stores, the people owning the stores, or the companies that own the stores have great reputations in their community. And so really it’s sort of a layering effect. We partner with local businesses and local business owners who share in this commitment to community that the Cenex brand has. So for us, it’s just leveraging those strengths. Consistency is an interesting one for us because the Cenex brand exists in a variety of communities in a variety of different types of cities and metropolitan areas. We’re in some very rural areas and we’re in some not so rural areas and the needs of those communities are vastly different. For us consistency hinges on the product quality of our energy products, our gasoline and diesel fuel, but it also means consistency inside the store. Now that may not equate to the same foodservice offerings, the same footprint or the same size store; however, consistency does mean friendly service, high quality products, fair prices and high level customer service. That is something not only through our brand promise, but also through the LIFT Initiative that is demonstrated at the consumer level.

Jeff Lenard:
Our industry is known for developing new stores and new offers and constantly evolving with the times. You don’t see many stores that are 50 years old. You constantly see stores that evolve to the next generation and with Cenex, the next generation is this LIFT Initiative. Can you talk about that?

Akhtar Hussain:
There’s two components to the LIFT Initiative, and this is a project that we started two years ago. It’s the single largest investment that we’ve ever made in the Cenex brand. One is the exterior image. Tis is the image on the forecourt, the canopy, the price sign, the gas dispensers, and that new image that we’re rolling out is called the halo image. The halo image brings an enhanced lighting element to the forecourt with a 360 degree light band, additional accent LED logos throughout the canopy as well as in many cases, the installation of LED canopy lights. So the focus here is just on offering a modern, bright, safe looking forecourt environment for travelers and trying to grab their attention while they’re on the street.

Akhtar Hussain:
In all the discussion we’ve had about evolving consumer expectations and the different ways that consumers are engaging with their local convenience stores, we knew that was not all we had to solve for. It’s a very competitive market right now. There’s an emergence of local convenience brands as well as strong competition by the major oils for the local business owners’ sites. We knew that we had to come with a solution to help improve the inside of the store, and that was equally important to the outside of the store. The other component in addition to the halo image is an in-store loan program where we offer 0% financing for our local store owners to invest in their facilities. We think by partnering with our local stores and offering them this capital that we are not only solidifying our commitment to the community, we’re developing trust on that business level with our business partners, understanding that we want to be successful with them into the future.

Akhtar Hussain:
We want to be that store in the community. That is a source of pride both by our business partners as well as the consumers in those markets. We’ve seen some really exciting projects through the in-store loan program. Everything from renovations to modernizing their foodservice offerings, introducing digital menu boards and other sorts of digital advertising in the store, installation of walk-in beer caves as well as self checkouts. Self checkout is a relatively new phenomenon in the convenience store industry and we have several stores that have decided to take that leap and provide consumers even more choices as it relates to how they want to engage with their local store.

Akhtar Hussain:
One of our success stories recently is we did a rebuild in Merrill, Wisconsin. We did a large renovation project where we added a bait and tackle section. The store is next to quite a few lakes so there was a lot of local fishermen in that market. They took that opportunity to differentiate and designed the store around the community in terms of the style. They have a log cabin inspired exterior. It definitely has that kind of north woods look to it, which again makes it fit into that market and attracts those consumers. That consistency means different things. For us, the consistency is around serving the community in the way that the community expects and delivering that with a high level of customer service.

Jeff Lenard:
You touched upon the two key things essential to retail: Getting customers to the store and then getting them to come back.

Akhtar Hussain:
I think that that’s why we’ve built this program with such flexibility. The halo portion of the LIFT Initiative, that forecourt upgrade, that is a required upgrade and we expect to have all 1,450 Cenex locations upgraded to that image in the next 24 months. However, where a lot of the choices and a lot of that flexibility comes into play is in that interior, that interior loan portion of the initiative. It’s because we know we have large stores, we have small stores, we have stores in suburbs, we have stores in extremely rural areas and we cannot take a one size fits all approach. So by allowing this flexibility, both in architecture style and amenities, we are allowing our local business partner who should be the expert and who is the expert in understanding what their local consumers want and need more so than the Cenex brand from the standpoint that we are at. We think that flexibility is what is really key here and committing to being that long-term business partner and being that partner to the communities that we serve. We think that the in-store loan portion of this is really what differentiates the Cenex brand and our business partnership proposition. We want our local businesses to succeed. We want to partner in that success and we’re seeing the fruits of that in the first two years of this program.

Jeff Lenard:
The two years that you’ve rolled out the program have also coincided with two very bumpy years in terms of everything retailers are facing from the litany of challenges that started with a pandemic in early 2020. I would imagine that one of the lessons as you roll out this new brand is that by buying into a long term vision of the future, you might be able to weather some of these unexpected hiccups and not be as reactive to the unexpected as we will continue to face the unexpected over the next few years.

Akhtar Hussain:
That’s absolutely correct. The LIFT Initiative was in the planning stages in early 2018 and when we came to the fall of 2020 when we were going to launch this program, obviously we were in living in the new reality of the pandemic and working from home and consumers driving less. However we knew this was a long game and we were confident that we would pull out of this and we saw the opportunity to pull out of this situation with strength and with wind at our back. Whether that was a little bit of luck or being really good, we’ve arrived there. We’re coming out of the pandemic with a much stronger brand than when we were going in, we’ve got some fantastic newly renovated assets all throughout the communities that we serve and we want to instill that trust, develop that level of customer experience and consistency with both our consumers and our business partners and we’re really excited about the momentum that the Cenex brand has into the future at this point.

Jeff Lenard:
How can people learn more about Cenex and the LIFT Initiative?

Akhtar Hussain:
There are two years left of the LIFT Initiative and we are well on our way to renovating all 1,450 Cenex stores in the network. Whether you are in the Cenex family now and have more questions, or whether you are not in the Cenex family and considering a new brand, visit cenex.com/lift to learn more about the LIFT Initiative.

Jeff Lenard:
Thank you for joining us, Akhtar.

Outro:
Convenience Matters is brought to you by NACS and produced in partnership with Human Factor. For more information, visit convenience.org.

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