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Custo
I
t was the equivalent of a solid B, a
grade many college students might
study their hearts out to achieve.
But when Sheetz Inc. scored 86.3% in
the CSP-Service Intelligence Mystery Shop
back in 2005, the company took notice and
committed to some serious homework.
This year, Sheetz moved to the head
of the class.
“The survey really ticked us off; it got us
going,” says Travis Sheetz, vice president of
operations, of the 2005 experience.
The results six years ago were surprising to the broader c-store community, which for about two decades had
consistently ranked Sheetz among the
industry’s elite, in large part because of its
robust foodservice business and a strong
family-run culture.
The Sheetz gang, spanning three generations, saw a hole exposed in the 2005
mystery shop. In short, Sheetz was a great
brand with a great motif and product, but
with only a good to very good execution
of fundamentals.
A grueling six-year effort has changed
everything. According to the 2011 CSPService Intelligence Mystery Shop results,
Sheetz not only was the only company
among 10 major regional chains to top
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omerz Firzt
Sheetz’s customer-centric retooling pays off
with CSP-Service Intelligence Mystery Shop win
By Linda aBu-ShaLBack Zid || [email protected]
PhotoS By JoShua SykeS
90%, but it also ranked among the highest
in the five major categories—customer
service, exterior and interior cleanliness,
merchandising and employee appearance.
It also finished in the top three or four in
virtually all 27 metrics examined in more
than 110 specific shopping episodes, covering all time segments. (For a detailed
report on the mystery shop, see Samantha
Oller’s story on p. 45.)
Yet for the 394-store, Altoona, Pa.based Sheetz, it’s about more than
improving scores. It’s about the passion
behind this family-run company’s efforts
to better serve its customers.
ness, specifically providing greeting and
parting remarks, is absolutely critical to
a mystery shopper’s indicating a likelihood of recommending a location to
others,” says Marie Boucher, market
research specialist for Charlotte, N.C.based Service Intelligence Inc., which
conducted the mystery shop in partnership with CSP. “There is just no other
single metric in my experience that has
“We are operators, and our
name is on the building.
We do not manage the
sites as a portfolio of
assets; we try to manage
cuStomer care
each of them like they are
Ask Travis a question about any Sheetz
our only store.”
Inc. strategy—foodservice, cleanliness or
stock—and his answer will circle back to
one thing: customer service.
Travis’ enthusiasm, echoed by other
company executives, resonates on
the ground level. During guided and
unguided store visits, there’s a communal
energy in the air, with regular customers chatting easily with employees about
local gossip and town matters.
That friendliness is found throughout
Sheetz’s six states of business. “Friendli-
a higher correlation with our shoppers’
positive reactions to locations.”
Indeed, on five questions centered
on the cashier’s interaction with the
consumer and overall professionalism,
Sheetz scores 95% to 100%. Only two
other chains—Kwik Trip and QuikTrip—
achieved such numbers. Not surprisingly,
each is a two-time winner of the CSPService Intelligence Mystery Shop.
Smiles and friendly service are just
part of the Sheetz equation, though. Back
in that 2005 mystery shop, Dan McMahon, executive vice president of operations, took results of the company’s lower
placement in speed “very, very heavily,”
according to Travis. “That was one of
those things that through growth and
over time sort of came off our radar.”
First, the company’s IT team coalesced
to accelerate credit transactions. “Literally,” says Travis, “by the time you hand
[the clerks] the card and they swipe it,
that receipt is printing out immediately—and you’re able to get in and out
of the store very quickly.”
Next, Sheetz implemented a “3-to1” ratio of customers to open registers.
“That’s a metric that our employees can
identify, and it will tell them when they
need to go up front.” Some employees, he
explains, initially felt it was a weakness to
ask for the help. “So we want to strip that
away. That’s been a challenge, too, but
we’re much better.”
To further usher in a speed-and-service
culture, the company now assigns a store
manager to the front registers to quickly
address any issues that might arise. While
there’s some allowance for issues elsewhere
inside or outside of the store, Travis says,
“Unless there’s something we want them
specifically to take care of, we want them
front and center.”
To accomplish this, Sheetz took some
paperwork and other management tasks
away from management responsibilities,
and grouped other tasks for the managers
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Working for Sheetz
A sign in the Murrysville, Pa., store says the company is hiring at $8.75
an hour. Pennsylvania’s minimum wage is $7.25. A glance at the
Sheetz website shows that the company pays “in the top 10% of all
like retailers in the industry,” along with providing many benefits, such
as college tuition reimbursement, an employee stock-ownership plan,
company-matched 401(k) and a bonus program.
At press time, the company had 14,500 employees, and turnover
was at less than 50%, compared with the 60% industry average
reported in CSP’s NACS State of the Industry issue.
And of the six states that Sheetz operates in, it is included as “Best
Places to Work” in four. (Maryland and West Virginia do not yet participate in the Best Places to Work program, from the Best Companies
Group.) Some of the factors behind Sheetz’s remarkable people culture:
Bonuses and awards. Employee bonuses are based on regular
customer service shops and quality assurance (QA) audits that happen
twice quarterly—both of which focus on the customer’s experience. “In
our internal shops, the focus is on speed up front, as well as service,”
says Travis Sheetz, vice president of operations. “Our shop is really an
attempt to mimic what a customer might be experiencing when they’re
inside your store.” Shops also might include in-stocks, interior and
exterior cleanliness, foodservice presentation and accuracy and speed.
In addition to bonuses, awards are given to top-scoring stores
during a year-end celebration. “So it’s highly competitive within our
culture. One thing we do know for a fact is that our customer service
shops that we do drive behavior, without question. If we decided we
were going to measure anything you could think of in that shop, you
would see the next day everything changes in those stores.”
training. At Sheetz, the standard training program is about 80
hours, consisting of several modules of computer-based and store
training to ensure everyone is trained in all aspects of the stores: point
of sale, foodservice, making specialty coffee drinks. Employees are
assessed by each module before they can work in those areas.
What to Wear. In the mystery shop, the company topped the list
in employee appearance. Still, employees are allowed to wear jerseys
of their favorite teams on the days they are playing. Travis says, “What
we’ve tried to do is balance having a uniformity and having certain
standards that we require, and then, on the other hand, letting people
feel relaxed in what they wear to work.
“It’s a new world out there. These aren’t the days where people
were wearing the ties and the aprons to work anymore,” says Travis,
who at 41 is a reflection of the company’s generation change and the
stores’ evolving customer base “It’s important for them to express
themselves through what they wear, and so we try to allow some
of that.”
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to do at the end of the shift. Because the managers are at the
front of the store and can see everything that’s going on, they
also can direct labor more efficiently to meet customer needs.
Other areas where Sheetz scored high marks are also tied
directly or indirectly to the company’s intense customer focus:
exterior cleanliness, in-stocks, merchandising and signage, and
offering loyalty card membership.
▶ outside in. When discussing Sheetz positively, just about
all of the mystery shoppers mentioned cleanliness (specifically
the forecourt) and availability of pumps/forecourt size. “Outside, the parking lot areas were clean,” one shopper said. “The
pumps were clean and properly maintained.”
At higher-volume stores and stores with large exteriors, Sheetz
has a dedicated facilities employee, focused on outside and inside
cleaning for an entire shift. At lower-volume stores, the duties are
split among employees as part of a checklist or “shift walk.”
The company’s emphasis on the exterior, which Travis calls
“the front porch,” is driven by a desire to conquer preconceived
notions people might have of gas stations. “We just try to look
more like a foodservice place, and the outside is as important as
the inside,” he says. “And what you see when you first drive up,
that first impression—it’s hard to change that.”
The company scored a 96.7% on exterior cleanliness, and
an also-impressive 95.5% on interior cleanliness. Steve Sheetz,
chairman of the board, says that first impression also applies
to inside the store for customers on the go—particularly in the
restrooms. Signs in the restrooms encourage customers to call the
company if they aren’t satisfied. “We want that feedback and it’s a
constant challenge, because our restrooms are used heavily,” Steve
says. “Our restrooms are a big part of why people stop at Sheetz.”
▶ Stocked and ready. Another strategy to enhance the
customer’s experience is “focusing heavily on 100% in-stocks.”
And that is obviously working, because Sheetz scored 100%
on having the fountain drink/slushy area stocked and 100%
in having the coffee area stocked. For coffee, the company has
implemented a beverage hostess who keeps coffee stocked and
fresh for four hours every morning. “They also greet customers,
and they’re very recognized by our customers,” Travis says.
The company scored 98.2% in having the cooler doors
stocked, a more than 3% difference over the nearest competition. The company’s own customer service shops, which drive
employee bonuses, are behind those efforts. “We look at all the
slots and how many you have and you get points deducted based
on how many empty slots you might have,” Travis says. “We do
the same thing with candy.”
▶ Seeing Signs. “Holy Sheetza Pizza” signs at the stores
offer a medium pizza and a 2-liter soda for $4.99. Another lifesize sign will “triple dog dare ya’” to try a frozen Sheetz Bros.
Coffeez specialty beverage—courtesy of the company’s “highly
creative” internal brand team put in place several years ago. The
company came in second for merchandising and signage on the
mystery shop, with a score of 94.6%. “We have a lot of flavor and
entertainment in our marketing and in our signage,” Travis says.
▶ Lauding Loyalty. At press time, the company was putting the finishing touches on spreading its MySheetz loyalty
card companywide (after testing for nearly two years in North
Carolina and Ohio). Sheetz also had the highest score (38.74%)
of cashiers mentioning loyalty/rewards programs or company
credit card, likely driven by the new loyalty program (although
Sheetz has both). “Employees really jumped on that,” Travis says.
“We incented them in the beginning, and it’s a natural part of
their greeting at the register.”
The program’s savings include 3 cents off every gallon of gas,
and offers centered on Sheetz Bros. Coffeez and foodservice.
When the company launched its Sheetz-branded peanuts about
a year ago, it loaded a free bag onto every loyalty customer’s
card. “It’s a good way to sample free items you want them to
try,” Travis says.
On a side note, the company has been looking more at doing
private-label items. “We have with our kitchen the ability to
do much more of it, so we’re researching it more than we ever
have,” Travis says. “But just because you can put your name
on it doesn’t mean you can always do it cheaper. Our primary
business is the retail business, not the manufacturing business.”
The Road Warrior
It evolved from my conversation with a gentleman on the plane to
Pittsburgh. Being from the Midwest and never having experienced a
Sheetz, I was curious about what he thought of Sheetz stores.
“I have one friend who goes there all the time for their sandwiches;
he thinks they’re the greatest,” he said. “For me, they have a clean
bathroom and a good cup of coffee.”
When I told him I was driving two hours east from Pittsburgh to
Altoona, and hoped to stop at one, he laughed and said, “You’ll see
plenty of them along the way.”
The “game” I invented for myself from there was simple enough:
Stop at every Sheetz location on my journey, to see firsthand what made
this company this year’s CSP-Service Intelligence Mystery Shop winner.
I approach my first Sheetz ever in Murrysville. I’m struck by how
many people are hanging out at the tables outside. The mood is festive,
like an ice-cream social, rather than a parking lot.
I realize I have no cash on me, and notice the “surcharge-free”
cash station. Now, that’s just nice. Later, Travis Sheetz, vice president
of operations, explains to me that they do that as a traffic generator.
“People would come here as a destination to get money, and then
spend some while they’re in here,” he says.
And as if to prove that point, after getting my cash, I apprehensively
approach the ordering kiosk I have heard so much about. As I scan
through the plethora of items (many such as fryz, sliderz, saladz and
flatbreadz), the man at the kiosk next to me is in and out in seconds;
he’s clearly done this before.
I get nervous and quickly add macaroni and cheese as a side, and
close out my order. Macaroni and cheese? “What kind of road warrior
eats macaroni and cheese?” I chide myself. (To my delight, it fits neatly
in the rental car cup holder—although I finish it before I get going,
Food For thought
In 2008, Sheetz opened that 140,000-square-foot kitchen commissary, The Sheetz Bros. Kitchen, in Claysburg, Pa., to deliver
fresh foods seven days a week. Again, that effort goes back to
customer service. “We had realized that we had our people doing
so much more than serving customers in the store,” Travis says.
Those duties included baking bread, cookies and other items, and
portioning out dressings for foodservice.
“That all went to the kitchen, because we can do all of that in
one place and then send those items out to the store—already
ready to go,” he says. “That’s a speed benefit at the store level and a
service benefit, because now our people don’t have to be as much
distracted by all that labor.”
The company also in July announced plans to open another
commissary in North Carolina, which will serve that state’s
because it is piping hot and good.)
In front of me is a middle-aged man in a long ponytail and leather
vest (there is a unique collection of families, biker types and teenagers,
all who seem to just somehow blend together as a “Sheetz community”), and there are many ahead of him. He teases the lady behind the
foodservice counter. “Denise, how about No. 780?” She laughs, and
asks him how he’s doing tonight.
It is now my turn to pay. The fellow behind the counter is young,
probably in his 20s. He smiles and is polite, but moves along at a steady
pace because the store is full at the late-ish hour.
I spot three other Sheetz locations along the way on my 111-mile
journey, and stop to fulfill the responsibilities of the game. And the
experience is pretty much the same at each. A jovial atmosphere in the
outside seating, customers joking with the clerks, a substantial product
and clientele mix—and smiling politeness for me, the Sheetz newbie.
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On the Grow
Sheetz plans to grow to 500 stores by
2016. The heaviest growth is planned
for North Carolina and West Virginia,
although about 40% will fill in the other
four states, according to Joe Sheetz, CFO
and executive vice president of store
development.
At press time, the current
store count was:
211
Pennsylvania
58
Serving it uP:
Sheetz has a 3-to-1
ratio of customers
to registers as part of the
company’s speed-and-service initiative.
Virginia
35
West Virginia
stores and also those in southern Virginia
and West Virginia.
Right in the center of a store near
Sheetz’s Altoona headquarters, Travis
points to a large refrigerated case. There,
Sheetz, known for its substantial madeto-order (MTO) selections, showcases
“ready to eat” foods premade at the commissary. Introduced about two years ago,
RTE (ready to eat) also segues back toward
the company’s speed initiative—but the
challenge is not to be the stereotypical prepackaged foods of ’70s c-stores. “It’s always
a risk,” Travis says, “because you’re going
back into time to a business. But I think
what we had to do and what helped us do
it is that we were proven to be a good freshfood provider, and that gave us license to
go back into that kind of world.”
The RTE case also allows the company
to sell healthier products, with fresh-cut
fruits and vegetables readily visible to
customers. While the items are selling
well, he says, “from a healthy standpoint,
the ready-to-eat case has really helped
us, given us a lot of credit in that world.”
Douglas Mills, director of foodservice
sales and development, says, “By offering
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some healthier options, we feel we can
better extend ourselves to a clientele that
may not always [have been] identified as
the ‘typical c-store shopper.’ ”
Sheetz carries staple healthier items
such as turkey subs, signature made-toorder salads and steel-cut oatmeal with
sliced apples. “But we’ve also recently
gotten into more unique items in our
ready-to-eat cases, such as melon fruit
trays, hummus with crisps and sugar-free
gel bites for the more health-conscious,
on-the-go consumer,” Mills says.
In an industry in which tobacco
continues to dominate despite efforts
to diversify, Sheetz is the anomaly and
perhaps a barometer for where the convenience channels need to pivot. Food
and beverages account for close to 50%
of company sales. And while having
healthier options has enhanced those
sales, across from that RTE case is one
filled with doughnuts and bakery items,
also delivered from the commissary. “We
believe that it’s beneficial for our consumer to have a wide selection of choices
in both healthy and comfort-food menu
options,” says Mills.
31
Ohio
31
North Carolina
28
Maryland
Total
394
Having both signature MTO kitchens
and RTE options at the stores, Mills says,
“allows customers to choose from either
a healthier item or a treat or indulgence
if they like, such as chili cheese dogs or an
Oreo Cream Smoothie. The same guest
may fill either occasion, in some cases
depending on time of day, or day of the
week—or just the mood they may be in
that day.”
The company continuously revamps
both offerings, Mills says, rotating seasonal items as well as keeping with current trends in the marketplace. Recently,
the company introduced a healthieroption EatShmart! Line, debuting a Tus-
Talking ‘bout My Generation
There are three generations in management at the Sheetz family business. Louie Sheetz, vice
president of marketing, says Sheetz is in “very private” discussions about succession plans
throughout the organization. “We have made it a much more conscious effort to think about what
it takes in every position in the company, from director position up to the front-line leadership
team,” which includes about 40 people, he says. Current efforts include looking at job qualities
and skills that each position involves. Of Adam and Ryan, the two latest family members to jump
on board, Louie says, “There’s two potential leaders for our company.” But just because your last
name is Sheetz doesn’t mean you work there. “Although they’re encouraged to learn and work
for the company, they’re encouraged to find a career path that fits them; that’s not necessarily
going to be a fit for everyone,” Louie says. Growing up Sheetz also doesn’t mean you won’t work
hard. “People in the organization might think you’ve got it easy. But there is a healthy pressure to
work harder than anyone else, and prove your contribution with your work,” Louie says. “We don’t
dwell on the fact that we’re a family business; we’re a business and we love what we’re doing.”
Louie Sheetz
Vice president of
marketing
The youngest of his
generation, Louie has held a number
of roles before settling in as vice president of marketing for the past 25 years.
Steve Sheetz
Chairman of the board
Louie calls Steve the
company visionary. While
his direct responsibility is overseeing petroleum transportation, he leads many projects
around innovation and is currently focused
on the company’s new drive-thrus.
Stan Sheetz
CEO
Stan has been the
Sheetz CEO since
the mid-1990s. He is the son of Bob
Sheetz, the company’s founder.
Travis Sheetz
Vice president of
operations
As vice president of
operations, Travis is focused on speed and
customer service.
Joe Sheetz
CFO, vice president of real
estate and development
This man of many hats
also oversees information technology at
Sheetz.
Ryan Sheetz
(Louie’s son)
Director
Ryan joined the family
business in May 2010 after completing his
MBA from Penn State. He is “on rotation”
at the company and will be working in
various roles to prepare for a suitable
permanent position.
Adam Sheetz (Stan’s son)
Director
Like Ryan, Adam joined in May 2010 after getting
his MBA (with a concentration in finance) from
Emory University in Atlanta. Like Ryan, he also will be on rotation.
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can Beef Wrap with less than 400 calories.
Another recent addition was that
Sheetza 12-inch pizza for $4.99—an
inclusion that is as much defensive as
it is to grow sales. “This pizza dinner
platform was something that other
QSRs have had recent success in. We also
thought it may be giving our current
regular guests a reason to go elsewhere
for their dinner options,” Mills says. “We
wanted to make sure we captured that
buying opportunity.”
groWing ForWard
By the time this issue of CSP is out, Sheetz
plans to have 400 stores—opening about
one a week throughout the summer. It’s
part of a dramatic growth strategy that
sees the company hitting 500 around
2015–2016.
The numbers are less about braggadocio than they are to extend the company’s
$4.5 billion in sales and retail reach, which
currently stretches across Maryland, North
Carolina, Ohio, Pennsylvania, Virginia
and West Virginia. The company has a
$125-million capital budget, which Joe
Sheetz, CFO and executive vice president
of store development, plans to grow to
$150 million in future years.
“We are not driven to hit some ‘magical’ size, and we want to grow only as fast
as our ability to continuously execute our
mission allows,” Joe says. “We are operators, and our name is on the building. We
do not manage the sites as a portfolio of
assets; we try to manage each of them like
they are our only store.”
And unlike scores of other accomplished companies that are growing
through rapid acquisitions, Sheetz will
stick with its tried-and-true ground-up
model. “We are willing to acquire ‘dirt,’ but
not operating stores,” Joe says. Available
stores typically don’t fit the company’s
Private Screening: Joe Sheetz shows off
Sheetz’s touch-screen ordering system for its
made-to-order (MTO) foodservice items.
foodservice model, which requires substantial room for a kitchen, freezer space
and other equipment. “Also,” he says, “our
culture is very important to us, so we like
to hire our own employees, train them
well and promote from within rather
than ‘acquire’ these human resources in
a transaction.”
In total, fiscal 2011 will bring 24 new
stores, and he explains what to expect of
those: “New stores will typically include
seating and larger restrooms. If the site is
big enough, you will see a car wash, a rear
entrance to access additional parking and
a drive-thru.”
Some further details:
▶ “dabbling” in drive-thrus. By the
end of 2011, there will be eight Sheetz
drive-thrus. Calling it a “proven concept”
at QSRs and coffee chains, Travis says it’s
more of a challenge at c-stores, because
of the gas pumps and the flow of the lot.
“It just makes things very busy and you’ve
got to be careful on how you design it.
“It’s also a challenge for us, because
of our platform,” he continues, “which
means every sandwich that we give you
is made to order and we have thousands
of combinations. We are committed to
our made-to-order platform, and so we’re
giving up speed because of that.” Travis
says Sheetz drive-thrus are about offering
convenience for customers, such as the
mother with the car full of kids or the latenight craver out in pajamas. “What we’ve
found is that there’s a market out there that
really appreciates the convenience in drivethrus, and it has nothing to do with speed.”
“What you see when you
first drive up, that first
impression—it’s hard to
change that.”
▶ rebuilds. According to Joe, other
growth initiatives include “tearing down
and starting over” on stores that are less
than 4,000 square feet, turning them into
stores bigger than 5,000 square feet that
emphasize foodservice. The company is
doing six to eight of those a year, and Joe
estimates it will take five to seven years to
complete. “However, it is like painting the
Golden Gate Bridge,” he says. “Once we
get to that point, we will have other stores
that have ‘aged’ and will probably have
an entire new crop of rebuild candidates;
we plan to always be rebuilding some
percentage of the total.”
▶ remodels. The company is also
remodeling some locations from “white
block” to the company’s now-standard
red brick, and putting in additional foodservice equipment and larger restrooms,
at a cost of about $500,000 to $750,000
per site. Joe says the company is on track
to complete 10 of those in 2011, with plans
to ramp that up to 25 to 30 per year and
complete the project in five to six years.
Altogether, the company’s plans annually over the next five years are to build
25 new stores, rebuild six to eight stores
and remodel 25 to 30. Plans for growth,
of course, don’t stop after those five years.
“Going forward,” Joe says, “I think
you will see us continue to build 30 to 35
new sites each year in the six states where
we already operate. We are not pushing the boundaries much right now, as
much as we are filling in markets where
we already operate. …There is still plenty
of opportunity in our current markets.”
inSide the Box
Growth will come from both a larger
portfolio and stronger year-over-year
returns. Anchoring in-store performance
and customer service will remain a focus
for Sheetz.
“Volume is a good thing and, obviously, you don’t want to get cleaner or
faster by losing volume,” says Travis. “So
the biggest challenge is going to be being
able to get faster and still grow volume.
And that’s why we’re trying to do things
like ready-to-eat sandwiches and why
we’re trying to create efficiencies in the
kitchen and with the drive-thru.
“We have to find a way to serve more
people at a faster rate. It’s easy to do one
or the other; it’s very difficult to do both,
but that’s what we expect of ourselves.”
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