In our CLVG conversation with NACS President and CEO Frank Gleeson, Don McKenzie, CEO of The Imagine Group, asked whether supermarkets were still putting in gas facilities. In Texas, where Eva and I are based, we’re still seeing grocery stores that have an established fuel program continuing to install fuel dispensers where they have the space. It’s the same companies repeating their existing business model.
If a grocery company is not already in the fuel business, we haven’t seen them adding dispensers. My feeling is that the established players have developed fuel purchasing and customer loyalty programs that make the fuel program economically viable, whereas it is hard for new entrants to get into the business.
A more recent development is that H-E-B, the leading grocery retailer in Texas, is replacing their gas kiosks with convenience stores called Fresh Bites in their parking lots. These stores are offering the basic convenience package of snacks and cigarettes along with dairy and other household essentials. They are also heavily promoting fresh and ready-to-eat meals which are coming out of the adjacent supermarket’s kitchen. It’s how H-E-B is trying to compete in the convenience category since their stores are getting so large. These stores are co-located with the H-E-B plus supermarkets, one of H-E-B‘s largest formats.
I don’t know how successful the Fresh Bites program is, but it is interesting that H-E-B recognizes that convenience (in this case defined as time expenditure) is important to their customer base and is something that their larger stores cannot provide.
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