Taking Profit for a Spin.
Putting customers in the "dog house" is one way Anthony's Food Shop in York, Maine, plans to add some fresh profit to its business. Anthony's Dog House is the latest profit center for this New England beach-town single store, which has spun off a few successful "shops-within-a-shop" throughout its 19-year history - this one with its own separate banner.
Taking over the underutilized warehouse space from the main store, Anthony's Dog House is somewhat segregated from Anthony's Food Shop in that customers access it from an adjacent door in the same parking lot. The little shop was created by Anthony's last October for its canine-loving town, located about 55 miles north of Boston.
"We learned that York has one of the highest dog-per-family ratios around. Everybody here has a dog, and if you go to the beach, you'll see that," said Mark Graziano, the store's president. "We have a lot of kennels and groomers in the area, but there really wasn't an option for people to get holistic dog foods other than going to New Hampshire to one of the big chains."
So Anthony's Dog House obliged by stocking those types of pet food and other pertinent dog-care items, such as toys and leashes. Besides word-of-mouth, more customers are learning of the venue through advertising and functions with local kennels.
Business isn't booming yet, and that's to be expected, according to Graziano. He believes a good strategy for single stores undertaking alternative profit centers like this is to keep expectations realistic, as he has done.
"Anthony's Dog House is growing on a weekly basis and it's nice to see," he maintained. "I did not expect it to go crazy from the beginning. It's one of those things, a customer comes in, you treat them correctly, and they come back. It's like any other time we've started a new venture in this store. I have a three-year growth plan for it. I think it will grow at a good clip, but over time."
Long before the dog house concept, Anthony's blossomed - literally - into other defined profit centers; one being its extensive flower shop, which is open seasonally from Easter through Christmas. This one was an obvious extension for the business almost right from its inception in 1990, Graziano said.
"When we took over the property here, it was originally used as a seasonal fruit stand owned by a local farmer. There were two 96-foot greenhouses, or round hoop houses, that came with the building," he explained. "We started out saying, 'we own them, we need to use them for something,' so we got into the flower business by default that very first year. We knew nothing of that business."
What Graziano did know, though, was that "we had to find someone with the knowledge who could make that kind of business grow." He quickly hired a local expert, known by everyone as "Sharon," who still remains as the store's full-time floral designer. She keeps the section stocked with cut flowers, annuals, perennials, hanging plants, wreaths, arrangements and centerpieces she designs herself.
Under her guidance, the business flourished gradually and by 1996, Anthony's Food Shop decided to build a new greenhouse completely attached to the store (the first ones were not attached). As it stands today, the flower store is fully accessible through the main store, but it is like a little floral world unto itself.
This "shop-within-a-shop" atmosphere is something Graziano strives for with all of his profit centers. Two others include a wine department and an "exemplary" pizza department, where the dough is freshly made on the premises.
With "food" in its name, Anthony's Food Shop has made foodservice its largest profit center. In addition to homemade pizza, the store boasts homemade soups and deli salads. He recently hired a baker for the latest food foray: an on-premise bakery.
The store is a stickler for the highest-quality consumables. "I would put our foodservice products up against [those of] specialty shops any day," said Graziano. "There's nothing they do that we don't do. We do all the steps it takes to get the very best in food. Of course, it takes awhile for customers to catch on. There's a little bit of a stigma - people don't think of buying the best food at a gas station. But we've won many over."
And so, with a homemade pizza and deli shop, a bakery, a flower shop, a wine shop and a dog store, Anthony's Food Shop has learned how to juggle a variety of profitable sections, many atypical of a convenience store.
At Anthony's, each profit center is looked at distinctly and managed separately wherever possible. Part of the management process includes making department observations of what else customers have to choose from in the area, and adjusting accordingly.
"Take our wine department, for example. We'll take a look at what the competition is, whether it's a wine shop or a supermarket, and we'll decide from that how we'll be different and how we're going to compete," Graziano explained.
He purposely chose multiple profit centers because he's found "when you're in a competitive market, a lot of people can compete with us on a particular department, but not many can compete with us across the board. Even a full-blown supermarket, we beat them on home-town friendliness and fresh, homestyle quality. So maybe someone can hit a certain portion of my business, but it'll be hard for them to knock down the whole thing."
A Stars & Stripes Niche
Like Anthony's Food Shop, Old Glory Stars & Stripes, a single convenience store in operation for just about a year in Old Glory, Texas, also found some niche profit centers to distinguish its business and help build profit.
Owners Marshall Onellion and his wife, Violet Castro, view the profit center concept similar to Graziano - as a single-store owner's necessary edge in these times.
"When I look around at stores nearby, there's no way a mom-and-pop operation can compete with the big chains on so many levels," said Onellion. "I can't compete with the standard c-store and it would be foolish for me to try. So, I have to have things that distinguish me from the 7-Eleven."
Certainly through its profit centers, Old Glory Stars & Stripes (or just Stars & Stripes, as it is known locally) aims to be different.
Because Old Glory, Texas, is known as a military war memorial town, Stars & Stripes found a unique merchandising opportunity - offering American flags housed in wooden shadow boxes that are beautifully handcrafted by local artisans. The flags themselves are special because Stars & Stripes arranges to have them flown first at the Old Glory Memorial in town before they are placed into the shadow boxes.
"Say your mother or father served in the military and you want to give them one of these shadow boxes as a gift. Well, you might want the flag flown on their birthday or some other significant date, and we will do that. We have them flown at the memorial, take them down and then put them into the box," Onellion explained.
He believes this business will really grow through the use of the Internet. Soon, he will make these special flag shadow boxes available on the store's Web site, potentially opening up a worldwide customer base.
And that won't be the store's only merchandising tie to the Internet. Although it is not yet complete, a local artisan gallery is being designed on the second floor of the store. This will not be a collection of low-end trinkets, but rather a compilation of artwork, jewelry, quilts and other hand-designed items that Onellion expects will retail from about $100 to $1,000 each, depending on the item. He also will make these items available online, along with others that may or may not be featured in the upstairs gallery.
While Onellion hopes the Internet will bring in more sales and profit for the store, he is not expecting the gallery itself to generate tons of sales. "I hope a few customers will buy items up there, but my real hope is for it to become a place where people can go and enjoy themselves for awhile. There will be coffee and tea and they can sit back and relax," he explained. "I think of it as a nest where customers can be surrounded by beautiful things. Most retail places don't have that kind of atmosphere.
"It's all about stopping traffic," he added. "Yes, they have to buy something, but that's not usually the problem. The problem is just getting them to stop and come in."
Onellion believes single stores who really make it are viewed as being very much a part of the local community. "You have to become your community's store. You have to be truly special, especially in this depressed economy," he said. "If you offer them a way to make money themselves, then you're really different from those who just take their money."
And so, Stars & Stripes' profit center will also be a profit center for its customers, as Onellion's gallery idea was created as a way he could help local artisans and the business at the same time. It has since grown beyond that, with Onellion willing to put up non-local artwork and artisan goods on his Web site, hopefully sometime this spring.
Car Wash Hook
In Greeley, Colo., Westside Carwash & Convenience puts a new twist on a traditional convenience store profit center - also with the idea of helping others and its community.
Single-store owner Mark Graziano added an
upscale dog food and accessories shop catering
to his town's pet-crazy inhabitants.
As its name implies, Westside has gone with a typical convenience store side business: a car wash. Like some supermarkets in its area, it gives customers the opportunity to save 10 cents a gallon on fuel with the purchase of an automatic car wash at the pump or inside the store.
But its unique community hook is through fundraisers. All automatic car wash customers get to choose from a selection of charities at the point of purchase. Westside donates a certain percentage of its car wash profits to the charity of the customer's choice.
"The fundraising part is a big reason why people come here," said owner Maggie Melin. "They know they don't pay anything extra, but it's a way for them to give back in this economy. I'd say 80 percent are choosing local charities, such as school teams and such. As for the national charities, the Humane Society is probably our most selected one."
As far as Melin knows, she is the only convenience retailer who does this. She said she got the idea on her own while walking a trade show floor before opening the business. "I wanted to do something different with this," she stated. "We're still learning the business, but this part of it seems to be working."
While Melin, Onellion and Grazi-ano have different businesses and different levels of experience, they do share a "profit-center fundamental" in common - the ability to try something different and take a chance.
In fact, the way Graziano sees it, sometimes the more "green" a single-store owner is about opening a new profit center, the better.
"If you're a little naive in the beginning, that's not necessarily a bad thing," he said. "You don't know what you're doing wrong, you're oblivious to what the business standards are, and sometimes that just makes you go for it."