Driving Growth: The Pantry’s Focus on Food Service and Customer Experience

“I’m grateful I’ve been given this opportunity to help grow the business. The Pantry is already one of the largest chains in the industry, and we see tremendous potential for the future, so we’re very excited,” Marks said, adding that one of the first things he noticed about the company was that it housed a tremendous amount of unrealized potential.

Initially, Marks focused on working closely with the company’s board of directors and management team to clarify its vision, objectives, and strategic plan. This allowed the team to get a jumpstart on prioritizing investments accordingly, and ultimately, it has helped generate additional revenue.

A focus on food service

Sam Wornom and Truby Proctor, Jr. founded The Pantry in 1967. The organization has grown and evolved significantly throughout the last four decades, with operations now consisting of 1,647 c-store locations (the majority of which operate under the Kangaroo Express name) spanning 11 states: North and South Carolina, Florida, Indiana, Tennessee, Kentucky, Virginia, Alabama, Mississippi, Louisiana, and Georgia.

The company went public in 1999 and sold 6.25 million shares of common stock, ultimately raising $75.6 million in net proceeds. Its footprint has continued to grow throughout the last 12 years, and its team seeks to keep moving forward. A revitalized, multi-faceted strategic plan was recently introduced to support additional growth. Although it touches nearly every aspect of front-line and back-end operations, there is one specific area that’s expected to expand more than the others: foodservice.

Currently, just about 7% of The Pantry’s gross annual revenue comes from foodservice. This is significantly lower than the c-store industry average, which, according to Marks, is approximately 16%. “We’re at less than half the industry average right now, which is actually great news for us because it means there’s a lot of room for improvement in that arena,” he added.

Ultimately, this means The Pantry doesn’t necessarily have to tread any new ground to experience growth. The organization put a new plan into place in an effort to expand its foodservice offering and maximize revenue in this area. Marks said he and his team have placed a strong emphasis on three specific areas: breakfast, lunch, and all-day snack. Hot-to-go pastries and sandwiches to complement the traditional packaged goods are a definite focal point, but the biggest focus area, by and large, is coffee.

“Coffee is roughly 60% bigger than the next-largest foodservice category in the c-store industry. We haven’t been doing nearly as well as we should be in that area, but we have a tight focus there now,” Marks said. “Our ultimate objective is to provide exceptional value to consumers on the core items they’d expect to get at a c-store where foodservice is a priority.”

But just how does a c-store compete with specialized QSR retailers? What will to make a coffee-seeking customer choose The Pantry, as opposed to a popular coffee chain?

According to Marks, The Pantry competes by leveraging its unique advantages. More specifically, the c-store chain emphasizes trip consolidation, highlighting the fact that its product offering is more diverse than what most QSR competitors have to offer. You might be able to get a good cup of coffee at the café down the street, but you probably won’t be able to fill up your gas tank, grab a newspaper, or buy milk there.

“Trip consolidation is a big advantage. Our offering is very broad, which allows us to place an emphasis on product accompaniment. This becomes clear when you look at items with high cross-purchase incidence rates. For coffee, it would be bottled water, for example, and fortunately, our stores have great presentations of bottled water,” Marks said, explaining part of The Pantry’s trip-consolidation strategy.

“Our mission, simply put, is to be an indispensable part of our customers’ daily lives by meeting their on-the-go needs in a fast, friendly, and clean environment, and our primary focus is always on the customer,” he added. “We are continually looking for more and better ways to meet the needs of our shoppers and give them great value on the products they need.”