Spinx Company
Founded by Stewart Spinks in the ’70s as a single-store location, Spinx Company accumulated a chain of retail convenience locations over time through acquisition and organic growth. Although the company also has independently owned real estate and wholesale gasoline divisions, according to CFO and CMO Stan Storti, first and foremost, Spinx Company is a convenience retailer.
Since joining the company in 2005, Storti and his team streamlined the company business, divesting the odds and ends that had been gathered over the years, including Burger Kings, Dairy Queens, and Krystal Hamburgers, and segregating the leadership of each of Spinx Company’s other businesses.
“Now that we’ve been successful at breaking out the business units into separate reporting entities and recruiting best-in-class people to manage each segment, each of us can focus on our area of expertise in order to have a more meaningful impact on the segment we’re specifically responsible to manage,” said Storti.
Improving service
Spinx Company’s retail convenience footprint includes more than 40 Spinx-branded locations and another 25 major-oil branded gasoline sites across North and South Carolina. Since the adjustment of Spinx Company’s corporate structure, Storti and his team have focused more on the catch phrase Stewart Spinks coined so many years ago—making life easier.
A major realignment in this direction was the replacement of the company’s POS system with one made by software company Radiant. Up until 2005, Spinx Company locations were on the Gilbarco G-site, and only in 2006 did Spinx upgrade to include a bar-coded scanning component. In addition, training employees on the Gilbarco G-site took up to three days.
“We felt putting associates in front of a keyboard with a lot of buttons on it like some of the other solutions that are out there was intimidating and slowed down speed of service,” said Storti. When shopping around for another solution, a POS solution sales rep even used the commonality of complex systems as a potential selling point to Storti.
“He explained that any associates from other convenience stores could step right in and use the device,” said Storti. “My response was what makes you think we want the typical convenience store associate? If companies are looking for the same employees that they have or that have been in the industry for years and years, how are they really improving their customer service?”
Creating savings
After completing the implementation of Radiant’s system on Valentine’s Day 2008, Spinx Company was able to train associates in as little as 15 minutes. It also improved the way it balanced its labor needs, enabling shorter shifts for associates and a way to track exactly when each location needed additional staff to handle higher customer throughput.
“We made this investment with the intent of creating labor savings,” said Storti. “We’ve also streamlined the end-of-day processes significantly for our managers. They now only have to input data into 40 back-office screens whereas before they were inputting data into more than 120 screens.”
The POS device helps Spinx Company identify inventory variances. This year, the company also rolled out computer aided ordering for its tobacco products. Orders that used to take managers two hours to prepare now take only 30 minutes. With a company-wide goal of cutting inventory from 23 days to 12 days, Spinx Company managed to free up $750,000 in cash flow and save approximately $60,000 a year in interest.
The success and acceptance of the POS implementation, according to Storti, came from the way the implementation team was developed. Rather than taking advice from outside consultants, the company took one store manager, one technology person, and one accounting person out of their positions for two years and gave them a goal of finding the best POS solution for the company’s private-branded locations.
“If I as a store manager can embrace and lead this technology initiative, you as a store manager can do the same,” said Storti. “This is technology that’s relevant to you and is designed to be used by you because I am you. The buy in and change management element of that was an incredible benefit.”
Ahead of the game
Some of the greatest challenges for companies in the convenience retail industry are the fees associated with credit card processing and credit card interchanges. In fact, according to Storti, in 2008, credit card companies made as much money as those in the convenience retail industry when gasoline prices spiked due to the way each industry calculates fees.
“Our profit on gasoline is measured on a cents-per-gallon basis,” he said. “The member banks and credit card companies measure their fees on a percentage of the dollar transaction. It’s an enormous challenge.”
img class=”caption” src=”/wp-content/uploads/sites/8/stories/Spinx_Company.jpg” alt=”Spinx” align=”right” border=”0″ /> To combat these challenges and to adhere to its goal of making life easier for customers, Spinx Company’s branded locations implemented two-tier pricing. Customers can pull up to the pump and elect to pay cash or credit. Those paying cash pay a lower price per gallon of gasoline.
In addition, the company installed cash acceptors at the pump so consumers don’t have to go into the stores to pay for their gas but still receive the financial benefit of a lower price of gas. “We have a proportion of business through cash that no one else in our industry enjoys because of cash acceptors and two-tier pricing,” said Storti. “Our Spinx brand stores take about 20% more transactions in gasoline on cash than any of our peers.”
Even with these investments and upgrades, when asked about Spinx Company’s greatest competitive advantage, Storti replies without hesitation: “Our people.”
Each location measures, on average, 2,800 square feet, with new stores averaging 5,600 square feet, and all include 12 cooler doors, a beer vault, and 8,000 SKUs of product to manage. But the fact that customers choose Spinx Company over other convenience retailers means there’s more to the company’s appeal than its products.
“Our associates know what you want, and they know how much you want of it when you want it,” said Storti. “That’s about relationships and about having people who care about other people. We have an extraordinarily large percentage of associates who are those kinds of people.”