SSCS customer Mark Jordan, President of South Carolina-based Refuel, Inc., has a reputation as a successful, progressive C-store owner, in no little part because of his auspicious foray into Food Service Management. He has used Food Service to great advantage in his three current stores, with a fourth set to open this month and a fifth scheduled to start construction this coming January. Not only does Food Service build Refuel, Inc.’s profitability, it creates meaningful market distinction for the company, a key in its development as a strong independent regional brand.
As is often the case with entrepreneurs, Jordan’s Food Service approach wasn’t an immediate success. Jordan himself will tell you that he made more than a few missteps on his way to creating a leading Food Service program. He learned from those mistakes, however, and continues to refine his approach even as it flourishes.
“I started in business for myself in 1999,” Mark told us, “after working for a pretty good-sized petroleum retailer that owned and operated multiple sites. I built a number of stores and then the company was bought out by one of the public chains in 2005. I developed a number of stores for that interest in the time it took for my non-compete agreement to expire. I started Refuel, Inc. in 2008. When I started Refuel, I tried to take everything I learned from those previous opportunities, especially what I could do better, and use that experience to the benefit of the stores we were about to build.”
While he found fuel and tobacco profit margins unstable, Jordan began investigating food service more extensively as a potential center for profits. In fact, his stores have begun to center on food service. “Our stores are all brand new,” he told us, “and they have been designed to accommodate Food Service, which means they are larger buildings. The layout is proprietary and Food Service is integrated into the store structure; it is not ‘bolted on.’ Where a normal sales counter might end, ours continues to provide the real estate necessary to do justice to the Food Service items we offer. We have TV monitors displaying menu choices, hot food displays—all incorporated to look inviting and draw the customer in.”
Extensive experimentation with various food service items led Mark to have a deep understanding of what items perform best on the shelves. “We’ve been selling hot dogs and tornadoes,” he explained, “but are about to discontinue them because they don’t make enough money for us—we can’t sell enough of them relative to the waste they generate to make it worth our while. Part of being a success in this area is not being afraid to tweak your Food Service offerings consistently based on what you see working and what you see not working.”
“We didn’t understand Food Service food costs at all in the beginning, especially from an accounting perspective. It nearly killed the business. These costs are sneaky, and you need to have a digital scale if you want a chance to make a go of it. You have to track every single component of a recipe—you have to deconstruct the recipe to the most detailed level possible—and that takes a lot of patience together with the right technology. For example, when we first started making salads, our food costs were phenomenally high, and we couldn’t figure out why. So we studied the program and broke it down and we found out that we were just getting killed on lettuce, of all things. It doesn’t seem like lettuce would be that costly, but in the context of what is acceptable to charge for a salad at a convenience store, it is.”
“If you want to be profitable with Food Service you have to think more like a manufacturer of products than as a retailer. You have to calculate item costs by drilling down into component costs. Once you’ve done this, you have to figure out how many assembled units you must sell for the program to be viable. That’s not as simple as it sounds because you have to factor in waste, which is inevitable with freshly made items. How much waste is going to make sense per assembled unit? You need to have an answer.”
Jordan uses the Computerized Daily Book’s Food Service module extensively to seek such answers. The application allows you to track profit margins on complex, ingredient based items. You can select your own unit of measure (for instance, ounces, slices, units, sugar packets, lids) create items out of other items. By using the CDB to generate spoilage and waste reports, and ideal vs. actual cost comparisons, you are able to see which of your items are performing best, and tinker with recipes and ingredients to improve profit margins.
On our part at SSCS, it has been a privilege to work with Jordan. A brilliant trendsetter, Mark has a commitment to making delicious food for customers on the go, minimizing spoilage and waste, and keeping his profit margins broad and stable. You can read our two part interview with him here.