Rickers transforms business model and engages in the community

Ricker Oil Company, the family-owned Indiana convenience and forecourt chain, has transformed its offer and is engaging in its local community with a Reduced Emissions Fuel Programme launched in partnership with GreenPrint in the Indianpolis area.

Founded in Middletown, Indiana, in 1979 by Jay Ricker, today Ricker’s operates 56 sites and supplies fuel to a further 85 stores.

Ricker’s growth has been both organic and through acquisition, including the 32 sites, which the business acquired from BP in late 2008/early 2009.

Quinn Ricker, who took over as president and CEO from his father in 2010, says the company still has growth ambitions but the plan has evolved due to the changing nature of its business and the real estate market. “Absolutely, we are growing the business,” he says. “We have a really good store format and our offer has completely changed from 2011 [when Insight last visited the business to record a Retail Vision video].”

Ricker reports the company considered a significant acquisition three and a half years ago, which would have tripled the business in size.

However, it quickly realised that its new, extended offer, which was rolling out to stores, added complexity to operations and made acquisitions more difficult, as a result.

At the same time, property values had increased, says Ricker. “Valuations have also sky rocketed and are a little too high for what we are willing to pay,” he says.

So, rather than continue on the acquisitive trail, Ricker’s has a strategic plan to build four, 5,000sq ft stores per year, reports Ricker.

These will encompass the new, revitalised product offer, which includes a full foodservice programme, touch screen ordering, top end coffee, a seating area, a large drinks fountain and strong beverage offer, ATMs, plus improved restrooms.

The food programme was introduced to stores two and a half years ago but on the back of an extremely innovative trial.

Ricker’s literally ‘test drove’ its fledgling food offer in a food truck, which was driven all around Indiana. “We found a vehicle and built a food truck from scratch that was a mobile lab and a billboard for our new foodservice programme,” Ricker says. “We knew we need to get into foodservice and testing with live customers was the best way,” he adds.

The offer is Tex Mex in style incorporating burritos, tacos, salads and burrito balls. “The idea is that the food is portable,” explains Ricker. “You can eat it while you are driving down the road.” There are healthy and low carb options too, for those customers who prefer to make healthier choices, he adds.

Ricker’s tested the concept via the food truck for one year, taste testing and winning customer feedback before piloting in-store and tweaking before roll out. Today it is available in 23 locations with more to follow. According to Ricker, the offer has been well received. “The numbers are strong,” he says. Crucially, the food offer has created a halo effect around the rest of the store, Ricker adds.

“The inside sales pick up in terms of basket spend has been really strong. We are drawing new people in and and they are buying other things besides food.”

Prior to the foodservice launch, Ricker’s embarked on a store refresh programme in 2010 to ‘streamline’ its heritage assets with those it had acquired from BP. The remodeling included a complete rebrand with a new logo and interior and exterior design. The new image champions the foodservice offer for customers who drive by and inside the food stores have been reorganised.

“We have put food front and centre and moved the checkout area so that it looks like we are in the business of food,” Ricker says.

A bean to cup coffee offer provides another strong signal about Ricker’s food and beverage credentials too.

The retailer has invested in high end German Schaerer coffee machines to brew individual cups of fresh coffee, versus pots, and uses a local roaster, Hubbard & Cravens.

The food and drink enhancements have altered the customer make up, Ricker reveals. Today, stores attract more female shoppers than other convenience stores and the trend has become more prevalent through the changes to the offer, he says.

Such data is being captured through the Ricker’s Rewards programme, introduced two years ago. The loyalty programme spans a card and mobile app and rewards shoppers across fuel and in-store purchases. It has added another tool to Ricker’s arsenal to enable the retailer to compete. “We have every offer - loyalty, foodservice and updated branding - to be competitive in the industry. Now we are focused on executing it,” Ricker says.

Mobile food ordering is poised to be a further bolt on too; aided by advancements in technology and providing Ricker’s with another USP. The business is also in a current ‘tussle’ over the right to sell cold versus warm beer. Indiana’s alcohol laws only enable packaged liquor stores and licensed restaurants to sell cold beer. In a test, Ricker’s has applied for restaurant licenses for two stores, resulting in the current uproar.

“I’ve gone to school on how to work with government relations over the last two weeks,” smiles Ricker. “It’s really blown up in the media but the public sentiment is on our side.”

The diversification into food and drink, however, is critical in a market characterised by declining gasoline and cigarette sales, says Ricker. “The tailwind of gasoline volumes has been strong and business has been good but all the industry projections show gasoline demand has been slowing.”

Ricker reports figures show the industry will be selling 22.5% less gasoline in 2035 compared with today. The trend will be driven by both electric cards and more fuel efficient vehicles - a typical pick up truck bought today will achieve 10-11 miles per gallon more than one bought in 2008, for instance. “People are still driving as much but cars are using less gas,” Ricker says.

In the meantime, Ricker’s is working hard to promote its environmental credentials as a fuel retailer with its tie up with the carbon offset business, GreenPrint, on a reduced emissions fuel programme branded Replenish:

GreenPrint’s reduced emissions platform is helping to bridge the gap from current to future fuel and vehicle consumption patterns and provides turnkey sustainability and engagement for fuel retailers.

For Ricker, the fit with his business was ideal. “We needed a leg to stand on in terms of how we engage with our community and we wanted to target younger customers who are more in touch with environmental issues and this was a good way. Gasoline is is not viewed as good for the environment, so we are taking that and using it to make our community more environmentally friendly.”

The numbers, since Ricker’s launched its Replenish programme in 2015, speak for themselves. To date, Ricker’s has planted 10,000 trees in Indiana and offset 56 million pounds of CO2 with reduced emissions on 69 million gallons of fuel.

The programme has delivered another unanticipated uptick for the business too.

Ricker again: “It’s given our people internally something to rally around. Our store colleagues wear the GreenPrint/Replenish T-shirts in stores and attend multiple tree plantings - it’s amazing how many people are excited by it and prepared to take a day off and do the planting. People absolutely love it and it’s a fun way to engage, especially with Millennials.”

Ricker’s has scored another local goal through the project too. The Indiana State House, built in the late 1800s, is commemorating the 200th anniversary of the State of Indiana this year and marking the milestone by planting one species of every tree native to Indiana in its grounds. Ricker reveals Ricker’s, through its GreenPrint programme, is leading the replanting initiative, and will plant between 25-30 mature trees at the State House during the year with a major PR event schedule for this month (May). “It’s a neat project and a nice legacy for the company,” he says.

Through tree planting and carbon offset projects, the GreenPrint collaboration is delivering in terms of driving good will and loyalty among Ricker’s customer base; as the operation’s Net Promoter Score testifies. GreenPrint has researched customer attitudes to the Ricker’s brand, before and post implementation of the Replenish scheme. Ricker reports the score started out at 40 on the initial survey but has shot up to 47 within the space of five short months.

There’s an inkling that endorsement has driven fuel volumes too. “It’s tough to say,” Ricker admits. “Our volumes are holding up really well - better than the market average. I can’t specify an exact number but GreenPrint helps and definitely does build good will in the community.”

It’s certainly another transformational feature at the Ricker’s chain, and is another asset that is helping to future proof its convenience business.

This articlde was brought you by GreenPrint, learn more about them and their relationship with Ricker's here.

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Fiona BriggsFiona Briggs Freelance retail business journalist

Fiona is an experienced journalist and editor, writing exclusive content for GCSF. She is founder of retailtimes.co.uk. She contributes regularly to NACS Magazine and writes articles on omnichannel shopper trends for Radial. Fiona is available for commissions at fionalbriggs@gmail.com

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