Rutter's, the 69-strong Pennsylvania-based convenience store chain, is giving shoppers more reasons to visit its sites with a strong foodservice offering, game-changing technologies and now beer caves and gaming. Fiona Briggs reports
Rutter's is living and breathing its slogan: "Why go anywhere else?" The oldest vertically integrated food company in the US with 69 stores in Central Pennsylvania, is constantly adding strings to its bow and eliminating reasons for shoppers to visit other locations to meet their convenience needs.
Beer caves and gaming are just the latest additions in a history of innovation. Rutter's president and CEO Scott Hartman reports the business now has 31 licenses to sell beer and wine to takeaway as well as for on-premise consumption and 20 stores are actively selling alcohol right now, as the roll out progresses across the State of Pennsylvania and new territories such as West Virginia.
Rutter's has obtained restaurant liquor licenses to enable the move to take-out sales and is currently allowing visitors to consume one alcoholic drink on-site. "We will see how that allows our restaurants to grow even more," Hartman says.
Gaming, meanwhile, has been enabled by the move to bigger footprint stores. Rutter's opened its first 3,500sq ft superstore in 1995. Today it's opening 8,500sq ft locations and one site of 10,800sq ft. The larger stores have let Rutter's grow and enhance its foodservice presence. "Bigger stores provide more space to accommodate food options with larger areas to construct the food and larger seating areas. The bigger footprint has allowed us to grow from a deli to a restaurant and we are not done yet," Hartman says. "Gaming has also been enabled by the bigger footprint," he adds.
A new gaming bill, passed in autumn 2017, has enabled truck stops with three acres of land, selling more than 50,000 gallons of diesel per month and with 20 parking spaces for trucks, to build and provide a room with up to five video gaming terminals.
Hartman reports Rutter's is currently active in the planning application and construction phase to build out rooms to support this move. He reckons there are 30 Rutter's stores that should qualify for gaming and that it should usher in new customers. A recent trial in Illinois has shown the introduction of gaming has not impacted lottery sales and its received a surprising amount of interest from women, who choose these new locations as a social meeting point, to have a cup of coffee and for gaming. "There's been a higher skew towards female than you would have expected. We love that - it's new customers and a new revenue stream," Hartman says.
From its conception, Rutter's has been pushing the boundaries and beer and gaming are just the latest stages on that journey.
"Since our beginning, my father's generation, we have always been committed to food and sandwiches and the like but we did it a bit differently," Hartman explains. Rutter's pioneered the 'deli taste', serving a full ham or turkey with cheese. "We'd pull out that ham and slice it and put it on a piece of bread - then, that was considered fast food," he says.
The 3,500sq ft superstore opened in 1995 took that concept to the next level with a deli on one side of the store and cash registers on the other. "It was a recommitment to being able to do a deli/restaurant style food," Hartman recalls.
Rutter's revolutionary journey continued apace but this time with a new model. In early 2000, the business hired its first director of foodservice, someone with a background in owning a restaurant in Miami and with experience in the c-store business too. Since then, Rutter's foodservice focus has ensured it has the right people on board. Initially, it ensured all employees were trained in Serve and Safe food safety. Subsequently, training has migrated to the higher standard HAACP, the top of the food safety training ladder, Hartman says. "All employees have been trained in HAACP and there's nobody in store that does not have eyes for food safety. It elevates the programme and quality," he says.
Technological developments have gone hand in hand with foodservice competence and Rutter's has been ahead of the field in this respect.
"Nine years ago we came out with our mobile app. It was a first in the industry and it gave us real time feedback from customers on our programme," Hartman reports. "If you mess it up, somebody wants to tell you and they can tell you right now. We could look at the feedback and see where we were not meeting expectations and to try and use that in working with our teams to improve."
Rutter's was also a first mover on touch screen ordering in stores, implemented in 2005. According to Hartman, that really allowed Rutter's to take the offering to another level - to provide more combinations or permeations and improve efficiency and accuracy to boot. "Touch screens allowed us to expand the menu to over 1 billion unique items," recalls Hartman. "With that, we jumped ahead of every QSR out there at the time. The best you had was Burger King's 'have it your way', which was really just three different ways," he says.
Touch screen ordering also benefited the up-sell and has driven a 10-20% increase in sales, since "touch screens never get tired of asking the customer if they wanted something more".
"Every up-sell dollar is important in this business," Hartman adds. "Touch screens saved labour from taking the order, they got it correct and with industry leading combinations. They'd also feed the kitchen operation screens so that the food could be made very quickly too."
Seven years ago Rutter's elected to split its food sourcing from its primary grocery wholesaler - another winning move. "In the US grocery wholesalers were very good at supplying all the common food store items but the strength of skill set when it came to restaurant quality food was lacking and is still lacking," Hartman says.
Instead, Rutter's partnered with a grocery wholesaler to supply its stores and a US foodservice supplier to supply its restaurant operations. This developed the business from QSR to fast casual, Hartman believes. Crucially, it gave Rutter's access to a full spectrum of foodservice products and the service is provided at night, ensuring Rutter's is fresh and ready to go in the morning.
Agility is another Rutter's trait and one which provides competitive edge, Hartman maintains. "We are better positioned than the majority of c-stores or restaurants because the mentality of convenience store operators like us is to change. We are able to adapt very quickly, bring in new products and get rid of things," he says.
"We've been out in front with technology for a long time and our commitment to food comes from me and our senior management team - that helps us to stay on top," he says. The company is also working with several food manufacturers on developing new items, be it a bacon wrap hot dog from Rutter's hot dog provider. "We are reasonably well positioned to stay on trend," Hartman says. "It's a race and we all know we have got to run faster."
Rutter's is not averse to risk either but then it's considered too.
When touch screen technology first appeared, Rutter's was initially reluctant, like others at the time. It thought customers wanted the experience of talking to a person but focus groups showed strong acceptance among those using kiosks in other situations and especially for younger cohorts. Critically, consumers trusted the technology to get their order right - more so than a person.
"We went with the technology and embraced it. It did not hurt sales, we had the benefit of up-selling and could service many more customers because there were four or six order points versus one or two. People would also tell us that it took the shame out of ordering an extra large or extra fries," Hartman adds.
Mobile ordering is also on the cards and Rutter's is actively engaged in being able to deliver that, Hartman reports. It's quite complex due to Rutter's 1 billion combinations but is on the retailer's roadmap and to provide multiple ordering and pick up options.
Pay at pump technology is currently being trialled with new 11in touch screens, which enable customers to buy fuel or purchase food and drink orders.
As with the new beer and gaming offers, Rutter's is on a mission to save drivers going anywhere else. "We are trying to figure out what we can we do with our management skill and knowledge of convenience to help keep extending our offer," Hartman says.
"I'm not sure where the next one is going to come from, which is probably why I'm still out there building 8,500sq ft stores and thinking what else can we put in there," he smiles.
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