Global Convenience Store Focus

Petro-Canada Develops Destination C-Store

Petro-Canada, the Canadian forecourt convenience operator, is developing its Neighbours convenience store format as a destination outlet, famous for coffee and foodservice.

Petro-Canada already operates more than 600 convenience and petroleum retailing locations. In 2004, it created a team to develop alternatives for the next generation of stores and a new format called Neighbours was the result.

Launched in 2005, the Neighbours stores now total 19. The format and its branding are separate from the fuel brand, attracting commuters and female shoppers with a food-for-now offer, rather than impulse purchases.

Speaking at Insight’s Future of International Convenience Retailing conference in London in September, Ed Burcher, senior director for foodservice, Petro-Canada, said Neighbours was the next generation of convenience store. “We wanted to leapfrog the competition not just move it forward incrementally.

“We wanted to move away from our heavy dependence on tobacco and snacks and over-reliance on fuel and carwash.” Burcher also told delegates that Petro-Canada had looked to the U.S. and U.K. markets for inspiration as well as outside its core channel. “We had to differentiate and create significant points of difference and a relevant offer,” he explained.

Burcher said the company had identified foodservice as an opportunity to win business – meeting consumers’ unmet needs – and it benchmarked against competitors in areas such as drive thru, for instance.

It was also critical that the Neighbours store format was distinct from the fuel offer, said Burcher. The new design places food as the centerpiece and includes speciality coffees rather than self-serve, freshly made sandwiches, a signature panini offer plus all-day breakfast.

Inside, pod merchandising allows for an open flow and there exists open case merchandising on soft drinks. The exterior, meanwhile, is stone-fronted with a patio and outside seating area.

Neighbours also features touch-screen ordering, but for limited time offers. According to Burcher, this ensures staff can deliver customized orders in fewer than two minutes.

At the drive thru, meanwhile, two till points have been installed to deliver orders within 30 seconds, including breakfast. Burcher said offering a fast and friendly service was a key differentiator for the chain, and he revealed 19 percent of all purchases are associated with breakfast.

The new format had not impacted fuel sales in any respect, added Burcher, but he admitted Petro-Canada was still on a learning curve. “We are growing, learning, adapting and adjusting the offer,” he said. And he offered the following advice: “You have to test the assumptions, be honest and be prepared to make changes.”