Circle K has been very busy since March. Apart from pivoting its operations to cope with Covid, and expanding its grocery offering, the forecourt giant completely revamped its food-to-go and deli service at a time when consumer demand for both was at an all- time low. Maev Martin talks to Judy Clover, senior market development director, Circle K Ireland, about the new Circle K strategy
While acknowledging that Covid-19 hit them hard from the start, Glover says they weren’t quite as hard hit as other retailers. “Our fuel sales dropped by 50% after we went into lockdown and the big impact was at our motorway sites,” she says. “Our shop sales declined at the same rate, so we had to adapt to try and keep ourselves going and keep people motivated. Our mission is to make our customers’ lives easier every day and this pandemic was a major obstacle to that so, as an essential retailer that could remain open, we had to ensure that customers could get the products they needed. We went heavy on digital to reiterate the fact that we were open, that we hadn’t closed any stores, and that we had put specific safety measures in place.”
Within her own team, Glover looked at how Circle K source products and she decided to take on products from retailers that couldn’t sell them. “We engaged with some garden centres and purchased some of their fresh flowers and bedding plants, anything with a short shelf life, and we added on some DIY and gardening products, like trowels, planting pots and gardening paint for sheds. In addition, our own supplier Keelings kept us topped up with large plants and smaller bedding plants.
That was something completely different for us - even managing all of that fresh stock was challenging for us as a business - but it worked very well. We also added in Betty Crocker lines to facilitate home baking, as well as pet care products. While these were popular products during lockdown, customers weren’t willing to queue up outside large multiple stores to buy them, so we added these to our range and they generated strong sales.”
Circle K was the first retailer to offer frontline staff free coffee. “We moved on this early on to show our national support for frontline workers,” she says. “Circle K in Europe and in our global head office heard about this and adopted it globally, so that was a nice initiative that we could export. We also set up a ‘Little Thank Yous’ initiative, which we took from our parent company in Canada.
After witnessing the excellent community spirit that our free coffees for frontline workers created, we wanted to extend that to other people, so customers nominated someone that they felt deserved a little thank you by texting Circle K or using an online Circle K service where they put in the phone number of the person and a personalised message saying what they wanted to give them. Worldwide, we gave out a million free coffees and personal food gifts for immediate consumption. In Ireland, we distributed a quarter of a million free coffees through both our ‘free coffee for frontline workers’ and our ‘Little Thank Yous’ initiatives.”
Expanded Grocery Offering
Unfortunately, COVID-19 is still with us and is likely to be with us for many months, if not years, to come. With that in mind, Circle K is maintaining some of those new lines that it introduced back in March and is, in fact, adding to them in the run up to Christmas. “We continue to sell fresh cut flowers, although we have pared back on that extra stock that we were selling at that time,” she says.
“We sold a lot of multi-pack water, carbonated drinks and toilet rolls. We had sold them before the onset of Covid-19, but we gave them a lot more space at the height of the pandemic and we will continue to do that for these lines. We still have our pet care offering and we will bring in some additional pet care products and treats for dogs and cats in the run up to Christmas.”
According to Glover, there is an opportunity now to expand what they would describe as their traditional grocery offering. “I’m talking about giving customers an extended cereal offering and extended meal solutions offering,” she says. “During this pandemic we put these ranges into three stores, so we will focus on our residential stores and on adapting the range to suit what customers want right now and for the foreseeable future.
That will be a fundamental strategic shift for us because for many years we didn’t consider grocery to be a big part of our offering. We focused on fuel, impulse coffee, food-to-go, and candy and snacks, with a token grocery offering, but we now have this opportunity to develop grocery and non-food in those residential sites and that is what my teams are working on at the moment. When I say residential sites, I mean local stores with easy access. We will be redesigning those residential stores to give over more space to grocery and non-food items.”
Despite the nosedive that the food-to-go market took since the lockdown in March, Circle K is optimistic about its future.
“Food-to-go is still an important customer offering for us – we still have to be there to provide for those who are on the road, those who are working from home and live near a Circle K store and want to pop in for breakfast, or for coffee or food on the go at lunchtime, or after dropping off the kids to school,” she says.
Prior to Covid, Circle K had already decided to revamp its food-to-go offering and they set about implementing the revamp of 40 stores in their estate in Januar. They continued with the revamp when restrictions lifted.
“We had every store refit by June, so we continued to roll out the food-to-go offering despite all of the challenges that we had to face,” she says. “Now, with our food-to-go offering, the focus is on really speedy operations for stores - prepacked sandwiches, baguettes, fruit, prepacked porridge, fresh juices and salads, as well as a gourmet offering that is out of pack but still food-on-the-go. We also have hot dogs, burgers and sausage rolls added in as a hot food-to-go option.”
According to Glover, Circle K invested nearly €3.2 million in expanding their food-to-go concept between January and May. “It is a significant change – we used to have a deli far from the till point whereas our food to go offering is now beside the till,” she says.
“We took the best products that we sold in our deli – our chicken fillet rolls, breakfast rolls (both of which are our two most important food-to-go products), the Blaa breakfast baps, cajun chicken baguettes, and chilli chicken panini - and put them into a food-to-go offering in our stores that didn’t have a deli.”
In 2016, Circle K developed its deli under the ReStore brand, but this year they decided to give it a major makeover. “This has been the single biggest development at the Circle K operation so far this year,” says Glover.
“My food category manager Mary McDonald went in with some fresh eyes and looked at how easy it was to shop in our delis. We wanted to see if it was easy for customers to buy products they really wanted. We then revamped the deli completely, focusing on the quality and freshness of the product. We put our best sellers on the menu board, whereas in the past we put our innovations on the board – this made it easier for customers to choose.
“We then revamped our hot counter. Breakfast is an all-day option, but there was no product innovation in our lunch offering, so we incorporated some of our other concepts into the hot counter, such as burritos, nacho bowls, quiches and lasagnes, as well as our vegetarian and vegan ranges.
The chicken fillet roll was one of the two best performers in our deli, as they probably are in most delis, so we introduced the Katsu chicken roll, which is a big trend in the UK and in some European countries.
“We did some operational pilots in July and invested in virtual staff training to ensure that we didn’t hold up the roll out of the service for our customers. So, in addition to the 40 stores with our new food-to-go offering, we have this new deli operation in another 56 of our stores. The new delis are in our larger stores with higher footfall, which would include all of our motorway locations. Every day the growth is coming back into our new delis and food-to-go operations, and we are growing faster in those stores because customers are happy with the new offer.”
Local Sustainability Strategy
Circle K’s local sustainability strategy hasn’t been thrown off course by Covid. “It has, in fact, probably been accelerated,” says Glover. “We continue our focus on building our EV charging capacity across our network and we are still looking at ways to make petrol and diesel more environmentally friendly. We have teams working on that locally and globally, as usage of fossil fuels won’t be going away any time soon. In 2019 we opened the first compressed natural gas station in Dublin Port and we are introducing it into our site in Cashel to continue to build support for the freight sector and reduce carbon emissions.”
Other sustainability projects include reducing single use plastic. “We don’t use plastic bags in our store,” she says. “We have a paper bag offering at the moment and we will be bringing in a sugar cane bag soon. Our coffee cups are fully compostable and we are trying to move them into a fully recyclable cup and that is challenging.
Retailers are putting pressure on manufacturers to come up with this technology, so we are getting closer to a more sustainable piece of packaging. We have standard sandwich packaging for our food-to-go range, but what looks like plastic in it is, in fact, recycled plastic, so we are really enhancing the sustainability of our food packaging. Also, at a European level we are trying to reduce the carbon footprint, so we use one supplier across all the countries that we operate in.”
Store Of The Future
Glover believes that retailers need to think about seamless or frictionless customer experiences in the store. “We need to look at digital payment options,” she says. “I love Amazon Go. It is a magnificent concept. Will we get to that point in Ireland? I’m not sure, but we certainly need to aim for it. Also, apart from the products in stores, we need to develop innovation in terms of how we operate stores.
How do we simplify the work that our staff have to carry out on-site so they can spend more time on the shop floor with customers? We need to move to a more digital friendly operational focus for the store and bring that through to the customer. If a retailer isn’t considering that they may be left behind.”
Circle K currently have a large network of outdoor payment terminals on their fuel pumps and that is making it easier for customers to pay as they don’t have to enter the store.
“It takes queues out of our stores, so it encourage customers to visit,” says Glover. “I think we need to look at having more options at the fuel pumps for customers that allow them to purchase products that are available in the store – for example, to order a sandwich, coffee, etc at the pump and when they enter the store the products are ready for them.
For many years at Circle K we had one template for every store, but that won’t work now because customers need additional products and more convenience products for however long this pandemic will be with us.” We have to be prepared to move fast."
© 2020 Checkout – your source for the latest Irish retail news. Article by Maev Martin. Click sign-up to subscribe to Checkout.