Name: Amazon Cant Compete With Convenience Stores
Uploaded: 2020-01-03
Duration: 2 min 27 s
Description: According to CST Brands’ CEO Kim Lubel

 Kim, CST Brands has been around for only three years. Why did you decide to sell instead of going it alone? As we came out of our second year anniversary, we were continuing to grow, continuing to implement our programs, but they're about a three-year payout for the programs we put in place. And in today's public markets, shareholders are looking for quarter by quarter, short term kind of focus. And we ended up with two activist shareholders in our book. And eventually resulted in the board just making the decision as we looked at all of our options to at least one in the strategic review and really test the market for the value for the company. We've seen a lot of consolidation going on in the convenience store business. How important is size? Do you have to be really big to be successful? The convenience store industry is one of those funny things. There's about 126,000 C stores in the US that sell fuel. 60% of them are single owner operators. So it's a really fragmented and a really family corner focused business. And then there are a couple really big conglomerates as well. So scale certainly helps you in terms of buying power, buying the salty snacks that you put on your shelves and getting a little bit better margin capture on it. But the small piece works, too, because it is such a neighborhood business that it fits your family business. You know your neighbors, and you have that connection. And they feel loyal and come back to you. Well, we're hearing that Amazon might be getting into the-- I saw that. I saw that. --consumer store. Maybe our timing was good. So given that Amazon is so huge and so popular with consumers, how much do you think they could disrupt the industry? We'll just have to see. I have often said-- and perhaps I said it too many times and they heard-- that what we sell, things like hot cups of coffee, a breakfast taco, and a gallon of gas, you can't really get on the internet. And so finding kind of that magic spot between being large enough to get scale, but being focused enough on the customer, I think is the way to success in the C store business. And I think Amazon may be challenged with that. So what do you think the chances are for success for Amazon if you do get into the business? Yeah, if they can figure out how to convert not just sales, but get customers to be loyal to come back to them, then I think they'll have success. But it's a person by person, conversation by conversation basis. And so for a company that's focused on selling through the digital space, what the C store customer is looking for is a much more personal interaction. 

Amazon Cant Compete With Convenience Stores

Leadership

CFT brand has been around for only three years. Why did you decide to sell instead of going it alone? As we came out of our second year anniversary, we were continued to grow, continue implement programs. But they're about a three year payout for the programs to put in place on in public market shoulders, looking for quarter by quarter short term kind of focus. And we ended up with two activist shareholders in our book and eventually resulted in the board just making the decision as we looked at all of our options at least one of strategic review and really test the market for the value of company. We've seen a lot of consolidation going on in the convenience store business. How important his side. You have to be really big to be successful. You know, the convenience store industries. One of those funny things is about 126,000 stores in the U. S. Sell fuel. 60% of them are single owner operators really fragmented and a really family corner focused business. And then there are a couple of really big conglomerates. Well, skills certainly helps you in terms of buying power, buying the the salty snacks and putting yourselves in getting a little bit better margin capture on it. But the small piece works, too, because it is such a neighborhood business that it's your family business. You know your neighbors, and you have that connection and they loyal and come back to you. Well, we're hearing that Amazon might be getting into the Asada they were. Our timing is good. So given that Amazon is so huge and so popular with consumers, how how much do you think they could disrupt the industry? You know, I wouldn't have to see, I have often said, and perhaps I said it too many times when they heard that what we sell, things like hot cup of coffee, breakfast taco and again on the gas you can't really get on the Internet. And so finally, kind of that that magic spot between being large enough to get scale but being focused enough on the customer, I think, is the way to success with your business. I think Amazon may be challenged with that. So what do you think the chances are for success for Amazon? If you do get into if they could figure out how to convert, not just sailed, but get customers to be loyal to come back to them. Then I think they'll have successes. But it is. It's a person by person conversation, my conversation basis for a company that's focused on killing through the digital space. What the tea store customers looking for is a much more personal interaction.