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How to Manage Foodservice Profitably
CONVENIENCE STORE NEWS (October 4, 2018) — Focusing on sales is extremely important in any business. After all, sales cure all ills.
This is especially relevant in a grab-and-go foodservice environment, where focusing on sales begins with your display cases. A full case conveys freshness to the consumer, which can equate to more sales. But inventory must be managed effectively to ensure incremental profits are not lost due to waste.
Implementing an inventory and production software solution customized for a grab-and-go foodservice program can minimize daily spoils by managing products with varied code dates, developing sales projections for those products, providing production schedules for staff, and even improving overall merchandising impact.
An important piece to creating foodservice profitability is ensuring that waste is within a certain tolerance.
A waste target must encompass what we call a “merchandising factor” – the amount of product needed on-shelf to ensure the item is merchandised well to the consumer.
Waste will also include overproduction, spoils and returns. Additionally, waste needs to be balanced with an in-stock position to ensure customers can find what they want, when they want it.
The solution may sound simple; however, the execution is not.
To maximize profits, it is essential to know how much to order, what to make and when to make it. Having too much inventory creates excess waste and erodes profit margins, while having too little prevents category growth and negatively impacts customer satisfaction.
The executive team must not only be committed to the concept of putting the right product on the shelf at the right time, but also to providing the resources necessary for these efforts to be successful. This applies to groups with beverage-only programs, in-store production as simple as roller grill, complex sandwich and entrée programs, or commissary operations.
Balancing controlled waste and the need to facilitate good merchandising is necessary to maximize the success of a grab-and-go or made-to-order program.
Do you include a merchandising “waste factor” in your foodservice management plans?
Growing profitable sales is important to the long-term prosperity of your retail business. It is impossible for any successful foodservice retailer to separate effective merchandising from efficient waste management as key factors in maximizing the profitability of a foodservice program.
Typically, “waste as a percentage of X” is used by industry executives when discussing performance. While this may be sufficient for a general program comparison, in order to perform a more comprehensive analysis, additional foodservice management principles must be evaluated. These metrics include: fresh item subcategory merchandising goals, shelf life and subcategory expected vs. actual per store, and profitability performance.
Unique to fresh-food development, category management principles must be enhanced with the creation of targeted waste numbers for each subcategory to ensure adequate merchandising and sales. Each fresh item category should measure its gross profit margin after waste.
Holding warmers, coolers and bakery displays can make a significant impact on merchandising – and sales. Investing in cooking equipment to handle mass production will help staff meet demand during peak timeframes. Also, foodservice retailers should avoid offering product with a short shelf life during hours when staff is limited as this can hurt the execution.
PATTERNS & FORECASTS
It can be incredibly beneficial for retail businesses to identify the patterns that can appear in day-to-day operations. For example, if a supplier who delivers products to the store across the street is always there on the same day of the week and visits you after that, this can help to create a forecast based on this history that you should trust.
While you cannot forecast when a bus may pull in, having products with longer shelf life can ensure product availability without the need for instant production or the waste that can result.
For those products with a shorter shelf life, make less more often and commit to the forecast. Think of the forecast as guardrails on a road. Your challenge is to narrow the guardrails as much as possible while still allowing free-flowing movement.
Another key consideration is the volume of each store. If a chain has committed to making the store experience the same regardless of volume, this lack of customization will lead to insufficient product availability for higher-volume locations, and increased waste for locations with lower volume.
A high-volume store can be running 12 percent waste (as a percentage of sales) but should be at 5 percent because it is not executing to the plan, while a low-volume store could be perfectly executing the merchandising plan and have an overall waste of 20 percent. Therefore, some stores should be managed via percentages and some managed via units, depending upon their volume.
To simplify the production and ordering processes for store personnel, it is best to generate a forecast that includes a merchandising factor.
The correct target for fresh-food waste will vary by organization and the formula being used to represent it. From my experience, an acceptable percentage of waste (to sales) for shorter shelf life product is approximately 15 percent (depending on volume), while products with longer shelf life should have almost no waste – if proper stock rotation occurs.
In summary, if a store sells less of an item and meets the waste goal, one can conclude the store did not have the product out at the right time of the day. If a store sells more than the forecast and is short of the waste goal, they either were not paying attention as well as they should be, or the forecast may require adjustment. If a store sells more than the forecast and meets the waste goal, they are doing an excellent job.
Kay Segal is senior partner and managing executive for The Business Accelerator Team. Having started her career in foodservice operations and moved into convenience retail marketing, Segal shares nuanced insight from years of relevant experience in foodservice, retail, media and business development.
People on the Move
CONVENIENCE STORE NEWS (June 28, 2018) — Business Accelerator Team (BATeam), a consultant firm providing business development and digital marketing expertise to retailing and foodservice, announced the appointment of Jay Price and Mike Flebotte as partners of the Group.
Jay Price joins the Group with broad consumer packaged goods (CPG) industry experience after holding numerous executive level sales and marketing roles in the confection, snack and dairy industries with Kraft-Nabisco and Dean Foods.
Mike Flebotte brings background of retailer, CPG and technology experience to the BATeam. Flebotte most recently was executive vice president of marketing with iControl Data Solutions. Previous experience includes marketing and operations roles with Ocean Spray Cranberries as well as category management positions with Ahold Delhaize.
Flebotte will lead a team to develop a suite of digital marketing services for the firm’s clients.
Marketing in the Modern Age of Retail
By Jackson Lewis
CSP DAILY NEWS (July 7, 2018) — Emerging technology and changing consumer behaviors are forcing retailers to rethink their marketing strategies, according to Kay Segal and the group at Business Accelerator Team (BATeam).
“Consumers are making decisions based on more than just the traditional four P’s of marketing: product, price, place and promotion,” Segal recently wrote on the BATeam website. She referenced a study from the Harvard Business Review, among other studies and articles, explaining how retailers need to change to meet the shifting demands of today’s consumers.
The article from Harvard Business Review (HBR) asserts that relevancy, not loyalty, is today’s key traffic driver, and that brands using the four P’s of marketing today are usually targeting a very specific customer archetype that may or may not actually exist.
The article builds on this theme, to say that every customer is different and has different needs. With today’s technology, not only do businesses have the capability to track these customers and their needs, but customers increasingly expect companies to deploy this level of marketing.
In order to keep up in this new world of retail, the HBR article proposes five instead of four P’s to follow:
- Purpose: Customers feel the company shares and advances their values.
- Pride: Customers feel proud and inspired to use the company’s products and services.
- Partnership: Customers feel the company relates to and works well with them.
- Protection: Customers feel secure when doing business with the company.
- Personalization: Customers feel their experiences with the company are continuously tailored to their needs and priorities.
Segal used Chicago-based Foxtrot as one example of a convenience-format retailer that exemplifies the new five P’s in her blog post.
This small chain of upscale c-stores carries a curated mix of local products in what Mike LaVitola, Foxtrot CEO and co-founder, called a “coffee shop vibe” when he spoke with online news source Curbed.
Segal wrote that the retailer has found success, not only because of the location of its stores but because the concept represents a curated presentation of locally-sourced products. Foxtrot also offers app-based delivery and uses its stores as a staging area to deliver items.
Digital Marketing Strategies Take a Lead at BATEAM
FUELS MARKET NEWS (July 1, 2018) — Business Accelerator Team — a consultancy providing business development and digital marketing expertise to retailing and foodservice — has been leveraging the industry knowledge and expertise of recently announced Partner, Mike Flebotte, to develop an extensive suite of digital marketing services for BATeam clients.
Marketing today needs to be an extension of the sales effort – before, during and after. Integrating digital and traditional marketing strategies is essential in the retail industry.
“Many small to mid-size companies often struggle with the best ways to incorporate digital marketing into their traditional marketing and advertising strategies,” said Flebotte. “It can be a challenge to establish and maintain a brand’s online presence, and it can be a costly process as well. BATeam has streamlined our approach to provide a comprehensive digital marketing service for our clients that is also cost efficient.”
“For each client we look at the totality of their marketing efforts and customize approaches to demonstrate shorter-term wins and longer-term opportunities,” added Kay Segal, Founding Partner. “Our digital marketing toolbox of website optimization, content strategy and creation, search engine marketing, social media management and e-mail marketing will add a significant component of what the team can offer.”
As a group, BATeam couples individual engagement strategies with sound digital tactics to maximize exposure in the industry.
Founded in 2015 by three experienced petroleum, convenience store and media professionals – Kay Segal, Paul Reuter, and David Nelson – the Business Accelerator Team (BATeam) is an outside-in catalyst assisting with insight, strategy, marketing and key industry connections. The consultancy provides business-development expertise derived from a deep understanding of what has worked with suppliers, retailers and media in retailing and foodservice.
Business Accelerator Team Names Two New Partners
SCOTTSDALE, Arizona, March 19, 2018 – Business Accelerator Team (BATeam), a consultancy providing business development and digital marketing expertise to retailing and foodservice, announced the appointment of Jay Price and Mike Flebotte as Partners of the Group.
“The more work we did with clients and the more opportunities we saw, we recognized the need to expand the services we provide,” said BATeam Founding Partner Kay Segal. “Jay’s and Mike’s backgrounds will allow us to better service current and potential clients by providing additional brand development and marketing work for them.”
Jay Price joins the Group with broad CPG industry experience after holding numerous executive level sales and marketing roles in the confection, snack and dairy industries with Kraft-Nabisco and Dean Foods. He combines a career of leadership positions with a customer-driven philosophy; his insights provide clients with a foundational understanding and production-driven sales-development growth planning path.
Mike Flebotte brings a unique and robust background of retailer, CPG and technology experience to the BATeam. Flebotte most recently was EVP of Marketing with iControl Data Solutions. Previous experience includes marketing and operations roles with Ocean Spray Cranberries as well as category management positions with Ahold Delhaize. Mike will be leveraging his combination of industry knowledge and expertise to develop and execute targeted digital marketing strategies.
BATeam was formed three years ago by a team rooted in the Petroleum and Convenience Store Industry (Kay Segal, Paul Reuter and David Nelson) who joined together to form this advisory and business-catalyst firm. Together, with their extensive experience in retail, retail petroleum, foodservice and business media, they have been providing information, education, market strategy and market analysis to a select group of clients.
About Business Accelerator Team
Business Accelerator Team is an outside-in catalyst assisting with insight, strategy, marketing and key industry connections. The consultancy provides business-development expertise derived from a deep understanding of what has worked with suppliers, retailers and media in retailing and foodservice.
Nelson Unearths Economic Rewards and Risks in Trump’s Priorities
By Greg Lindenberg
CHICAGO, April 7, 2017 — Alec Baldwin has nothing to worry about in David Nelson. The actor’s Donald Trump impression is in no danger of being upstaged by the economist’s attempt to channel the president’s hyperbole and outsized mannerisms and ego.
David Nelson, professor of economics at Western Washington University and founder and CEO of Finance & Resource Management Consultants Inc., Bellingham, Wash., took to the stage at the 2017 NACS State of the Industry (SOI) Summit with a red baseball cap and a truckload of “Trumpisms” that he brought back down to earth with this message: “America is becoming great again.”
“A new president is potentially a game changer,” said Nelson, who discussed how this “improbable event,” the election of Donald Trump, came about and what the implications are for the U.S. economy and the convenience-store industry.
With Trump’s victory, the Dow Jones Industrial Average saw its fastest-ever 2,000-point gain. Republicans’ economic confidence soared, as did that of mostly Republican-leaning small-business owners, Nelson said.
Going into the election, many Americans felt like the economic and political system in the United States was “stacked against people like them,” said Nelson. “The election gave new hope to at least a group of voters that previously felt that they weren’t part of the economy and nobody was really looking out for their interests.”
Their expectations are still high, he said, even as the political reality of what Trump might and might not be able accomplish begins to sink in. And despite these sentiments, Trump’s disapproval rating is very high, with 48% disapproving of his performance as of February, well below the rating of any other president in the last 50 years this early in his administration.
So, Nelson asked, will Donald Trump be able to “drain the swamp,” or “is Washington, D.C., a protected wetland?”
The Trump Agenda
Having set that political table, Nelson offered six items on the president’s agenda. Here are the highlights of Nelson’s take on each:
1. Defense of borders
The U.S.-Mexico border is 1,989 miles long, with 1,000 miles requiring a wall, as Trump has called for.
“If this comes about, it is a substantial construction project for this part of the country, and we know that construction workers are among the best customers in the convenience-store industry,” said Nelson.
2. Immigration reform
“If we were to close our doors to immigrants, we would find that over the next 20 years, our working-age population would go from 173 million down to 166 million,” Nelson said.
“Our country is richer and stronger because of immigration,” he said. “A measured flow of immigration can help our demographics, it can help our rate of economic growth, and I think it’s good for [the c-store] industry in terms of an enhanced customer base and enhanced employment pools. Immigration can keep the working-age population in the U.S. from falling.”
3. Infrastructure building
“Trump has championed his experience as a real-estate developer and a person who can get things done,” said Nelson. “We have paid for and are now eight years into this economic recovery, and there’s not a lot of slack left in the economy. Is this the time to embark on a massive, public infrastructure project, or is it a little bit late in the business cycle?”
“One of the things that got a lot of people in the business community excited about Donald Trump being elected president was his promise to roll back regulations,” Nelson said, praising an executive order to cut two regulations for every one added.
“Americans over time have become increasingly convinced that there’s too much government regulation,” he said. “People can see the connection between government regulation and an inability to get things done, and an increased cost that has to be borne by people that are providing goods and services that we can consume.”
5. Desire for fair trade
Trump has promised to bring back jobs lost to China, Mexico and other places; however, 88% of the jobs lost in U.S. manufacturing from 2000 through 2010 was the result of technological change, not offshoring or trade. And the economy has become much more integrated on a global basis, said Nelson. Countries open to trade have grown faster over time.
6. Tax cuts
The United States has the highest corporate income tax in the developed world at 35%. France is the next highest at 34.4%, while Ireland has the lowest at 12.5%.
Nelson said lowering the corporate income-tax rate would let businesses keep more income, making them more competitive; repatriate offshore earnings; mitigate double taxation; attract foreign businesses; and eliminate the reason for inversions.
Meanwhile, unemployment is slowly falling. Job growth has been “phenomenal,” he said. “We need about 50,000 to 100,000 a month just to keep up with the growth in the population and labor force. Over the last three months, we have averaged over 200,000 jobs added per month. … These people are great customers in your industry. This is a very bullish sign for the convenience-store industry.”
Also, average hourly earnings are up 2.8% over the last 12 months through February.
“People are shopping your stores because they have more real income to spend,” said Nelson.
(Reprinted with permission from CSP Daily News)
Economy: Cleared for Takeoff
By Samantha Oller
CHICAGO, May, 2015 — “Well , folks, we did it.”
That’s how David Nelson, president of Seattle-based Study Group 900 and professor of economics at Western Washington University, at the opening of his presentation referred to the United States’ economic recovery after the Great Recession. As of June 2014, the country finally had recovered all of the jobs it lost during the downturn.
It did take more than six years to do it, which is longer than previous recoveries. But Nelson, a keynote speaker at the summit, was clearly feeling bullish. In his annual outlook, he built a case for a U.S. economy that was finally in a good place.
“This has been a remarkably good news story for us in the last year,” said Nelson, citing an average of 269,000 new jobs created per month over the past year. “That is the best run we’ve had in employment growth since the mid-1990s when Clinton was president.” The country has seen more than 60 consecutive months of positive job creation; according to the most recent data, 5.1 million jobs were open, the highest level in about 15 years.
As of March 2015, the unemployment rate had fallen to 5.5%, which is considered a fully employed economy. The rate is forecast to average out at 5.3% for 2015 and 4.7% in 2016. And the rates have fallen by even a greater percentage among broader unemployment measures: the long-term unemployed, discouraged workers and the underemployed. Unemployment insurance claims are near 15-year lows.
“You get a different number depending on how you define unemployment, but the trend is unmistakable: They’re all down, down, down, no matter how you look at it,” said Nelson.
At the same time, the labor force is not participating at the rate it previously was. When the labor market improves, it’s expected that the unemployed will jump back into the pool. However, the labor-force participation rate has fallen since 2007 from 66% of Americans who are working or looking for work to less than 63% for the past year. Nelson said a few factors led to the stagnation: an aging population, a decline in youth employment and “labor-market scarring,” in which the unemployed basically “get used to not working.”
Retail average hourly wages have risen 36% since 2000, thanks to an improving economy, rising employment and growing worker scarcity. However, wages are growing at a slower pace than in the past, up 2.1% year over year, compared to a more than 4% growth high point before the recession.
This falling unemployment and wage pressure has triggered a wave of corporate giants—Walmart and McDonald’s, to name a few—to announce increases in their corporate minimum wage. “You’re competing for a lot of the same people as these retailers,” said Nelson.
A steady stream of state minimum-wage increases has also added pressure to wages. Twenty-nine states have minimum wages higher than the federal minimum wage of $7.25 per hour.
Growing alongside wages is turnover. The country bottomed out in 2009 with monthly turnover for retail jobs at 2%, or 24% on an annual basis. That has jumped to 3%, or 36% turnover for all retail on an annual basis.
This creates a real challenge for convenience-store operators, Nelson said: “What’s your plan to deal with a much tighter labor market, with the unemployment rate getting lower, quit rates increasing and wage pressure building, especially among lower-paid, hourly workers?” There is also one fewer applicant per retail position in 2015 than in 2014, he said.
Nelson pointed to retailers such as Kwik Trip who enjoy unusually large numbers of applicants for jobs, thanks to its reputation as a great employer. “What kind of culture are you creating to make people want to work at your organization?” he said.
Falling Oil—and Fuel—Prices
Putting more money in consumers’ pockets is the drop in oil prices, which are down nearly 60% over the past year. Nelson believes oil prices will remain depressed for a much longer period than any time in the recent past because of continued increases in domestic production, thanks to fracking and horizontal drilling from unconventional sources such as shale.
While Saudi Arabia produced 2.4 million barrels per day (bpd) more oil than the United States in 2006, the relationship has reversed. The United States now produces 2.4 million bpd more than Saudi Arabia, and it has become the top global producer.
Meanwhile, in an attempt to maintain market share, OPEC has not trimmed its own production rates despite declining crude prices, which has further increased supply, also pressuring oil downward.
There are clear winners and losers in this scenario. The U.S. economy should see a small increase in gross domestic product (GDP). The consumer comes out a clear winner, enjoying the equivalent of a $750 tax cut per household.
“That means a lot to a lot of households, in terms of their ability to have a bit of discretion in their budgets for spending,” said Nelson.
Also, retailers should benefit because their customers now have more disposable income to spend on purchases. The agricultural and transportation industries’ fuel costs have declined. And the auto industry is enjoying greater sales of profitable SUVs and trucks, rising from a 45% share of sales in 2008 to 55% today.
The Losers: the U.S. oil industry, which has had to cut its capital spending, active rig count and workforce, as well as the states that rely on oil revenue, including Alaska, North Dakota, Texas and Oklahoma. Also, manufacturers that supply petroleum producers are getting hit.
Despite the falling oil and gasoline prices, demand has not exactly rallied yet, held down by structural factors. U.S. consumers are driving fewer miles in vehicles that are more fuel-efficient. According to figures from the University of Michigan Transportation Research Institute, the miles driven per person has fallen 8% over the past 10 years, while the amount of fuel consumed per vehicle has dropped 14%. Miles per gallon by 2014 vehicle model year, however, has jumped 25%.
“That obviously has serious implications for the business you’re all in,” said Nelson.
Nelson highlighted other headwinds for the economy and industry. U.S. imports are rising, thanks to increased spending because of the growing economy, but exports are not. One reason is that while the U.S. economy is relatively strong, other countries—many in Europe—are just emerging from recession. Another reason: The U.S. dollar is “incredibly strong,” as Nelson described it, rising 20% over the past year, while other major currencies are falling.
“It puts the whole world on sale for people who hold dollars,” Nelson explained, “but it makes our goods priced on the world market in dollars very uncompetitive for the rest of the world.”
The current economic expansion is 70 months old, which Nelson describes as “middle-aged,” and long compared to the 60-month average. It is in line, however, with a trend toward lengthening periods of economic expansion.
“And I think we’ve got a ways to go—I don’t think indicators would suggest a recession is looming any time soon,” he said.
Also, the growth rate for GDP is slowing, averaging 2.8% from 1980 to 2000, for example, but only 1.4% from 2000 to 2012. Real GDP growth during expansions—the most recent happening in 2009—averaged 2.3%; the rate for 2014 was 2.4%. This pace used to run 4% to 5%. Why the lower rate? One factor is demographics, with a labor force growing at a lower rate.
While the economy is currently working through a soft spot—factory orders for nondurable and durable goods are on a decline—experts believe real economic growth will continue in the moderate to healthy range through 2016. With this in mind, the Federal Reserve has choices to make with inflation and interest rates.
“The Fed has a couple of objectives: They don’t want inflation, as they measure it, to rise above 2% for very long,” said Nelson. “But they would like it to be about 2%.” Core inflation is now 1% to 1.5%.
While the inflation rate is expected to rise only 0.1% to 0.2% in 2015, it should grow 2.3% to 2.6% in 2016. “Near-term, the Fed doesn’t have an inflation problem, but farther out, they will. They have to be thinking a little bit ahead,” said Nelson.
The Fed’s pace of tightening monetary policy is up for debate. Arguments for a slower pace would be low inflation, the strong dollar, export weakness and a recent cooling of job growth in March. Factors that argue for a faster pace: low unemployment, the strong economy and the fact that interest rates need to at some point normalize from their record-low levels.
“We just don’t have short-term interest rates near zero hardly ever, except in this recent period,” Nelson said, “and long-term interest rates in the 2% to 3% range.”
Most think the Fed will increase rates sometime in the third quarter, either in June or September, and that they will increase slowly. Expect an increase in interest rates of 0.75% to 1% between now and 2016, but they should remain low relative to historic norms, he said.
Consumers to the Rescue
“Consumers are the bright spot of the economy,” said Nelson. Real consumer spending rose 1.5% from January 2014 to January 2015, which is “very, very bullish for you and your business, and very bullish for the economy.”
Among top consumer spending categories, food and beverages, foodservice and energy goods are industry-relevant areas.
New vehicle purchases are also on the rise. Light-vehicle sales totaled 16.5 million in 2014; they are forecast to hit 17.2 million in 2015 and 17.3 million in 2016, according to Bank of America Merrill Lynch and Comerica Bank. “That’s a huge employer, a huge impact on the economy as a whole,” said Nelson.
Also, while it has not fully recovered, the housing industry is on the mend—a good sign for the convenience industry, which serves the construction class of trade. Nelson pointed to a sharp increase in home equity as a share of household wealth. “We’re becoming more confident that maybe there is some equity in our homes,” he said.
And a steady increase in housing starts over the past few years is yet “another honestly bullish sign for the economy.”
“All things considered, I think we can see the economy continue to grow, with the consumer driving the way,” said Nelson, citing gains in real consumer spending, home price appreciation and construction.
With this greater purchasing power in mind, retailers need to seriously consider the following question: “How can you capture that?”
Republished with permission from CSP Daily News
Industry Executives Launch National Business Catalyst Firm,
Business Accelerator Team
Firm exists to help suppliers succeed more quickly & provide operators with tools and services, which positively influence their business and the overall industry
(Scottsdale, Arizona –July 27, 2015) Kay Segal, founder of Segal Insights; Paul Reuter, founder of Kreative Collaborations & Midwest Retail Group; and David Nelson, PhD, founder of Finance & Resource Management Consultants (Study Groups) have joined together to create Business Accelerator Team (BATeam), an advisory and business catalyst firm.
These partners of the BATeam are nationally known for positively influencing the retail, retail petroleum and foodservice industries. With extensive experience in retail, retail petroleum, foodservice, business media and industry analytics, the BATeam will provide information, education, market strategy and market analysis, as well as key connections within the industry.
“Business Accelerator Team combines the expertise of three industry professionals with extensive and varied knowledge,” Segal said. “Paul, David and I cannot be more excited about this combined new venture, built upon the desire to collaborate – with each other and with clients.”
With an extensive background in foodservice and retailing with Sky Chefs, 7-Eleven and Circle K, among others, Segal moved into the media space 20 years ago and spearheaded the development of industry education for CSP Information Group, setting new standards. In May 2015, Segal launched Segal Insights, a consulting firm. Segal Insights will now fold into BATeam, bringing current clients to the larger firm.
Segal, Reuter and Nelson are senior partners, and Segal will carry the additional title of managing executive.
“I have known Kay and David for numerous years,” Reuter said. “Their combined expertise, insight and integrity will help us accelerate supplier and retailer business, positively impacting the industry.”
Reuter brings nearly five decades of industry experience as an entrepreneur, journalist, editorial director, speaker and collaborator, resulting in an extensive network in the business community. In July 2012, Reuter, the founder and CEO of CSP Information Group, sold the business to CSP Business Media, now Winsight. During the past three years, he has launched two businesses, including Midwest Retail Group, the largest U.S. 7-Eleven franchise. He also has provided his consulting expertise to many industries and serves as a Senior Advisor to NRC Realty & Capital Advisors on M&A transactions.
Nelson has been a university professor of economics and finance for more than 40 years and has taught in the U.S., Japan, and Mexico. He has been selected as a Distinguished Teaching Fellow and as MBA Professor of the Year. Nelson is the Founder and President of Finance & Resource Management Consultants, Inc., a firm that provides facilitation and financial benchmarking services for Study Groups. Today, Study Groups includes more than 250 companies and 450 executives from throughout the U.S. He has a keen understanding of economic trends, coupled with extensive insight related to industry financial analysis, and is a frequent speaker at industry events.
“Our team is focused on helping others succeed,” Nelson said. “I am thrilled to be working closely with Kay and Paul, two visionaries in the market space.”
About Business Accelerator Team
Arizona-based catalyst firm Business Accelerator Team (BATeam) helps business leaders forge new paths with “outside-in,” thought leadership. With independent vision and opinions steeped in first-hand experience, analysis and strategic growth planning, Business Accelerator Team is a strong virtual asset to an organization with more than 100 combined years of experience.
For more information, email firstname.lastname@example.org.
Living a Grateful, Balanced Life
By Paul Reuter | Published in CSP Magazine, August 2015
Last month marked the third anniversary of my selling CSP Information Group. Time seems to fly when you start collecting Social Security checks and become eligible for AARP senior discounts. Candidly, I feel younger and more energized today than I can recall. (OK, my annual Mayo Clinic visit does bring me back to reality).
Mitch Morrison asked if I would write about what I’ve been doing since I turned over the reins to Mike Wood Jr. Although I always enjoyed writing my monthly CSP column, putting my name onto hundreds of words that would be judged by about 200,000 readers added stress to my life. But it made me ask, “What value can I offer?”
In the past 36 months, I have traveled to South America and Spain, including a 500-mile walk of the Camino de Santiago. I have crossed America in an RV. I started two new businesses, including one with Jim Fiene; we have 16 7-Eleven franchises in Wisconsin. The other, Business Accelerator Team, just began with industry veterans David Nelson and Kay Segal. We share the same goal: to accelerate knowledge growth and thus business growth.
I also spent two years involved with a personal growth organization, gaining a new appreciation for love and life. I have spent quality time with my love and my family, including my eight grandchildren, lost 8 pounds and ran a few marathons.
I am, in an understatement, not one to let time pass by me.
Time is a gift, and this new stage of life has allowed me to expand my pursuits, observations and knowledge. So what have I learned that might be of value to you? In a word: balance. Categorize your life under four headings: emotional, mental, spiritual and physical. Of course there are concrete daily metrics such as financials, career and goals, but I suggest putting those details under one of my big four categories.
Words to Live By
We live most of our lives off-balance. Too often, we disregard our physical health, our spiritual callings and our family time. And you could say I have not always lived as I now preach. That’s why I’m sharing my observations. That said, work isn’t necessarily a necessity. It can and, ideally, should represent a part of who you are, as well as a source of passion and creativity.
For one, identify mentors in your life. I suggest three, but any number you deem best works too. It is important to have people you respect who are open with their wisdom and counsel. One of my most important mentors is Drayton McLane, a man who doesn’t know the word “quit.”
I confess that some of the ideas I present to you are taken from Drayton. I still reflect on what he told me 20 years ago when we became partners. “Paul, there are only three things we need to do in business: Don’t break the law, do not compromise your values and integrity, and make a profit,” he said.
Another saying I have found particularly meaningful: “When you rest, you rust.” I translated that message into my day-to-day goal setting. Keep life in balance, but realize that life also offers many new and wonderful things to do and explore.
When people ask me what they should do in business or with their lives, I respond with a question: What are you passionate about? Follow that passion.
Another important quote comes from my beloved friend Bill Douglass: “It takes a village.” Personal success is generated in large part from the quality of those you associate with. Don’t live life in a vacuum. Appreciate the role you can play for others and what others can—and have—played for you.
Finally, “You’re never too old to be what you want to be.” For many, who we want to be will evolve over time. Drayton spins this a bit differently: “When you are comfortable, you are not growing. Move out of your comfort zone.” I did, not easily, but hey, no pain, no gain.
The best leaders put people ahead of balance sheets. I have been consulting with NRC Realty Corp. on some M&A deals. The common concern I’ve found from owners is not only about money—it’s very much about what will happen to the people, the team they care about, once the business is sold.
Above all else, I would offer you two other powerful words: forgiveness and gratitude. One does not have to be a Catholic to agree that Pope Francis is having a profound influence. He has committed the church to an ethos of mercy and compassion and has published nearly 10,000 words on these essential values.
Having a bad day? Stress is too great? Instead of taking drugs or throwing a tantrum, get out a piece of paper and a pen, and let gratitude flow. I guarantee the list will overwhelm whatever troubles you. Keep that sheet and look back on it.
I acknowledge that for me, work is part of my balanced life. I like innovating, building, mentoring and being a part of success. Retirement from one career should be a springboard for a new round of excitement and growth.
I’d love to hear what’s inspiring you. You can find me at email@example.com
Executive Interview: David M. Nelson
Interviewed by Denny Rubin | Published in NRC Newsletter, Summer 2015
Denny Ruben: What do you see happening in the economy near term?
David Nelson: We have now entered the seventh year of economic recovery and are now already beyond the average length of post-WWII economic expansions. Still, I believe the economy has room to grow as we see solid gains in employment and consumer spending, strong demand for autos and light vehicles, and home building and prices on a rebound. While lower energy prices have on balance been a positive for the U.S. economy, the Energy Belt is seeing lower investment and employment. Manufacturing which supports the energy industry like steel production has been hurt and a strong dollar is making it difficult for U.S. manufacturers to compete in a global marketplace.
Ruben: What is the Fed going to do?
Nelson: They are going to raise interest rates, but the question is when and by how much. As recently as March, most market forecasters thought that the first rate increase would be in June, but now the earliest expected first move is in September and an increasing number think it may be delayed beyond then. Long term we can’t have interest rates that are negative in real terms so the Fed does need to begin normalizing rates as soon as they think the economy is able to handle it. Given the very low current rate of inflation and global uncertainties, interest rates are likely to rise slowly and remain low relative to historical norms for the foreseeable future.
Ruben: Do you believe the challenges in the Chinese marketplace, coupled with the challenges for the European Union from the Greek crisis could alter the anticipated Fed move?
Nelson: The Fed will make its monetary policy decisions on the basis of the strength of the U.S. economy. China’s growth slowdown is part of the normal process of a maturing economy. The financial situation in Greece is very serious and the possibility of a Greek exit from the Euro is looming larger; however, the direct exposure of foreign investors from this crisis is limited. While a worst-case scenario of a Greek exit from the Euro leading to sizable financial and economic impacts on the global economy cannot be ruled out, it remains unlikely.
Ruben: With the lower gas prices, are consumers actually spending their gas savings?
Nelson: They are, but it took a while to get there. As motor fuel prices fell last fall, initially there was a jump in the personal savings rate and retail sales actually fell. Part of the decline in retail sales was attributable to the fact that consumers were spending less on fuels. Once consumers began to sense that the energy savings were more than a short-term, transitory shock they began to adjust their spending upward. By May 2015, retail sales (excluding gas) were up 3.5% year over year. Among the top 10 consumer spending categories, c-stores have the opportunity to capture a share of this increased spending in three categories – food and beverage, food services, and energy goods and services.
Ruben: Have lower gas prices and a revived economy done anything to reverse the decline in vehicle miles traveled?
Nelson: Absolutely. The Federal Highway Administration recently released April miles-driven figures that show a 12-month moving average of 3.076 trillion miles, which is a new record high and reverses what had been a 6-year decline. Year-over-year miles driven have increased 3.9%.
Ruben: What’s happened to the demand for gasoline?
Nelson: More miles driven has won out in the short run over improved fleet efficiency resulting in a 4% year-over-year gain in gasoline consumption according to the Energy Information Administration. Consumers have also changed the mix of new vehicles they are buying from 45% trucks and SUVs at the 2008 oil price peak to 55% truck and SUVS more recently.
Ruben: What’s happening to spending inside the store?
Nelson: Spending inside the store is on an upswing as well with year-over-year gains in c-store merchandise sales up 4.0% per retail location for the 12 months ending in April 2015. Considering that the rate of inflation has been essentially flat during this period of time means that these are real sales gains. Categories showing strong growth are packaged beverages, food service, salty and sweet snacks, frozen food, edible and perishable grocery, and health and beauty care.
Ruben: What are you seeing for motor fuel demand?
Nelson: From my work with Study Groups of petroleum marketing firms who operate convenience stores, it is definitely on an upswing. Using a same-firm sample of 88 companies operating almost 5,000 c-stores shows year-over-year increases of 2.2% in motor fuel gallons sold per retail location for the 12 months ending in April. Comparing the monthly change from April 2014 to April 2015 shows an even more substantial 3.3% increase.
Ruben: Can you explain a bit more about Study Groups?
Nelson: Sure. Study Groups provide a mechanism for a group of non-competing marketers to get together two to three times per year to exchange experiences, solutions and ideas to improve their businesses. On a monthly basis, members receive comparative financial and operational data to benchmark their performance against others in the group and against broader averages. The overall objective of a Study Group is to help members improve the performance of their businesses. Study Groups just celebrated its 30th anniversary. Almost 200 of our study group community celebrated the occasion with facilitators, support team members, study group members and friends getting together for a Seminar at Sea in the Western Mediterranean. Our website www.studygroups.com provides additional information or we can be emailed at firstname.lastname@example.org.
Ruben: Are there Study Groups for different types of businesses?
Nelson: Yes, there are 46 separate groups representing a number of different business lines including full line jobber, wholesale (three types: commercial, dealers and convenience merchandise), lubricants and propane. We also have groups focused on specific functional areas such as food service, information technology, fuel management, operations management, next generation and CFO. Members of groups range from owner/CEOs to senior management responsible for functional areas in which we have a group offering.
Ruben: We understand that you have recently partnered with Kay Segal and Paul Reuter to form a new venture – the Business Accelerator Team. What is this all about?
Nelson: I am honored to have been invited by industry veterans Kay Segal and Paul Reuter to be on the BATeam. BATeam was formed to help companies succeed more quickly by providing insight, strategy, tools and consulting services to both suppliers and retailers. Today’s market place is extremely competitive. Within any competitive space, gaining traction and accelerating growth can be the determination of financial viability and long-term success. BATeam is a business catalyst firm focused on helping others reach their goals more quickly.
Ruben: How does the BATeam differ from Study Groups?
Nelson: Study Groups is focused on financial and operational benchmarking and on peer-to-peer sharing and learning. We see the BATeam filling a different void for knowledge, education, insight and consulting services to assist retailers and suppliers accelerate their growth. For more information, contact email@example.com and visit our website at www.businessacceleratorteam.com.