Rmarts: BATeam Maximizes Gross Profitability

About Rmarts

The Razowsky family has been operating c-stores in Chicagoland for 60 plus years. They currently have 12 stores and the operation has transitioned from Grandfather to son and now moving to the 3rd generation. Their c-stores have been operating under the Minuteman brand, have strong forecourt fuel presence (Citgo, Shell, Mobil and AmStar) and although clean and organized from an operational standpoint, the facilities have an older look. Like so many small chains, they have a thin management team, but loyal and tenured store managers. As they plan for the future, thoughts of how to transition operational ownership, and how to maintain profitability in this competitive industry is weighing heavy on the Razowsky family.

Why BATeam

BATeam possessed both the broad knowledge and detailed structure needed for Rmarts. BATeam lead consultant, Bill Nolan, began the engagement with weekly meetings, financial analysis and employee assessment. Once needs were assessed, goals were prioritized for team development. Bill enhanced his knowledge and guidance as needed with the skills of other BATeam partners, meeting all needs of Rmarts management.

Areas of Need

Marketing, Operations, Financial Management Coaching and Generational Transition.

Business Challenges

The primary revenue of the Minuteman c-stores has been driven by strong fuel and tobacco sales. Inside sales are certainly described as traditional c-store product and merchandising, supported by vendor and warehouse product assortment recommendations and promotional pricing.

Looking into the future the Rasowsky family recognized that the industry is changing. Fuel and tobacco will not continue to be the holy grail to profitability, food service has become the next “new thing” and the Minuteman c-stores have limited food service and are not generating the inside sales to weather the potential decline in fuel or tobacco.

In addition, studying the P&L shows a need for margin improvement, inventory COGs management and expense controls to generate greater net income, so they can reinvest in the business.

Objective

Successfully enhance the skill set of 3rd generation ownership, allowing them to fully take-over business strategy, marketing and operations in a profitable and sustainable manner.

Approach

1. Initial meeting and store visits with the Rmarts executive team to understand the current business strategy and future outlook/objectives for the family.
2. Determine the strengths and opportunities within the business including: store operations team, executive team, marketing sophistication & facilities.
3. Understand Rmarts’ goals, concerns and needs to enable BATeam to support his plan to develop a successful operation going forward.

Results

BATeam helped Rmarts Increase Gross Profits by 7% in two years!

1. As Rob separated himself from the day-to-day management, BATeam assisted Ryan in reviewing financials (to find profit opportunities), store execution (to find in-consistencies from store to store), which resulted in improved inventory management (Tobacco & Cold Box) resulting in significant cash flow savings, improved marketing plans with better pricing and penny profit promotional strategies, resulting in greater GP$ generated from merchandise sales (less reliance fuel).
2. Coordinated monthly meetings/calls to more consistently manage and create quarterly promotional plans, verify results, and most importantly generate a margin analysis tool to help improve merchandise margin (improving margin by 2 basis points then 4 basis points).
3. On-going support with Ryan in negotiating store rents, vendor costs, budgeting and acting as an objective 3rd party to offer guidance as he takes over as the new President of the company. Remodel developments, warehouse contract negotiations, fuel contracts and helping to create standard requirements for each position within the company.