Andrew Swedenborg: How Experience is Reinventing Convenience Retail

Andrew Swedenborg: Food is becoming the north star for convenience. And I think probably if we go back, we give credit where credit's due. I think Wawa and Sheets were kind of the first movers of a more quality food program. Or if you've ever been to Japan, you could give 7-Eleven credit in Japan, as convenience has continued to evolve. And I'd like to thank myself and people I've worked with over the years, we're helping drive that narrative of changing the perception of what the convenience store experience is.

Greg: Hey gang, Greg here. The Built to Suit podcast, built to build what is next. And man, we have been focusing on a lot of highly technical topics over the last few episodes. But as an architect, I am real excited, super excited to talk about design. Frankly, I'm not sure why I'm talking design to a finance guy, but it's a finance guy who really, really, really loves design. Andrew Swedenborg, welcome into the pod, my friend.

Andrew Swedenborg: Thanks for having me, Greg. I'm really excited to be here for sure. And I'm a reformed finance guy who loves design.

Greg: You're not trained as a designer.

Andrew Swedenborg: No, I'm not a designer.

Greg: But yet at some point along the line, you had a love for this phase of your life, which isn't finance. No.

Andrew Swedenborg: No.

Greg: And so was it being out there talking to the customers that drove your love of design or was love of design just something that got you to a spot where, "Hey, I'm business developing and I really love design." Which way do you think it kind of

Andrew Swedenborg: Happened? I think it happened like this. I've always been a hands-on person. So everyone knows me that I like to build things. I don't really like to fuss around with computers and iPads and things like that. It drives me crazy. So being somebody who's got a hands-on, tangible, I like tangible things. So when I got into the design side of the business, particularly the design build side of the business and build being, again, not design build like building a building, design build, building the interiors of retailers, I was starting to see that basically the fruits of the labor, you would be designing something and being leading a design effort. Again, I'm not a designer, but I lead design teams. So that in and of itself is, I should get a gold medal for being able to lead a bunch of creatives, but humanizing design for people that don't necessarily get out in front of customers.

Andrew Swedenborg: A lot of designers don't even ultimately see what I ultimately got in store, what they designed, but they don't get a chance to go out and see it. And so I've had the opportunity to be on that side of the equation, leading the teams, but also on the other side, seeing it implemented, leading that type of stuff. So being that more tangible person, I just was hooked. I was hooked. And I have over my career been in a situation where we didn't have design as an offering and maybe we'll go into it, but that to me just didn't translate. It didn't translate to what the value you can bring to a client. In our case, it's almost all retail every once in awhile, be an office interior or something like that, but in a branded environment, but what you can bring in terms of value and results, returns, whatever you want to say through that process.

Andrew Swedenborg: And I have not looked back. I've been in this industry about 20 years now after doing some other things.

Greg: No, there became a portion in my career when I could look at something on a set of drawings and understand what it was going to look like in real life. And then you could walk into an empty building and go, "That's really going to look great." I said, at what point in your career, in your design/finance/business development career, could you see something on the page and mentally translate it to the building saying, "This is good."

Andrew Swedenborg: I go back to my real estate days. I was classically trained in real estate and finance and construction management. So I kind of wanted to be ultimately a developer, wearing a three piece suit and a hard hat was kind of my idea, so a true developer. And so I had the opportunity to get into the institutional real estate business. And ultimately to answer the question is as development was picking up in the late '90s, had the opportunity to work with some really strong entrepreneurs developing Whole Foods, Crate and Barrel, shopping centers and all this kind of stuff. So I kind of got hooked on retail, that's where the retail part came. And then it was that tangibility. So it was really quite early in my career that I knew I was that guy, but it wasn't until I exited business school and landed at KRS where we had all this talent, both design, everything we were doing, 30 year old company started by Entrepreneur Ed King.

Andrew Swedenborg: We had all this raw talent. We just didn't know how to package it and bring it to market. And once we answered what's our value proposition and I had a hand in leading that development of that, then I knew that this was for me, that design space, that design build space and we're off to the races.

Greg: So you bounce through a job and end up at where you are now, which is Advancement Branding. Advancement Branding is a little bit different animal than say KRS. Talk to me about the differences, maybe what brought you there first. And then secondly, what's kind of unique about this particular offering that you do

Andrew Swedenborg: With them? Yeah, absolutely. And if we talk about Advancement Branding, it actually goes back a little bit further. I worked with the legacy or pre-advancement branding quite closely in a collaborative role, helping them facilitate their design build efforts to their customer base, which was, it was called Identity Services. Its claim to fame was Chevron being their largest client. So Chevron, everyone knows Food Marts, things like that back in the day, in the '80s. And so I was working with them in my KRS days supporting their efforts. They were an asset light manufacturer, which means they build some things, but not everything. So fast forward as identity services needed to evolve, it spawned out advancement branding through a couple of partners, a couple partners. So I knew these people already and I had worked with them for a long time. So fast forward to before I joined them, I was actually trying to acquire them.

Andrew Swedenborg: I had an opportunity to acquire them on behalf of my former organization. And they had built a nice business, Advancement Branding had focused on mostly petroleum marketing, so C stores, but all small format. So not necessarily grocery stores and -

Greg: Little different from

Andrew Swedenborg: King. Power centers.

Greg: Kind of smaller. And you were probably doing junior boxes, you're probably doing TJX and some of these other guys. Yeah, exactly. So you were just doing stuff, category killers.

Andrew Swedenborg: Category killers and stuff like that. And so they built this business based on really a design, very much similar design, build, install, program management rollout. So great design chops, but small format expertise in the smaller stores and a more asset light model to the fabrication process where we do fabricate our own goods, but we also lean on partners too across what we call the totality network of being able to scale and provide the intersection highest quality and best value because it's not all just what we can do for you. It's what we can bring to the table.

Greg: Certainly being an integrator sometimes is better than trying to solve every problem. You don't have to sell the beans and the corn,

Andrew Swedenborg: Right? Yeah, that's right. And owning the process, owning the process that this is better for you, Mr. Customer.

Greg: Yeah. We've seen some folks in the grocery equipment space kind of do the same thing. Some make their own stuff, but yet some just kind of go out in the market and pull the best things of everybody together. So you're kind of a hybrid between those two, you think?

Andrew Swedenborg: Yeah, I would say a hybrid between those and we're able to negotiate pricing because we're giving this individual X amount of business and then that's their subject matter, that's all they do and we bring it together. So it really does work.

Greg: Before we get into C-stores specifically, react to this statement. Design can't just look good. It has to help the client sell more.

Andrew Swedenborg: Well, I love that statement because I think I'm one of the pioneers of pushing back against the creativity of design and taking the position that it has to do something for the customer. It has to drive sales. Design has to drive an outcome because if you just design for the sake of design, and we see this a lot, a lot, need a new store package. Well, what did it do for you? I don't know. That kind of thing where I've coined the phrase, what do you do through design? We help you sell more stuff. That's what we do. And that's the difference. And I think that's why you're seeing a change in the landscape of what historical design firms, what they would charge, the genius fees, all this other stuff because the results weren't being realized. And now it's one of results driven design.

Greg: There's a line of sight to the art, but there's not always a line of sight to the return that you get for how you place it. And it's hard to do that. I mean, what are the kinds of things that can be tested that you can kind of look at?

Andrew Swedenborg: Well, first of all, there's lots of things. And I think you need to look at, when you say cash register, you're talking about what can I sell? And I think it really, to the degree you can, and maybe this is more in the C-store space, but it really starts with the moment somebody comes onto your site, when somebody drives onto your site. Now, if it's a retailer that's in an inline mall or inline shopping center or something like that, maybe you're not going to be impacting that. But you want to start by looking at that total experience. So not just doing stuff for the sake of doing, start there. So if we take a new to industry convenience store, let's say, let's say we want to start by looking at all aspects of the engagement from the outside. So curb cuts, the canopy placement, entrances, size of the parking spaces.

Andrew Swedenborg: Nothing annoys people more in door dings.

Andrew Swedenborg: If you have a car wash, amenities, how do you interact with the fuel offload? All of that starts that experience. And then we take that through design, we take that into the sequencing of design, which is now your store layout. What are your programs? What are your sight lines? How do you design restrooms that drive traffic? Let's be honest, that's an important thing. All of that. And then we take you through that design process that starts ticking off those specific highlight points that ultimately makes a retail experience that people choose to go to versus just stop at.

Greg: So you jumped right in the middle of C-stores, which I think is - Oh, did I get

Andrew Swedenborg: Ahead of myself?

Greg: Sorry. No, you didn't get ahead of yourself. It's just you took us to a certain spot where advancement branding takes you and that's kind of your sweet spot. Want to make everybody know that. Most people think they understand convenience stores because they've gone to them and they should understand them. But what do you see maybe that other customers miss? You were talking about sequence and approach and cleanliness of restrooms, but what are some of the other things that a normal customer, well, normal customer might miss?

Andrew Swedenborg: Well, there's a lot of answers to that question. I think the first thing is that you have to take a step back, and this is advancement branding's expertise in design. You have to take a step back and understand the convenience landscape is changing. I think you made a comment to me about, I don't know, you try to avoid X, Y, Z experience at a convenience store because that's what you have in your mind. Well, what we see is an opportunity to garner customers multiple parts of the day for multiple reasons. It's obviously fuel, food, restrooms, and then ancillary amenities like car wash, same thing, EV charging. Then from there, we look at, okay, well, how do I create something that's destination worthy so people choose to stop at our location or locations? I think there's a stat out by NACS that I don't want to quote a quota, but I think the stat is people will drive between five and seven minutes out of their way to go to their destination convenience store.

Andrew Swedenborg: So to your question, one of the things that we see is, and we will arch our back, is this misnomer that speed is everything in convenience. That is not true. That is not true. People go for different reasons. We talked about the concept of there's this idea that some of our customers have that if I don't have it displayed, I can't sell it. Well, the other side of that is if you have so much stuff in your store, there's all these shippers and all this stuff, people walk in, there's so much noise. All they do is do what they came for and leave and get out of there. So no basket size growth, no impulse purchasing, none of that kind of stuff. So we take a step back and we take a, I wouldn't say contrarian approach from the design side, but an approach that says, we know what we're talking about and this is how we're going to help you sell more stuff through our knowledge of being able to design high performing stores.

Greg: So you told me food is everything about the new convenience platform. So tell me what changed and why you think that is.

Andrew Swedenborg: Well, I think food is becoming the north star for convenience, right? And I think probably if we go back, we give credit where credit's due. I think Wawa and Sheetz were kind of the first movers of a more quality food program. Or if you've ever been to Japan, you could give 7-Eleven credit in Japan, right?

Greg: Just not Laredo Taco,

Andrew Swedenborg: Right? Yeah. Well, I don't know. Well, they bought that from Stripes, but actually I've only eaten at one of them and it was a while ago. But because obviously food is three parts, there's three times a day to capture typically, breakfast, lunch and dinner, we call that day partying. And we've had some inspiration of some early movers. As convenience has continued to evolve, the moniker of Cokes and smokes continues to be broken down, defeated, right? Where cigarettes are obviously historically were a high category. Now they're a very low growth category. Some of the smokelesses are growing, but as a whole, it's not. And so the convenience industry, and I'd like to think myself and people I've worked with over the years, my time at Paragon Solutions, I think we're helping drive that narrative of changing the perception of what the convenience store experience is. And so as that has changed and the ability to capture more customers on a daily basis, that food became something we had to stretch for and start doing well.

Andrew Swedenborg: And so as that has gone on, you'll see chains like Casey's. I believe Casey's, they've got about 1800 locations. I think they're the number two seller of pizza in the United States, and they're a convenience store. So what does that tell you? Well, it tells me that their product is not bad. They make their dough every day by scratch and they became known for their pizza program. And as that has spread, all tides rise. And so you're starting to see high quality food programs enter these C-store chains. And I'm not talking just the big ones, right? I'm talking the operators that 20, 30 stores, but they're realizing that this is the number one on an operations side, if done correctly, it's their highest margin area, and they don't necessarily want to be the traditional franchise model and all that kind of stuff, so like McDonald's or whatever.

Andrew Swedenborg: So they develop their proprietary food programs and then they become known for something and it's off to the races.

Greg: So you mentioned Casey's, you mentioned Wawa, you mentioned Sheets. Those are people that are doing stuff right. I mean, if you get into that mid-tier operator like you were talking about, who in the mid-tier are doing some cool things with food and what are they doing?

Andrew Swedenborg: Well, there's a lot of them. I think there's just a nice article published. Freshies is doing a great job with food. They ultimately committed to food, and I think they're doing a great job mid-tier. Envo is doing a great job with food. Each one's a little different, but you're having fresh delis, pizza, taco, burrito type stuff, depending on who it is.

Greg: I was thinking personally, we did a number of Parker stores up in the -

Andrew Swedenborg: Parker's Kitchens does a tremendous job.

Greg: And again, they also have some salads and they have that salad offer that works out. It's kind of an anomaly, I think, for the convenience space. And then we're seeing some real outliers that you wouldn't even consider convenience, Buc-ee's being one of them.

Andrew Swedenborg: They do great food service, by the way.

Greg: It's amazing.

Andrew Swedenborg: They do a lot of chopped brisket sandwiches.

Greg: They do brisket on the board. It is 100% true. But you view them more as an entertainment destination more than a convenience platform?

Andrew Swedenborg: Absolutely. Absolutely. And they're doing a great job, but they are a 50 to 75,000 square foot destination that sells gas. Well, here's what they do well. Food, they do tremendous food. They do a tremendous private label program. Some of their off the shelf or prepackaged foods, private label, the Beaver Nuggets, right? The jerkys. The jerkies. And then they really attract, well, two things. One, let's go back to their brand, the Buc-ee, the monolithic brand that they've developed. You'll find that on people's shirts walking in Stockholm. Talk about doing something right where you are a purveyor of gas and fuel and only auto fuel, and then you've built that. And of course, any conversation about Buc-ee's, you must mention their commitment to restrooms, right?

Greg: Absolutely.

Andrew Swedenborg: You must. One of the things, and this isn't necessarily Bucky centric, but one of the things when we talk about we help you sell more stuff through the design process, you have to remember that anecdotally, 50% of humans on the planet are female, but their money spends the same way. So Buc-ee's has done a great job helping the rest of the industry write the narrative of the restroom, the clean restrooms, without question and spacious and all of that. The way to drive sales is to capture new customers, right? So you can capture them in many ways through your food service program, through your drive-through, whatever these are. But to gain customers that would never step foot into a convenience store, i.e. My wife, that is a win. And

Greg: That's what Buc-ee's

Andrew Swedenborg: Does.

Greg: I can barely get by one.

Andrew Swedenborg: Exactly. You go in for the entertainment. So if they're the leading edge of what to do, we're taking inspiration. And designers do take inspiration from emulators, people doing a good job, and you should, right? They're doing a good job. You don't have to have a 70 stall restroom to be successful, but you have to understand it's part of what you're selling in the convenience store business. You're doing that. And then for your female customer, you're selling safety. The number one concern of female customers in a C-store environment is personal safety. So that's lighting, sight lines, no hard corners where they can get stock and stuff like that.

Greg: Obviously, your opportunity when you came on to advancement branding was entrepreneurial in its own right. You've talking about maybe wanting to purchase them and then kind of hooking up with them. So obviously we've also got in the convenience space, a lot of the major petroleum companies have gotten out of the space. So that's created a lot of opportunities for the smaller operator. I mean, what are you seeing that the smaller operator might be able to do better than the big operator?

Andrew Swedenborg: A lot. So just in context, in the '80s, if you will, a bulk of convenience retail, I like to just refer to as Food Mart, was owned by your major oil companies, Shell, Texaco, Mobile, whatever. And ultimately, they're kind of institutional. Ultimately, they figured out a couple things. One, that people don't tend to buy gas because of the brand of gas it is, i.e. Chevron, Shell. That does not mean much to people. They buy typically on price and convenience. Or back before we are in the world we are today with Apple Pay and everything else, there used to be something called a fuel credit card. Shell card, everyone had, that's how you got your gas. And it created stickiness to get them in the door. Well, when that went away, that went away and they started to realize that they're not very good at retailing.

Andrew Swedenborg: They're good at refining fuel and getting it where it's supposed to go, but they're really not good at retail. So with the kind of institutional herd mentality, once one started to sell, they all started to sell, the retail portion, the retail portion. So to get to your question is the smaller operators are the ones who actually own and operate stores, engage with customers, can pivot, course correct, add, remove programs that don't work, things that aren't selling, all of this kind of stuff. And in time, they built up businesses that far exceeded anything that the big oil could do, given those factors I said. And so we've seen these businesses flourish and now we're actually seeing big oil thinking that they are missing out. So we're seeing a couple of them get back in, and I believe there's one that got back in and is about to get back out.

Greg: Because they're just not there.

Andrew Swedenborg: That's just not what they do. That's just not what they do. And if you factor in the equity pieces that I'm talking about and the reasons people come to a convenience store, it's not because it says sit go. Nobody cares.

Greg: Now the individual operator, you talked about this being kind of a pretty mature market and we're seeing a bunch of transitions from first generation operators to second generation operators, a much younger operator. What unique things do they bring being from a different generation?

Andrew Swedenborg: It's a great question. And we're seeing a lot of it. We're seeing consolidation, which you kind of touched on, I'm sure we'll get into it, but we're seeing the second generation of many entrepreneurs or family businesses that were a lot of times started by fuel distribution. So I'm the local oil distributor, that type of family business. Or I immigrated to the United States and had an opportunity to buy one of those food marts from Shell when they unloaded their portfolio. And either way you slice it, these are generational businesses that their kids have maybe worked in the business, but typically most of them have gone out, gone to school, seen the world, they've experienced what good is. And the generation above them, and if we could just call ourselves out, I know my parents are definitely baby boomers, right? And what did they do? They came and worked, right?

Andrew Swedenborg: So this group came and worked. And now these next generations are seeing the fruits of the labor or the opportunity that was created by their generation behind them, the entrepreneur, and now we're taking it to the next level. And I could go on and on and on about how many of these businesses are family businesses that have now gone from one station to two stations to 20 to 30 to 40 to 50. I mean, I was just at a golf tournament out on the West Coast last week and started with one station and now I think they're pending an acquisition. They're going to be at 96. That's not a small business.

Greg: That's not a small business. Not anymore. I know, that's its own consolidation,

Andrew Swedenborg: Right? Yeah. And the family's very involved, but it's gone exponential and we've seen these stories time and time again. And through my work or our work, we're there to support that growth.

Greg: So what's Advancement Branding Sweet Spot customer?

Andrew Swedenborg: Advancement Branding, we're a design firm that builds, right? And you're going to hear more and more of that from us because we believe design is so important. It all starts with that. So we start with a typical customer typically with a design need, a desire to do better. Now, I'm not saying we have customers that have designed from others too, and that's okay. But we start with that conversation, be it developing a new brand, a brand being defined as name, logo, sub-brands, food brand, actual identity, because you have that component. And then the other thing is too, to take branding further, in the industry we refer to as branded or unbranded. So branded refers to the fuel, Shell, Arco, whatever, that's branded fuel. Unbranded is Buc-ee's. Buc-ee's does not buy their fuel from. They might ultimately buy it from Shell, but they're buying it at a different price point because they're not paying the retail markup for that.

Andrew Swedenborg: And there's terminology, I don't need to go into it. So that's one thing. I'm taking this question a little bit far, but then you have, that's the forecourt, that's the pumps. And then you have the back court, which is the retail. And that could be a Food Mart, which I would argue is not a brand, it's a name. Or it can be any of these other ones we've talked about, Envo, Hutch's, Breaktime.

Greg: Circle K.

Andrew Swedenborg: Circle K.

Greg: Sitting on a BP.

Andrew Swedenborg: Sitting on a -

Greg: BP pad.

Andrew Swedenborg: So it's branded retail, branded gas. And if it's the other way around, it can be, we'll go back to Buc-ee's. It could be Buckeyes, but Buc-ee's is on the canopy and Buc-ee's is on the store. So we start that, to get your question, we start by understanding those needs and then go start diving into developing an engagement based on that.

Greg: Yeah. So you talked about branding, let's talk about merchandising. You've talked a lot about having to make sure stuff sells in the store and we just made the joke about the wine, but how often do you get into the actual products and product placement in the store as opposed to just driving the look and feel of the brand?

Andrew Swedenborg: Historically, the retail design industry is not merchandisers. So if we go back to the advisory part of what we do, we advise. So we get involved in discussions, best practices, experience of merchandising and things to do, things to do. And it shows itself in both design and placement and flow of the perimeter. What's your fountain program and what adjacencies are we doing? How can we create impulse opportunities and things like that? Now, what is merchandised in there is a little bit downstream, but I will say historically, we'll call it the center of store of a convenience store and a travel closet has been dictated by their distributors. The distributor offers them free planogramming. So that's why you go into a convenience. This is why you don't go into convenience stores anymore, Greg. We haven't convinced you yet, but many of them -

Greg: I can be a convert.

Andrew Swedenborg: Many of them have the same merchandise mix. And that's -

Greg: Down to the same candy bars.

Andrew Swedenborg: Same candy bars, same number of facings of canned meat spam, down to jumper cables, down to air fresheners. And from the perspective of the best operators, and we've had a hand in being that sounding board experiential member, we see retailers across the United States. And I mean, I've toured with Australians, I've done all kinds of stuff. I've done tons of work in Canada, some overseas projects. These operators don't tend to see as much as we see. They see what's in their trade area. So we impart our knowledge and the best, and I'll go down swinging on this one, the very best operators do not accept free planogramming from their distributor. The free planogramming is the hook so they can sell you their inventory, so they can put their inventory on your shelves. Tell me this, why do you need three facings of canned meat in most parts of the United States at a convenience store and every convenience store?

Greg: I don't know. I don't go in, speed.

Andrew Swedenborg: Well, let me tell you, they don't sell very much of it, so they're giving it to the convenience store to move that inventory onto their shelf.

Greg: Okay. So that's a trend, right? Less than three canned meats forward

Andrew Swedenborg: Facing. I pick on the canned meat. I'm sorry.

Greg: Okay. Outside of canned meat, what are the biggest trends that you see shaping convenience moving forward?

Andrew Swedenborg: Well, again, we've talked on food, being a destination food worthy. I think the QSR industry is taking notice of some convenience -

Greg: I think they're hurting.

Andrew Swedenborg: Yeah. Well, exactly. They've got a more concentrated labor. They can't day part as well. They don't have fuel. They don't offer their restrooms. I'm talking QSR. They don't offer their restrooms as a traffic driver, that kind of thing. And then they're more singular in their product offering. So I think that is obviously a big trend. I think the size of convenience stores is trending larger because of the propensity of people better offerings. And so they are not just having the traditional come in Cokes and smokes and all that kind of stuff. So I think that is a big trend we're going to see. We're going to see obviously the need to have people, we talk about EV, obviously that is an addition to what we've had. So you're having bigger spaces, more parking, that kind of thing. And I think at the end of the day, as the narrative changes, you're going to have more and more C-stores capturing more and more people multiple times a day.

Andrew Swedenborg: So I think that's the thing that we have to plan for as we design sites and stuff like that. So you're getting people two, three, four times a day.

Greg: Okay. So that gets me to curbside pickup, perhaps enough food program to do delivery, either third party or domesticated. We haven't talked about drive-through yet. Talk to me about why we don't see more drive-throughs and convenience and should we?

Andrew Swedenborg: I would contend the drive-through is a third register of a convenience store. That being said, if it's not designed correctly and operated correctly, it becomes a liability. But as we continue to see C-store traffic trend up, and you can go to any source you want, but the amount of visits per day in a general statement have continued to improve as convenience stores have been continued to evolve and improve, a drive-through is a critical component to either address a customer that otherwise wouldn't stop because they're not going to get out of the car. Think of a soccer mom with three kids and they want the delicious chicken tenders at Parker's kitchen, but she's not getting out of the car in Southeast Georgia at two o'clock in the afternoon with all those kids and having to park and walk in and bring them all. And all she wants is a Diet Coke.

Andrew Swedenborg: So if you don't offer that, where is she going? She's going to Chick-fil-A or Raising Cane's to get those chicken tenders.

Greg: Yeah, she's clearly going through the window. And obviously now with apps, there's two types of window kind of exercises. One order at the remote, other one, order it at the curb. And so those opportunities, I guess they sit at a juncture to give convenience maybe a larger basket. So how do we get convenience to a larger basket?

Andrew Swedenborg: Well, that's one way, right? That's one way. And there's a couple things. A larger basket is giving you more opportunities to service more customers. So that's the drive-through. And again, we didn't really get into the approach to design appropriate drive-through, but assuming it's done correctly, I think it's getting the day parting down. So day parting is, and QT with a Q does this better than anybody. They attract their morning customer, landscapers, delivery drivers, all these people getting ready to start their day. They get them. And then they get them to come back at noon to get Gatorades. And one of the things that QT did is they installed microwaves in their stores, multiple. So what does that tell you? That tells you that they're allowing customers to come in and buy 10 Gatorades. Go ahead and heat up your leftovers that you brought from home.

Andrew Swedenborg: And so that brings that customer to them. And then they get not necessarily QT on this one, but we also have what's called home meal replacement. So you're having at the dinner hour, you're not having your traditional food service offerings, but you're also commissarying takeaway stuff where you can heat up at home. I don't know, macaroni and cheese, whatever.

Greg: That I haven't seen, but I have seen it 4:30 in the morning at QT, a whole lot of people there starting their day. 100%. Without a doubt, I've seen that.

Andrew Swedenborg: And so another thing on that, to your question of how do you increase basket size, give them the opportunity to come on site. So at a QT, they have large parking spaces, they have a dedicated parking space, we'll call it, for trade trucks, trade cars, people that are hauling a trailer or - Yeah,

Greg: They do.

Andrew Swedenborg: They absolutely do. So that increases your basket size because you're giving them an opportunity to come on in. If you try to stick them on a six parking space 7-Eleven, they're not. I mean, where's the guy going to put his truck?

Greg: Okay. Last

Andrew Swedenborg: Question. Okay.

Greg: Five years from now, something's going to be different. Could be electrics really starting to take hold. Could be, I don't know, maybe we're going to bring back auto service back into the convenience store. I think that's probably likely not to happen. I think that's probably not going to happen. It's probably a little longer from the truth, but something's got your attention. What's got your attention?

Andrew Swedenborg: Well, I'm pretty convinced that this is no longer your mom and pa convenience store experience and we're never going back to that. We're never going back to the coke and smoke, the traditional dirty bathroom. It's table stakes now, all tides rise. So I think you're going to see the convenience space have the most growth versus QSR versus grocery. I think they're going to be taking market share from both of those groups. And believe me, they know this. The trade associations for both are very, very aware of this. And we're going to see the generational mindset change that is one that you no longer just pull up, park your car, walk in, go to your thing. You're going to have all kinds of opportunities to be serviced and the ability to be catered to. And this could happen in grocery and QSR too, but this next generation or whatever generation we are on now, they're about immediate gratification, immediate everything and everything can be done like this.

Andrew Swedenborg: I look at my son, he's 17. I can't even tell you. I mean, he doesn't know what a calculator is. I mean, he doesn't know. I mean, we have all these stories, but he's like, "Huh? Why would I do that?" Yeah.

Greg: Amen, you've convinced me, Andrew. You have convinced me that on the way home tonight, I am going to stop and walk in a convenience store.

Andrew Swedenborg: You should. Absolutely. Absolutely. Let me know how it goes. I mean, depending on which one you pick, we still have some outliers that haven't got the message.

Greg: Okay. You're saying I have to make good choices. Yeah, make good choices. Just like what was in school.

Andrew Swedenborg: Well, let me tell you this. I say you do two, right? Go ahead and stop at a one that we believe is a good operator that's got the message Wawa. Let's just pick a Wawa, right? Pick a new Wawa, see how it goes, and then purposely pull over at the next gas station you see and with the same lens and see what your experience was. And I think you're going to be convinced that the tide is moving this way, right?

Greg: I tell you what, Andrew. Sweed, my friend, it's great to have you in conversation today. You are one of the people that are built to suit, and I certainly enjoyed listening to all you had to offer all the guests out here. And you guys can always catch the Built to Suit podcast where you ingest all your podcasts or on builttosuit.com. See the video, check out this handsome man, and we hope to see you down the road on our next one.