Pantry leaps ahead with Kangaroo promos

Staff writerSeptember 15, 2011 

From patriots to college basketball rivals, Kangaroo Express customers are being targeted in a series of campaigns to attract and keep new business, and the promotions are paying off.

Kangaroo Express, a division of the Cary-based company The Pantry, is a part of a growing number of convenience stores using promotional campaigns as revenue drivers. The campaigns help bring in customers who ordinarily might go no farther than the pump, said John Fisher, senior vice president of marketing and merchandising for Kangaroo Express.

"We can't be a McDonald's; we don't want to be a Starbucks. But when you have limited time but you've got to get a drink or a snack or a meal, we want to be your first thought," Fisher said. "The promotions are easy, but getting people to come back again, that's where you get the success, and that's what's happened in Raleigh."

Increased competition for Triangle convenience store customers is helping fuel the efforts of Kangaroo Express. Pennsylvania-based Sheetz, which began opening local stores six years ago, has aggressively advertised its fresh food and offered coupons and giveaways to lure customers.

Fisher said sales, led by the Kangaroo Express coffee business, are up in all Triangle stores, thanks in large part to promotions that appeal to customers' personal interests. This boost comes after third-quarter earnings fell below analysts' estimates in August.

'Salute Our Troops'

Kangaroo Express' "Salute Our Troops" promotion, for example, allowed customers to make in-store donations from Memorial Day to Labor Day benefitting military support organizations such as the USO, the Wounded Warrior Project and the National Guard.

Company officials today will present the organizations with a check worth $2.5 million - more than double what they had hoped to raise - at an event featuring food, live music and other entertainment at Cary's Koka Booth Amphitheatre at Regency Park.

"We wanted to do a promotion that allowed all of our customers a chance to say 'thank you' to the troops," said Fisher, adding that more than half the brand's 1,650 stores are within 20 miles of a military base.

About 90 percent of the money raised came from donations taken at Kangaroo Express check-out counters.

"The interesting thing about this particular promotion is there is practically zero chance of losing money, and it can potentially build goodwill at the store at no cost to the store," said Sridhar Balasubramanian, associate dean for the MBA program at UNC-Chapel Hill's Kenan-Flagler Business School and a marketing professor. "It takes out all of the risk, and it can incorporate a 'warm glow' in the consumers."

Promotions like this also give customers a better feeling about coming into the store, making them more likely to return, said Napoleon Byars, an associate dean for undergraduate studies at UNC-CH's School of Journalism and Mass Communication who teaches advertising. These customers then become advocates for the brand, which can be more effective than the most extensive marketing campaign, he said.

"The way to get advocates is to exceed their expectations and to promote the store," Byars said. "You do that, and you're going to get a golden egg each time. If you get it going the other way, you're on your way to bankruptcy."

Using social media

Coinciding with the troops promotion, Kangaroo Express offered a $6.99 refillable "Roo Cup" during the summer that went viral, Fisher said. The chain also pitted local college basketball fans against each other earlier this year in the "Battle for Bean Street," which promoted its new brand of coffee.

From November to April, Kangaroo Express publicized the competition through Facebook, Twitter, YouTube and a website to drum up interest. In the end, the promotion sold more than 120,500 team-branded coffee cups, with UNC-CH winning $20,000 for the charity of its choice.

"What retailers want to do is find ways not just to get the sale but get the customer, and programs like this are a great way to do this," said Jeff Lenard, a spokesman for the National Association of Convenience Stores. "You can always be in a gas war or in a coffee price war, but if you're only fighting over price, you only have that customer until his or her next fill-up."

The Pantry, which operates stores in 13 states, also has remodeled 130 N.C. stores as a part of an initiative to freshen the food - and atmosphere - of its chains. Reimaging the brand, and knowing how to execute that plan, is just one of the core marketing concepts Fisher and outgoing CEO Terrance Marks learned during their years at Coca-Cola.

Marks, who led The Pantry's aggressive turnaround strategy in recent years, said in August he would become CEO of Hooters.

"Before we got here, we didn't have a positioning," Fisher said. "What a positioning does is it forces you to make a decision. Once you're doing what you want to do, go big."

tori.stilwell@newsobserver.com or 919-829-4649

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