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NYACS Fall Conference Hank Armour, NACS President/CEO. Meeting Agenda. Industry Performance Trends Advocacy Issues Facing the Industry The Breadth & Depth of Our Industry Open Dialogue What’s on your minds? NACS Overview, Governance & Focus. Industry Performance Update.

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NYACS Fall Conference

Hank Armour, NACS President/CEO


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Meeting Agenda

  • Industry Performance Trends

  • Advocacy Issues Facing the Industry

  • The Breadth & Depth of Our Industry

  • Open Dialogue

    • What’s on your minds?

  • NACS Overview, Governance & Focus



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Total Industry Overview

Source: Nielsen & 2007 NACS State of the Industry Survey powered by CSX


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Industry Sales

Recession

Recession

Recession

Source: NACS State of the Industry survey for 2007 powered by CSX


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Industry Pretax Profits

Source: NACS State of the Industry survey for 2007 powered by CSX

Recession

Recession

Recession


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Top Direct Store Operating Expenses As Percentage of Gross Profit Dollars

Source: NACS State of the Industry database powered by CSX


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Credit Card Costs to the Industry

Source: NACS State of the Industry survey for 2007 powered by CSX



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Industry Credit Fees vs. Pretax Profit

Source: NACS State of the Industry survey for 2007 powered by CSX


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Core Category Performance in 2007

Source: 2007 NACS State of the Industry survey powered by CSX


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Sales Productivity – by Quartile

Source: NACS State of the Industry survey for 2007 powered by CSX


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People Productivity – by Quartile

Source: NACS State of the Industry survey for 2007 powered by CSX


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Sales

Jan/June 2008

Based on 77 firms – 3,655 stores

Source: CSX


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Direct Store Operating Expenses

Jan/June 2008

Source: CSX


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Margins

Jan/June 2008

Source: CSX


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EIA Fuel Supply (Consumption)

Pivot point for consumption

$4/gallon and the brakes went on!

Source: US Department of Energy, Energy Information Agency


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Change in Annual Sales

Convenience

Source: Department of Commerce


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Industry Trends Summary

  • Harvesting the cigarette category

  • Refreshment destination is the new destination

  • Food service important but “localized”

  • One “size” ceasing to fit “all”

    • Targeting offers to varying demographic groups

  • Convenience convergence

    • Channel obliteration & Global best practices

    • Will Tesco reset the table in consumers’ minds?

  • Interchange fees are the #1 economic issue

  • Increasing focus on supply chain inefficiencies

  • Emerging liquidity crisis

  • Very well positioned long term for the ubiquitous demand for convenience


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NACS 2008 Advocacy Issues

  • Credit card interchange fees

  • FDA tobacco

  • Hot Gas

  • LUST funding

  • Ethanol mandates/infrastructure incentives

  • Credit card expiration

  • Card check

  • Death Tax repeal

  • Health care insurance


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Credit Card Interchange Fees

  • Progress in Years 1 & 2

    • Antitrust litigation continues

    • NACS congressional testimony

      • Transparency (make the operating rules public)

      • Why are U.S. rates among the highest in the world?

    • VISA & MC announced plans to fully publish their secret operating rules

    • MC puts a cap on transaction amount subject to interchange fees

    • VISA announces a change in RC96 chargebacks

    • MC & Visa do IPOs

    • VISA announced a “reduction” in fees for fuel transactions (June 27th)

  • Legislation introduced in early March - HR 5546 & S 3086

  • 3 to 5 year effort

  • We need your help!

    • www.nacsonline.com/askcongresscreditcardfees

    • National pump topper plan over the August congressional recess

    • Support the effort by making a contribution to the NACS Interchange Action Fund


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NACS 2008 Advocacy Issues(continued)

  • Credit card interchange fees

  • FDA tobacco

  • Hot Gas

  • LUST funding

  • Ethanol mandates/infrastructure incentives

  • Credit card expiration

  • Death Tax repeal

  • Health care insurance


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The U.S. C-Store Industry

  • 146,294 stores

    = 50,000 more than:

    Warehouse clubs + Supercenters + Dollar stores

    + Mass merchandise stores + Supermarkets

    + Drug stores

  • $577 billion sales (4.25% of GDP)

  • 159.5 million transactions per day

    • Every 40 hours the industry serves the equivalent of the entire mobile population of America (6 yrs to 85 yrs old)

  • 98% of Americans shop at c-stores once/month

  • 82% of the motor fuel sold in the U.S.


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The U.S. C-Store Industry

  • 1.7 million employees

  • Some of the Best Places to Work in the USA (2008 Fortune Magazine)

    • #1 Best Big Company (Valero)

    • #28 (QuikTrip)

  • Stores in every congressional district

  • Physically closer to the homes of America than any other channel of trade…and closer to our communities

  • We are the mosaic of America!

    • Every race, creed, gender, income, age


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Open Dialogue

What’s on your minds?


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NACS Overview

  • Founded in 1961

  • 2,400 retail member companies

    • Operating 70,000 stores in the USA

    • Operating 300,000 stores globally

    • Members in 44 countries

    • 49 of the 50 largest companies in the industry

    • 71% operate 10 or fewer stores

  • 2,000 supplier member companies

  • Governed by a retail board of directors

  • 54 staff members


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Retail Board of Directors

  • 27 U.S. directors, 3 international directors

  • Bylaw requirements

    • 1/3rd from companies with fewer than 25 stores, 1/3rd from companies with more than 150 stores

    • Minimum of 3 from each of the 6 domestic regions

    • No more than 4 from any one state

    • 2 year terms, maximum 3 terms


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Board of Directors

Executive Committee

Richard Oneslager; Balmar Petroleum

Scott Hartman; CHR/Rutter’s Farm Stores

Jay Ricker; Ricker Oil

Sam Turner; Com-Pac Food Stores

Bill Douglass; Douglass Distributing

Sonja Hubbard; E-Z Mart Stores

Jeff Miller; Miller Oil

Alvin New; Susser Holdings;

Greg Parker; Parker Companies

Tom Robinson; Robinson Oil

Government Relations

Tom Robinson; Robinson Oil

Sonja Hubbard; E-Z Mart Stores

Jinger Duryea; CN Brown

Jim Garrett; Volta Oil

Gil Moore; New West Stations

Jay Ricker; Ricker Oil

Matt Thornton; Thornton’s

Alvin New; Susser Holdings

Sam Turner; Com-Pac Food Stores

Research & Technology

Greg Parker; Parker Companies

Mike Call; Maverik

Bill Douglass; Douglass Distributing

Chip Lavigne; Lavigne Oil

Pat Lewis; Oasis Stop ‘N Go

Gil Moyle, Jr.; Moyle Petroleum

David Sutton; Tiger Fuel

Member Services

Jeff Miller; Miller Oil

Dave Carpenter; JD Carpenter

Johnny Milazzo; Lard Oil

Stewart Spinks; The Spinx Co.

Nichole Torsey; Mountain Counties

Lynn Wallis; Wallis Companies

Jerry Westgate; WESCo

Jack Kofdarali; J&R

Masa Asakura; 7-Eleven

International

Eduardo Padilla; OXXO

Wayne Klahs; Chevron

Warren Wilmot; 7-Eleven Australia


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Directors from the Northeast

  • Jinger Duryea (C.N. Brown Company/The Big Apple Food Stores)

    • Maine, 90 stores

    • Legislative & NACSPAC Committees

  • Jim Garrett (Volta Oil Company, Inc.)

    • Massachusetts, 10 stores

    • Legislative Committee

  • Scott Hartman (CHR Corp./dba Rutter’s Farm Stores)

    • Pennsylvania, 50 stores

    • Technology Council Chair; Convention and Events, Audit, Nominating & Executive Committees; Past Chairman of the Board

  • Jeff Miller (Miller Oil Co., Inc./Miller Mart)

    • Virginia, 37 stores

    • Vice Chair, Member Services Committee; Convention and Events, NACSPAC & Executive Committees

  • David Sutton (Tiger Fuel Co./dba The Market)

    • Virginia, 13 stores

    • Technology Council


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Mission

Our mission is to provide the

  • Knowledge

  • Connections

  • Advocacy

    necessary to represent

  • the convenience & petroleum retailing industry

    and to assist our member in

  • maximizing their effectiveness and profitability


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NACS’ Three Pronged Focus

  • Knowledge

    • State of the Industry (SOI & GSOI) Data/CSX

    • Business process improvements/Technology standards (PCATS)

    • Industry research

    • Educational products & seminars

  • Connections

    • The NACS Show

    • NACStech Show

    • HR Forum

    • NACS/ECRM Food Service Business Conference

    • NACS Global Forum & Study Tours

  • Advocacy

    • Government Relations

    • Media Relations


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NACS Contact Information

Hank Armour

President & Chief Executive Officer

+1.703.518.4282

[email protected]

www.nacsonline.com


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