Classic turnaround

Five years ago, Dairy Mart CEO Robert Stein inherited a 1,100-store convenience store chain that focused on quantity of stores over quality.

The company had a difficult time reaching profitability, let alone becoming an industry leader, and Stein wanted to rethink the look and feel of the entire Dairy Mart concept.

Today, the chain is a little more than half the size it was, with 600 stores in seven states. Many of the small neighborhood stores that made up the Dairy Mart chain have been phased out in favor of new, larger facilities that offer gasoline, fast food and a wider selection of merchandise. But most important, under Stein’s guidance the company was able to once again reach profitability.

“We’ve been a little bit like Rodney Dangerfield,” he explains. “We got no respect, and what we’ve done is dusted up and jumped off the ground from where we were three or four years ago. Because we really didn’t have a great name in the industry in terms of what we offered and what we were doing.”

So Stein took the hulking chain and started whittling it down, selling off unneeded assets in an attempt to generate enough money to implement his vision. It then became a matter of finding prime pieces of real estate where Dairy Mart could enter the high-volume convenience store market that for so long had been dominated by petroleum giants like BP and Shell.

Those changes were accompanied by a total marketing makeover in which the chain’s long-time Dairy Mart logo was replaced and the chain struck exclusive partnerships that allowed it to offer brand name products including Millstone Coffee and Chevron gasoline.

We’ve worked hard for three years,” he says. “And the payoff is coming now, where people can really identify with who Dairy Mart is, what we’re trying to do, and, in terms of the scorecard, the customer count has been up consistently over the past three years. We’ve had double-digit sales increases on a per store basis. That’s the scorecard that tells us that somebody is paying attention.”

But it is not just the high-dollars changes that have made a difference for Dairy Mart. Stein says management also decided to take a look at what was going on inside each store. It evaluated how customers were treated and whether the stores carried the right products. This self-evaluation resulted in a partnership with Mr. Hero.

All of the changes at Dairy Mart garnered the attention of the industry, as one of the leading trade magazines recognized the Hudson-based company as the convenience store chain of the year for 1999. It is a victory Stein attributes as much to his people as to his product.

“We’re in the business of serving 3.6 million people a week,” explains Stein. “The way you have to do that is every day of the week, you have to do the ABCs, which is having a clean store, friendly people, being in stock, and I think we’ve gotten better at that over the years.” How to reach: Dairy Mart, (330) 342-6700

Jim Vickers ([email protected]) is an associate editor at SBN Cleveland.