Saturday, May 11, 2013

From Sheets to Sheetz

Fortune Magazine:
The son of a dairyman, Bob Sheetz opened his first convenience store in downtown Altoona in 1952, but the family skill at recognizing opportunity and understanding the subtleties of marketing began a generation earlier, when Bob's father, Gerald, went to a milk convention in Pittsburgh and saw two name tags. One was for Gerry Sheets, which was his name. The other was for a Gerry Sheetz. He took the other guy's. "I like the z," he told his wife, and he legally changed his name.
Altoona's original claim to fame is as the home of Horseshoe Curve, where the railroad nearly bends back on itself in a long and panoramic switchback. In the 1950s the city was a bustling place, with 15,000 employees of the Pennsylvania Railroad working around the clock to repair engines and freight cars. Pennsylvania's blue laws kept supermarkets closed on Sunday, but the restrictions did not apply to small retailers, creating a tidy loophole for the Sheetz enterprise. As the restrictions on Sunday commerce were loosened in the 1970s, Sheetz started selling gas as a way to make up for the lost business. Even today, Pennsylvania is a thicket of retailing restrictions. Cigarettes can't be discounted below a state minimum, and convenience stores can't sell beer. Sheetz has been fighting restaurants and beer distributors to get the law changed and even deployed a Rube Goldberg maneuver that allows it to sell beer at exactly one store. In the early days the ban kept the national chains away, meaning a little less competition and a little more room to experiment.
I also found this interesting:
I asked a lot of the Sheetzes about Altoona, and they all praise the area's work ethic as being central to their success. But there's more than that. Louie Sheetz, who heads marketing and is the youngest member of the first generation, told me the city also has a bit of a wiseass culture, which at first blush seems a little iffy but nonetheless has also become part of the Sheetz juju. That yin and yang, the no-BS, lunch-pail approach married to something edgier, something snappier, is a hard act to pull off, particularly at a place where sandwiches cost four bucks and gas is virtually a commodity. But it's there, and you can get a glimpse of the Sheetz juggling act in Pom Wonderful Presents: The Greatest Movie Ever Sold, Morgan Spurlock's cheeky look at marketing and product placement. The rest of the fast-food business turned Spurlock down, but Sheetz flew Spurlock out to Altoona. In the documentary, after Spurlock makes his pitch, Stan delivers a soliloquy that, if not quite Shakespeare, still gets at the essential truths of what's going on in the movie and by extension the marketplace: "Here's this jerk who's making this horrible marketing movie with the assumption that Americans are idiots. Morgan is an idiot. He thinks all Americans are idiots, and all the people who sponsored this film are idiots -- they're bigger idiots. What does that do to our brand?"
Then, after the rant, it was time for business, because what Spurlock was selling the company was opportunity before a larger audience. Sheetz paid $100,000 to be part of the movie, which premiered in 2011 at the enormous Jaffa Shrine Center in downtown Altoona.
Spurlock is well-know for Super Size Me.

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