WINNING Information to Help You Compete and Succeed in the Convenience & Fuel Retailing Industry

1. WINNING Information to Help You Compete and Succeed in the Convenience & Fuel Retailing Industry August 4, 2011

2. Today… • About NACS • About Our Industry • By The Numbers • About PCI & Date Security • Categories & Best Practices • 2010 ADA • Differentiation

4. I will not to use profanity when the subject of swipe fees and banks come up I will not to use profanity when the subject of swipe fees and banks come up I will not to use profanity when the subject of swipe fees and banks come up I will not to use profanity when the subject of swipe fees and banks come up I will not to use profanity when the subject of swipe fees and banks come up I will not to use profanity when the subject of swipe fees and banks come up I will not to use profanity when the subject of swipe fees and banks come up I will not to use profanity when the subject of swipe fees and banks come up I will not to use profanity when the subject of swipe fees and banks come up I will not to use profanity when the subject of swipe fees and banks come up I will not to use profanity when the subject of swipe fees and banks come up

5. Speaking of banks…

6. Interchange Rates Source: Merchant Payments Coalition

7. WE DID find one country that charged higher interchange rates than the united states…

8. HOW I FEEL About THE banks and CREDIT CARD COMPANIES…

15. ABOUT NACS

16. Born in 1961

25. NACS’ three pronged focus • Connections • The NACS Show • NACStech Show • SOI Summit • HR Forum • NACS Leadership Forum • NACS Global Forum & Study Tours • NACS Social Media • Knowledge • State of the Industry (SOI) Data through CSX • Support of Technology standards (PCATS) • Industry research • Educational products • NACS Magazine & NACS Daily • NACS Help Desk • Advocacy • Government Relations • Media Relations

26. About our industry

27. About our industry • Our 146,300 stores… • Equal more than Warehouse Clubs (Costco) + Supercenters (Walmart) + Dollar stores (Dollar General) + Mass Merchandise stores (Target) + Supermarkets (Kroger) + Drug stores (Walgreen’s) combined Over 90,000 of stores are run by single store operators • 2010 sales equaled $576 Billion USD • We process about 166 million transactions per day • Equal to the entire mobile population of the United States shopping with us daily • 98% of Americans shop at c-stores once/month • We sell 82% of the motor fuel sold in the U.S.

28. About our industry • We employee about 1,500,000 million workers on the retail side alone • Some of our members made Fortune Magazine’s 100 Best Companies to Work For in the USA in 2010 • We have stores in every congressional district • Our stores are physically closer to the homes of America than any other channel of trade • We are the “neighborhood” store • We are the mosaic of America • Every race, creed, gender, income, age

29. About PCI & Data security

30. The skimmer threat is real Skimmers are our biggest threat

31. How are unattended POS PEDs (like AFDs) being compromised? • Criminals instead obtain access to install the capture device on-site by: • Obtaining a generic “brass key” for dispenser model being targeted • Many dispensers do not have unique key locks installed • Critical to train site employees to question anyone unexpectedly attempting to service” or “upgrade” one of their dispensers • Store personnel need to inspect pumps at least once per day • Consider tamper-proof security seals on all pumps

32. Additional Resources • NACS Compliance Resource Center • http://www.nacsonline.com/NACS/Resources/PCICompliance/Pages/default.aspx • http://www.nacsonline.com/NACS/News/NACSTV/Pages/WeCare.aspx?tgrp=2&src=home112

33. By the numbers

34. Industry Sales Source: NACS State of the Industry Survey of 2010 Data & CSX, LLC.

35. In-Store Sales Contribution Average Monthly Sales = $127,533 4.4% Source: NACS State of the Industry Survey of 2010 Data & CSX, LLC.

36. In-Store GP Dollar ContributionAverage Monthly Margin = $40,744 4.4% Source: NACS State of the Industry Survey of 2010 Data & CSX, LLC.

37. Categories & best practices

38. Cigarettes GrowthJan 2008 = 100 Source: NACS State of the Industry Survey of 2010 Data & CSX, LLC.

39. Cigarettes Source: NACS State of the Industry Survey of 2010 Data & CSX, LLC.

40. Cigarettes Gross Profit2010 vs. 2009 Source: NACS State of the Industry Survey of 2010 Data & CSX, LLC.

41. OTP GrowthJan 2008 = 100 Source: NACS State of the Industry Survey of 2010 Data & CSX, LLC.

42. OTP Syndicated SalesAverage Monthly = $3,634 per Store Source: Nielsen Syndicated – Convenience Tracking – Total US

43. OTP Syndicated Sales2010 vs. 2009 Source: Nielsen Syndicated – Convenience Tracking – Total US

44. OTP Gross Profit2010 vs. 2009 Source: NACS State of the Industry Survey of 2010 Data & CSX, LLC.

45. What are best practices? • Greater dedication to the OTP category | profit center • Merchandising & Marketing • Store Operations • Better assortment planning • Take advantage of item assortment tools either within your company or those provided by your wholesaler or manufacturer • Perform assortment and space analysis to gain the highest return from available space • Quantify impact of different assortment scenarios • Greater visibility of product • Get it off the bottom or sides of tobacco fixtures and give it a good home • Engage suppliers on fixturing that works to support visibility, differing store configurations, and sales & profits

46. What are best practices? • Operations and Marketing works best together to ensure proper store level execution • For small operators who wear both hats, need to make sure you can deliver in the store what you are advertising to your customers • Train store staffs • Make sure product is always stocked and faced; re-merchandising is a perfect activity to perform between waiting on customers • Rotate product: consumers always look at the freshness date

47. What are best practices?

48. What are best practices?

49. Foodservice Sales GrowthJan 2008 = 100 Source: NACS State of the Industry Survey of 2010 Data & CSX, LLC.

50. Foodservice Gross Profit GrowthJan 2008 = 100 Cold Dispensed Frozen Dispensed Total Foodservice Prepared Food Hot Dispensed Commissary/Package Sandwich Source: NACS State of the Industry Survey of 2010 Data & CSX, LLC.