Experts: QuikTrip pay is above average, and so are stores

News that QuikTrip Corp. plans to build a $21 million “kitchen” in Bellefontaine Neighbors, Mo., is yet another sign that the privately owned company is aggressively pursuing a growth agenda – and an emphasis on fresh foods.

The facility, which will supply QuikTrip franchises, is to be called the QuikTrip Kitchen, and will be built on a 12-acre site near a QuikTrip franchise, one of the criteria the company had for the facility. According to a news report, it will produce fresh doughnuts for the stores.

Sales at QuikTrip Corp., a privately owned chain based in Tulsa, Okla., grew 20 percent last year and more than 10 times since 1991, according to a profile of the company that appeared in the Feb. 15 edition of The Wichita Eagle. QuikTrip today is a $7.2 billion corporation with 476 stores in eight major markets, according to The Eagle.

The company is No. 1 in market share in the Wichita, Tulsa, Kansas City, Atlanta and St. Louis markets. It is also growing fast in the Dallas, Phoenix and Des Moines/Omaha markets.

QuikTrip was named one of the 100 best places to work by Fortune magazine for the past three years, and was cited as an example of how a company creates an "outstanding customer experience" in a 2005 article in the Harvard Business Review.

The company was founded by Tulsan Chester Cadieux in 1958 and is still largely family owned. His son, Chet Cadieux, is chief executive. The only other stockholders are employees.

The company keeps growing through low prices, modern stores and a really nice staff, David Bishop, a specialist in convenience stores at retail consulting firm Willard Bishop in Chicago, told The Eagle.

"They are kind of the Southwest Airlines of the convenience-store industry," he said.

The secret ingredient to success is the work force, said the company and outside experts.

The company hires selectively and pays above average.

Clerks start at $7 per hour - more than $1 an hour above average starting wage in the industry - and are eligible for a strong benefits package, including health insurance.

If clerks show talent and energy, they will be asked if they want to move up to assistant manager. Assistant managers earn an average salary of more than $38,000; managers earn an average of $61,000.

"You can attract quality people if you pay better and have better benefits," said Mike Thornbrugh, manager of governmental relations for QuikTrip, told The Eagle.

"But what really made the difference is that (Chester Cadieux) established early on that he wanted to expand the company and hire from within so everybody who went to QuikTrip and worked hard, worked smart and make the sacrifice, could move up. That still holds true today."

Two-thirds of the top 100 managers in the company started at an entry-level position with the company, according to QuikTrip.

As a private company, Thornbrugh said, QuikTrip can sustain smaller profit margins in part to pay its work force better, and in part to re-invest in the stores.

The stores are 4,200 square feet and all identical. Although the company remodels its stores periodically, its basic strategy has changed only a few times in nearly 50 years.

The chain started out as a small convenience-oriented grocery store.

But in a speech recorded in a book about the 40th anniversary of the company, Chester Cadieux said it became obvious to them by the 1970s that QuikTrip had to change. Gas stations were adding small stores,and fast food restaurants were adding drive-throughs. Selling only general merchandise was no longer an option, he said.

"Who do we have a better chance of becoming - Amoco or McDonald's?" he recalled asking.

He chose the gas station model, and QuikTrip ramped up its gasoline sale until it became the top gasoline seller in most of its markets. It buys its gasoline from the refiner and blends it itself - cutting out the wholesaler.

Now QuikTrip is again making a major shift, this time toward food and drink items, The Eagle reported.

It expanded its coffee and drink counter - all self-serve to reduce the demand on manpower - several years ago. Now, the company is converting the whole left side of its stores to stock fresh sandwiches, salads, fruit and baked goods. These are made by the company's own kitchen.

The renovations will be completed in the 35 Wichita-area stores by this summer.

The conversion will also change who comes into the store, say experts.

Making the stores less cluttered and more food-centered will make them more comfortable and appealing to women and teenagers.

Thornbrugh said QuikTrip expects to compete well with fast-food restaurants.

Not everyone is a fan of QuikTrip. Independent operators have said they are selling out because they can't make any money competing with QuikTrip on gas sales.

Thornbrugh said the company prices its gasoline aggressively, but not below cost.