Blue Stone Gives Report on Tribe's Retail Operations
By Joe Morey News Editor
As part of Blue Stone’s strategic planning for Lac Courte Oreilles, two team members specializing in Convenience Store operations met with managers of the tribe’s gas stations and grocery store in the last week of June. They also met with members of the tribal governing board, including the newly-elected members.
The purpose of the meetings was to conduct a complete analysis of our existing business operations to assess operational efficiency, meet with management and to provide data follow up.
“You have a lot of great things going on,” explained Jason Mancini of Blue Stone. “The businesses are the pulse of the community.”
Mancini said the quickest way for a tribal economy to grow is for every dollar to be spent three to four times within the community before leaving. He explained how when a tribal member gets his paycheck, if he spends a dollar at a local business, the business owner needs to spend it locally, and so on so that the dollar circulates at least 3.5 times.
Mancini noted that if the dollar is spent once and then leaves the local reservation community, it hurts the local economy.
Tweed Shuman stated how important it is for the tribal membership to support our local businesses.
In discussing the local retail operations, Mancini said there’s not a lot of communication.
“There’s no shared information between the entities and your three gas stations and grocery store should be tied together and networking together,” Mancini said. He went on to say the businesses would have more buying power working together.
Ron Fernandez of Blue Stone said the managers of the three C-Stores, grocery store and the Landing need to operate under one Retail Manager who reports directly to the tribal governing board. He said, in addition, all retail employees need to be cross-trained so that when one operation is short-staffed, they can call another for a worker.
“If they are all cross-trained, then you have a pool of workers,” noted Fernandez. He explained how one operation may be shorthanded while another is overstaffed.
“Another issue is that your stores are vendor-run,” stated Fernandez. “We need to turn that around so that your stores are LCO-run.”
Fernandez said the managers allow the vendors to stock the stores and deliver what they want. In this case, the vendors will overstock our stores with three months of supply of one product when it should have only been one week’s worth. The vendor doesn’t care, but now you have valuable space occupied by a product that’s not moving, he explained.
Fernandez said our operations are experiencing a lot of theft in three different forms. He said there are three types of theft, one is external (customer theft), internal (employee theft) and finally, vendor theft. This may be happening in our operations because our managers have allowed the vendors to deliver and stock what they want without anyone checking in what they deliver.
“How do you really know what they leave,” Ferandez stated to the tribal council. “The vendor can easily manipulate his invoice. He can count it in your delivery, take back some and sell it back to you again or the vendor can resell it down the road.”
Fernandez said you can “Trust but Verify” and right now, nothing is verified.
Regarding internal theft, Fernandez said no one really knows the inventory.
“This is scary,” Fernandez said. “You have Back Office, which is what we recommend using, but it’s not being executed. It’s a system that can be fed right into the accounting office but it’s not being used. It’s important to put policies and procedures into place.”
Fernandez explained to the tribal council how current technology is unbelievable with barcode and scanning, inventory and pricing, the program talks to the till and tells you when you need to order. Currently, Fernandez noted, a company called Regis comes to LCO and does an inventory count every three months but they have nothing to compare too from count to count.
“And with the heavy volume of cigarettes you sell, you should have a physical count every week for tobacco,” Fernandez said.
Mancini and Fernandez recommended not only for the tribe to hire a retail manager to oversee all five managers, but to hire an Inventory Manager who is solely responsible for doing inventory control over all five operations.
Mancini said all the businesses need a new structure to give them the opportunity to succeed. He added, all new employees need strong training. He also said workers in the retail outlets need more customer service training because they weren’t greeting people.
Regarding the LCO Convenience Center, Mancini said although the store was the cleanest operation, there were major concerns on store disarray and potential “red flags” in losses and ineffective store operational processes, which included the ineffectiveness to handle customer traffic, monitor shop operations and tobacco inventory.
Blue Stone made a few recommendations which included developing much-needed operational procedures, fuel pricing strategies and inventory control. They recommended recruiting an inventory manager immediately.
They also recommended updating product selection and pricing structures, and vendor relations and expectations, and to consider future expansion into wine and liquor based on Country Store effectiveness in product sales.
Regarding the C2 LCO Travel Plaza, Blue Stone recommended expanding the convenience store into a full tobacco shop and liquor store with expanded beer, wine and liquor sales.
They also suggested moving all overstock alcohol and tobacco products from C1 over to C2 and use as storage since there is such a high volume of sales and you want the inventory.
Blue Stone also recommended adding the tribal member gas discount to the C2 travel plaza. They also suggested a re-set of C1 in cleaning it up to have a better image and to remove all the barricades of product that conceal the workers in the cashier area.
Jamie Fullmer, Blue Stone Chairman and Founder, told the tribal governing board when people come into our reservation, their first impression of our people is by what they see in our convenience stores, grocery stores, restaurants, hotel lobby, etc.
“The people you have working there are your brand ambassadors,” Fullmer said. “How they dress, talk, look represents all of you."
Fullmer said you want to convey a message of, “We are a community of excellence. Everything we do, we do our best.”