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All Posts By

Mike Cummings

05.15 2023

The Evolution of C-Stores

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by Mike Cummings, Sr. Principal

May, 16 2023

The Covid pandemic had a significant impact on the industry.  The overall number of stores and revenue declined, and it also changed purchasing patterns.  The pandemic highlighted how gaps in the global supply chain added a sense of urgency to keep pace with high-demand products in non-traditional C-store categories. Many customers relied on the channel for daily essentials, including grocery items, as well as treats to boost spirits.

The C-Store Landscape covered the most prevalent functions/types of C-Stores including travel centers, fueling C-Stores, Grocery C-Stores, and Urban C-Stores. 

There are still many opportunities for new locations within all types of C-Stores. But what is currently happening in the marketplace and what is next? 

The most interesting current trend is the diversity of food choices.  From personal experience driving to jobsites, I would decide where to stop based on demonstrated ability to provide a good cup of coffee.  That is basic and can provide an alternative to the coffee shop. Not only are food choices the most interesting trend, but it can also have a large impact on revenue. Foodservice sales in convenience stores increased 20.5% in 2021 after falling 10% in 2020, according to the 2022 Convenience Store News Industry Report. Some of the increase was driven by changes in consumer behavior during the pandemic, but it is also driven by demographics. Data from Cargill show millennials are the top indexing convenience store customers. “Better-for-you” foodservice offerings are key to capturing the demographic, as are Mexican-inspired flavors, said Jessica McMillan, strategic account lead for convenience stores at Cargill. “When we look across the consumer base, millennials are actually the first generation to prefer Mexican flavors over Italian flavors,” she said. “If you look at Gen Z, Asian flavors are their top choice.”

By incorporating more diverse flavors like Mexican and Asian, along with healthier choices, can C-stores become an alternative to fast-casual restaurants and/or the market section of a grocery store? I believe they can.

Have you noticed that grocery stores have added market sections to their offerings or included branded C-stores on their sites?  That empirical evidence alone demonstrates the opportunity For C-stores. Some restaurants pivoted and sold basic grocery items during the pandemic.  The C-store can provide both groceries and meals on a 24/7 basis.  

I expect this duality of grocery and fresh meals represents the current evolution opportunity in the C-Store market.  Providing diversity of offerings in grocery, meals, snack, and beverage categories can increase revenue per visit as well as deliver new, regular customers. 

Full realization of the concept will require a focus on convenience including loyalty apps, self-checkout, drive-throughs, and express options.

That is what is happening today in the marketplace, but what about tomorrow?  Stay tuned.

This is part 2 of a 3 part series. To see previous parts, see our news tab, on our website!

Mike Cummings, Sr. Principal

03.21 2023

The C-Store Landscape

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by Mike Cummings, Sr. Principal

March, 21 2023

Convenience stores serve a variety of needs and continue to evolve.   Full disclosure – I am a fan of C- stores, both in my daily life and when I am on the road going to jobsites.  There are more than 150,000 C-stores in the US, and it is a half-trillion-dollar annual industry.  They may or may not sell fuel.  C-stores are evolving from the traditional “cokes and smokes” to becoming a destination and not just a place for gas and a cup of coffee.  C-stores come in all kinds of sizes from small walk-up non-fueling locations to the biggest in the world like Buc-ee’s. 

Most convenience stores fulfill a variety of needs so they can be difficult to categorize.  Among the primary needs that C-stores can fulfill:

Travel centers are generally large facilities with convenient auto and diesel fueling, large restrooms and lots of drinks and snacks.  Many have a restaurant incorporated.  Travel centers offer a welcome stop on road trips to stretch your legs and refuel. Other amenities that you might find at a travel center include:

  • dedicated truck and RV parking areas
  • Pet relief area (I had no idea so many truckers travel with a pet)
  • Expanded food choices.

Fueling convenience stores

The primary function of some C-stores is to sell fuel, with an assortment of snacks and beverages.  Many times, these may be the only fueling option in town or within miles. 

Grocery convenience stores

The primary function of some C-stores is to be the local grocery store; these may be the only grocery option within miles. These stores will also have an assortment of snacks and beverages, and other convenience items, and may also sell fuel.  Grocery is now the third most common category purchased at convenience stores, falling just below snacks and candy, according to data from NRS.

Urban convenience stores

These small, non-fuel locations are normally seen on an active, pedestrian street and cater to people living or working nearby.  I was quite surprised to encounter these types of C-stores while traveling internationally. One in Beijing on the ground floor of a high-rise office building features a steam table serving lunch to workers in the office building.

As I said, most convenience stores fulfill a variety of needs and fit within multiple categories.  The good news is that there are still many opportunities for new locations within all types of C-Stores. And for new types of stores.  Will the “lessons learned” during the Covid pandemic lead to evolution of C-stores or even new types of C-Stores? 

Stay tuned.

Mike Cummings, Sr. Principal

09.20 2021

Lessons Learned and the Way Forward in the Wake of the Pandemic

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September 2021 Michael Cummings, Sr. Principal

I was fortunate to participate in an International Cinema Technology Association panel discussion at CinemaCon.  ICTA President Frank Tees served as the moderator and ICTA Vice President (International) Jan Runge interviewed Thomas Van de Weerd, proprietor of the (Any)thing cinema with their first private cinema located in the Netherlands.  I was joined on the panel by creative, passionate, and driven exhibitors Tim League of Alamo Drafthouse, Bobbie Bagby of B&B Theatres, and (via video) Crispin Lilly of Medi-Cinema and former CEO of Everyman Cinema.

The exhibition perspective on lessons learned and the way forward was well represented, and I focused on the design perspective.  Four specific design lessons learned are touchless service, prioritizing cleanliness, importance of ventilation, and the increased role of technology.  Some aspects were going to occur eventually anyway, but the pandemic accelerated their implementation. 

Let us now turn to the fun design stuff

Touchless Lobby and Concessions

The transition to technologically enabled touchless service was occurring before the onset of Covid, but its adaptation was greatly accelerated.  The lobby and concessions envisioned below uses large graphics for visibility throughout the lobby, QR codes coupled with loyalty apps for ordering, and separated pickup conveniently around the corner.  The concession preparation area is enclosed with glass providing customer visibility into the kitchen while maintaining separation, cleanliness and avoiding direct contact between concessionaires and customers. 

What else have we learned from the pandemic? Without diving deeply into exhibition, the business partnership between studios and exhibitors has changed; by necessity during the “closure/lockdown” portion of the pandemic, and new rules on the relationship continue to evolve.  There is no doubt that this new relationship will result in a need for fewer auditoriums.  Movies will be in theatres for shorter periods and there will also likely be fewer exclusive theatrical release titles.  This should incentivize exhibitors to utilize auditoriums (and/or auditorium and lobby space) for other sources of revenue.     Among the diverse revenue-generating concepts are: 

E Sports & Gaming

This is not an arcade but a competitive eSports and/or gaming space.  It can be a competitive coliseum (like the first image) or a more socially oriented space.  Either approach works well with auditorium-sized spaces, as well as for other uses and content.  These fast-growing markets will surely bring new customers to your facilities.

VR/AR/MR

Virtual reality, augmented reality, and/or mixed reality are key components of entertainment.  These gaming focused applications of technology are also “spectator sports’ and should be coupled with a bar and extended food service.  VR/AR/MR have also shown to be an effective medium for storytelling under the direction of skilled filmmakers.  There are exciting developments underway. 

Private Cinema (Flexible use Auditoriums)

Private Cinema rental existed prior to the pandemic but provided a real lifeline to exhibition during it.  What if you designed small auditorium spaces for a variety of uses including traditional private cinema?  They are in essence a private entertainment space that can include first-run feature films, legacy films, subscription service entertainment, sports, music, esports, and other events, meeting space, karaoke, and virtual reality.  The key is designing them to provide multiple uses. 

Adult Lounge

Many cinemas already include bars and expanded food services. What about providing adjacent entertainment options to keep customers there longer. Options include duckpin and mini-bowling, darts, billiards, pickleball, interactive walls, ax throwing, ping pong, foosball, air hockey, yard-zee, chess, Jenga, shuffleboard, cornhole, bocce, and countless others.

Outdoor Space as Revenue Generating

Can the space outside your building also be used to generate revenue?  If you changed your theatre from traditional to recliner seating, you may have more parking spaces than you need. Perhaps part of that space can be converted to revenue generation.  Drive-in theatres were the most common use during the pandemic.  Many people remain more comfortable gathering in outdoor spaces than indoor.  These combine to create a unique opportunity to monetize the parking lot and create a new first impression of your facility for your customers. 

Exhibition will be forever changed by the Pandemic.   It has survived for more than a century because it is resilient and changes with the times.  I believe that we have entered a new period of reinvention, and innovation.  Spurred by entrepreneurial exhibitors like Thomas Van de Weerd, Tim League, Bobbie Bagby-Ford, Crispin Lilly, and others who will be leading the way into the future and the next big things for exhibition. 

Michael Cummings Sr. Principal

10.08 2020

Inflection Point for Cinema Exhibition

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October 2020

The Cinema Business and specifically exhibition have been a challenging business model since their beginning.  It enjoyed a golden age, and while forever changed by the advent of television, it has remained a significant, stable, and profitable business.  It faced an onslaught of challenges that had many predicting its demise including VCR, Cable, DVD/Blu-Ray, and streaming.  The key reason that exhibition survived these challenges is focused and consistent re-invention and innovation.

All businesses rely upon partners to provide them products and/or services.  Exhibition takes that to another level by relying upon movie content to draw customers to their facilities.  In other words, studios have provided the content and exhibition provided the venue and the experience.  The business has always been cyclical based on popularity of content, but with long-term stable revenue growth as illustrated below:

Cinemas, along with most places of public gathering, have been shuttered since March by Covid-19.   Cinemas have been permitted to open with limited capacity in many locations, but the results have been less than optimal because there is hesitation from customers and little fresh content to draw them back. 

The changes that have happened in 2020 to the exhibition business model are troubling to long-term viability.  The three most impactful changes, from my viewpoint, are: 

  • Reversal of the US – Paramount Consent Decree
  • Studios changing theatrical release patterns – is this a short-term response to pandemic or a longer-term change?
  • Increased variety and availability of content, and broader acceptance of it from a variety of sources

These changes lead many to predict (again) the end of the movie theatre and moviegoing.  That is one possible outcome, though doubtful.  Another is that the resilient and creative exhibition community will once again rise to the challenge.  I believe they will and would like to talk about what that might be. 

First, it is important to consider what we have learned and will continue to learn from this pandemic in the weeks, and months ahead, including:

  • Safer, touchless ways to transact business, including new customers now more comfortable using digital platforms
  • We can survive in isolation with digital interaction and support, but
  • We crave real social interaction

This combination of exhibition business model changes and pandemic lessons learned create an inflection point, or time of significant change, for cinema exhibition. 

The question is growth or decline?  Let us dig a little deeper into the impactful changes.

The reversal of the Paramount Consent Decree, even with the two-year sunset period on block booking and circuit dealing, could be disastrous for independent and smaller market cinemas. Therefore, many in Hollywood pushed back on the removal of the decrees, including the National Association of Theater Owners, the Directors Guild and the Writers Guild of America, arguing that removing such restrictions could hurt independent films, among other things.

Among the rationales for the reversal was that the decree does not apply to all studios, to streamers or international competitors https://deadline.com/2020/08/paramount-consent-decrees-justice-department-2-1203007221/ 

Some speculated that large tech companies could be in the market to purchase exhibition companies as an outlet for their own content.  However, Reed Hastings co-CEO of Netflix told The Hollywood Reporter during a September 10th interview “I can’t see us doing a chain or expanding in theatrical,” https://www.hollywoodreporter.com/news/reed-hastings-says-netflix-wont-buy-a-theater-chain-but-thinks-moviegoing-will-return .   There are dozens more content providers that could have different views or objectives. I expect there to be further consolidation resulting from this ruling and the pandemic shutdown.  Someone will see this as an opportunity, whether currently in cinema exhibition or not. 

The change in studio theatrical release, is to me the biggest and most impactful change in the exhibition business model.  The theatrical release business model has been the glue of studio-exhibition partnership.  Even a short-term adjustment, during the pandemic, is controversial.  How this issue resolves long-term is the biggest driver of the direction of the inflection point. 

I also believe that the increased variety and availability of content can be considered a significant part of a new business model.   Content creators are engaged in different vehicles beyond the major Hollywood studios.   Outstanding content is being created in the international/global marketplace.  There is an opportunity for content that does not fit into the two-hour, formulaic standard. 

These combine to create a real threat to the cinema exhibition business model.  Unless you redefine the business model.  What do I mean?

Be a communal place for social interaction.  Diversify the offerings.  Focus on developing other sources of content including events, independent and (dare I say it) streaming. 

Cinema Entertainment Centers, featured in Box Office Pro in August https://www.boxofficepro.com/the-next-big-thing-the-risks-and-rewards-of-cinema-entertainment-centers-one-of-the-fastest-growing-trends-in-exhibition-today/ is one proven model.  Several exhibitors have redefined their business model to include other entertainment components, and some entertainment center businesses have added cinema to their business model. 

Challenge everything about your business.  Strive to be the place for people to socialize, eat, drink, play and have fun.  Cinema is a shared social experience and should remain a focus.  The studio/tentpole movie model works, will remain, and requires and deserves large premium auditoriums.  Other forms of content might be better served with non-traditional spaces.  Consider boutique/social bowling.  Games and gaming are a growing business.  Consider eSports, virtual/alternative reality components, including other active participation activities such as zipline, climbing and use of outdoor spaces.  Concentrate on food and beverage, the mixture and quality of offerings to optimize revenue and profitability. 

Find the right, new combination – the next big thing.  Be the place for people to socialize, eat, drink, play and have fun in the communities you serve, and it will lead to a better, more robust business model, and long-term stable revenue growth.

Founded in 1981, TK Architects is a full-service architectural firm that offers all professional design services in-house to simplify and streamline coordination, including: Architecture, Interior Design, Graphic Design, Structural Engineering, Mechanical, Electrical, and Plumbing Engineering. The firm’s focus is entertainment architecture and engineering, including cinema, bowling, bars/lounges, food service, and entertainment centers worldwide. TK Architects provides the right services at the right time to meet client’s specific needs, including: New Buildings, Tenant Interiors, Renovations, Facility Upgrades, and Maintenance.

For more information about TK Architects please visit www.tkarch.com or contact Jack C. Muffoletto, at jcmuffoletto@tkarch.com

Mike Cummings

09.19 2018

“Destination Entertainment: Preserving the Social Experience in a Streaming World” in Film Journal

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September 2018

An article by Sr. Principal, Mike Cummings, was featured in the October issue of FilmJournal magazine, titled “Destination Entertainment: Preserving the social experience in a streaming world”.

In the article, Mike Cummings discussed the view of the cinema-going as a socially infused entertainment experience. He talked about the benefits of movie-going in this modern world of media streaming as a fun and pleasant way to get away, socialize, and enjoy the surrounding atmosphere. See how well-thought-out design and latest technology tie into the successful process.

For more details, please follow the link to FilmJournal web version of the article or view the article in print in October issue of Film Journal: http://www.filmjournal.com/features/destination-entertainment-preserving-social-experience-streaming-world

By Mike Cummings, TK Architects International September 17, 2018

Many times, when I meet someone or talk with friends and am describing my work—primarily designing movie theatres—people will ask me: Aren’t movie theatres going away? I inevitably start with talking about people dining out even though they have a kitchen in their home, and the fact that collective storytelling is part of our human experience dating back to cavemen gathering around a fire. Usually, this stream of conversation stops, but there is a whole lot more to the story…

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