-By David Diamond

Imagine that one department in your supermarket represents over 75 percent of your total sales, and that this one department has very low margins, and that this year the prices you've needed to pay for it have fluctuated, up and down, by almost 50 percent. Now you know what it's like to run a combination gas station/convenience store, and also why the coffee is cold and the staff is surly -- management has other things to worry about.

Think of it this way: How much time would you have to think about your center store assortment if meat were 50 percent of your sales, and the wholesale beef price routinely increased by more than 20 percent in a given week?

With the tremendous stress caused by wildly fluctuating prices, you have to exercise the discipline to stop worrying about what you can't control, and instead address the other elements of the shopping experience that you can control.

Over the past few months, operators of gas/convenience combo stores have seen their prices dramatically increase, then drop, then rise again, and then drop again. And while all of that was happening across a category that represents at least 60 percent, and often up to 90 percent, of a typical combo store's volume, these retailers have had to deal with the rest of the store, trying to move the business forward. This challenge, and the response of those in the channel that continue to be successful, is something we in the supermarket world can learn from.

Mostly, they understand that gas prices are out of their control, and that they need to do what they can to manage the emotions that surround wildly fluctuating prices, rather than attempting to manage the prices themselves. The smart retailers are making sure that their stores are the best they can possibly be, and leveraging the incremental interest in gas prices into business-building and revenue-generating programs and services.

Cooking with gas

A great example of this strategy is the Sheetz chain. Altoona, Pa.-based Sheetz runs about 250 combination gas, convenience, and quick-serve restaurant stores. The company has remained focused on the operational challenges of integrating the three kinds of stores it operatea under the same roof, and, by making the various functions of its various stores work together well, Sheetz has continually improved both its revenue and profitability despite the impacts of fluctuating gas prices.

Take Sheetz's order-taking process: The retailer makes all food to order, so everything is fresh. Since this could clash with the fast-service nature of its stores, Sheetz installed remote ordering capability at its pumps.

Another chain has turned gas price fluctuations from a problem into an opportunity -- Meijer, the regional supercenter chain in the upper Midwest, with gas stations in the forecourts of virtually all of its stores.

About 18 months ago, Grand Rapids, Mich.-based Meijer introduced a cell phone-based gas price alert program that lets its consumers sign up to receive text messages letting them know when gas prices are going either up or down in the next few hours. That way Meijer;s best customers can either fill up their tanks before the price goes up, or wait until the price goes down.

Other food retailers are already emphasizing free or discounted gas as part of ongoing in-store promotional efforts. Both Price Chopper and Giant Eagle have led the way in converting scan-down cash discounts into at-the-pump gas discounts.

Some other operators have developed sexy and sophisticated technology to deliver these discounts at the pump. One especially appealing application allows consumers to scan certificates at the pump that "roll back" the gas price as they watch.

The key is that the retailer focuses on things it can control. This focus manifests itself in two ways. First, you need to work on things entirely unrelated to the fluctuating prices. Nothing makes higher prices easier to swallow than a shorter line at the butcher counter, and checkers and baggers ready to serve.

Second, you need to look at those products affected by fluctuating prices, whether it's gasoline or any other product we sell, and see if programs can be built to help consumers better manage the impact.