Dive Brief:

• Arko, the parent company for c-store giant GPM Investments, called its foodservice operations, loyalty program and center-store categories the “key pillars” for its successful third quarter, during which its merchandise margins reached an all-time high, president and CEO Arie Kotler said during the company’s earnings call on Nov. 8.
• On the foodservice front, pizza has been a strong focus for Arko. The company has opened 13 Sbarro locations so far this year and revealed plans to open five more by the quarter’s end, Kotler said. 
• Arko is redesigning the mobile app for its Fas Rewards loyalty program — which currently has more than a million members — and is currently testing the update before “running it chainwide,” Kotler said.

Dive Insight:

Arko’s Fas Rewards program lets members earn points for every purchase they make and redeem those points for merchandise or fuel savings once they’ve hit 250 points.

In updating the program, Arko is looking to build its “personal relationships” with customers by creating a more personalized platform, Kotler said during the call. 

He did not mention specifics on how or where Arko is testing its updated loyalty program, or when the program will officially launch.

“[The] goal is to drive frequency and total spend [with] relevant in-store and in-app personalized deals,” he said.

As it stands, Arko’s loyalty program has performed well when tied to foodservice visits. During the quarter, the number of enrolled members who bought their first recorded coffee increased 55.6% compared to the same period last year, according to Arko’s earnings statement.

“When a customer enrolls [in the loyalty program], we have an opportunity to increase visit frequency and total spend,” Kotler said in the earnings call.

The center-store categories that performed well during the quarter included salty snacks and candy, as well as beer and wine, Kotler said. 

Arko has opened a total of 13 Sbarro locations this year and has openly discussed its focus on pizza. The company currently offers pizza by the slice at 199 locations and is “working on many opportunities to introduce soon,” Kotler said.

But Arko’s investment in foodservice goes beyond pizza. The company also offers roller-grill hot dogs in nearly 400 locations, as well as fried chicken in over 100 stores. 

“I believe our stores can become more of a foodservice destination,” Kotler said in the call.