The Don Zietlow family plans to continue growing its La Crosse-based Kwik Trip convenience store chain in a big way.

The company will continue to build about 20 stores a year. And with a new commissary to make food items, new ice plant and a new water plant already in place, it plans to build a new ice cream and yogurt plant and expand its bakery in the next few years. Eventually, Kwik Trip also intends to start making its own plastic bottles.

Don Zietlow, president and CEO of Kwik Trip Enterprises, and his son Steve Zietlow, director of petroleum operations, at the Kwik Trip testing store at company headquarters in La Crosse. PETER THOMSON photo

Kwik Trip already has 383 stores, all in Wisconsin, Minnesota and Iowa.

“I think you have to grow or you die,” said Zietlow, the company’s president and CEO. “I’ve taken a lot of risks,” he acknowledged in a rare interview in his office at

Kwik Trip’s support center in the La Crosse Industrial Park.

“The market is moving; the market always changes,” he said.

“I think the Wal-Marts of the world changed the retail business,” Zietlow said. “And they really put a lot of grocery stores out of business. And when that happened, it made a place for us to sell our milk, bread, bananas, oranges and apples, and fill in the gap.”

Founded in 1965, the Kwik Trip chain had been jointly owned by the Zietlow and John Hansen families since 1972. The Hansens sold their interest to the Zietlow family in 2000.

Don and LaVonne Zietlow have three children: Steve Zietlow, Scott Zietlow and Vicky Kunz, each of whom are on the company board. They also have 14 grandchildren.

Test Store:



“I thought I’d probably retire by now,” said Don Zietlow, 73. “I think the children think there’s probably still some rubber on the tires. So as long as they think I’m an asset and can make a contribution, I’ll be around.”

The next CEO will be chosen by the company board, and probably either will be a Zietlow family member or someone else within the company because of its unique culture, he said.

There’s no chance the company will go public with a stock offering, said Steve Zietlow, the company’s director of petroleum operations, who also participated in the Tribune interview with his father.

Commissary:



“It will always be family owned,” Steve Zietlow said of Kwik Trip, which has annual sales of about $3 billion.

“Being family owned, you have a certain amount of control of your own destiny. We’ll do what we feel is necessary for the business. My father is kind of a risk-taker and kind of aggressive” in growing the business, Steve Zietlow said. “That’s something you can do with a private company. With a public company, you might not have that leisure.”

Being privately owned, Steve Zietlow said, the company can keep programs in place in which it shares 40 percent of its pre-tax profits with employees (the company calls them “co-workers”) and allows full-time employees with at least five years of service to become equity owners of the company’s real estate property. Those programs are one reason why Kwik Trip’s employee turnover rate is by far the lowest in the industry, he said.

Keeping Kwik Trip privately owned is good for its co-workers, Steve Zietlow said.

Though Don Zietlow expects to continue building about 20 stores a year, he doesn’t expect to add locations in the La Crosse area, “just replacements and upgrades,” he said. For example, the company will replace its Cass Street location with a much larger store, plus a car wash, in 2009.

But the company has new-store opportunities elsewhere in the three-state area and might eventually expand to one more state.

“We could go into northern Illinois,” Steve Zietlow said. “The one constraint we have is because we ship every day to every store ... how far you can get a truck out?” The company has its own fleet of trucks.

Bakery:



Kwik Trip’s employees have played a major role in the company’s growth, Don Zietlow said.

“Our people are our greatest asset,” he said. “They have to take care of the customer. And we have to take care of our people.”

Kwik Trip serves about 4 million customers a week, Don Zietlow said. They will continue to come in “if we give them value and clean stores and clean bathrooms,” he said. “We have to be competitive” and treat them in a friendly way.

The company’s marketing department several years ago used focus groups to find what customers wanted. The feedback included clean stores with clean bathrooms and a wide variety of hot and cold food.

As a result, Kwik Trip since 2002 has expanded into hot- and cold-prepared food products in a big way, and has increased its selection of bakery items, coffee and other beverages.

By preparing its own dairy and other food products, and warehousing and trucking them to its own stores, the company benefits from vertical integration. Some of the nation’s better convenience-store chains also use the vertical integration model, operating their own commissaries and bakeries, Don Zietlow said.

Dairy:



Every Monday, Don Zietlow receives a report detailing complaints customers have filed in the past week. Four complaints — such as no toilet paper in a stall — were received in the previous week, he said. He or Steve Zietlow call the customer who complained, and then send a letter with a gift card.

“We thank them for bringing the problem to our attention,” Don Zietlow said. By treating customers that way, he said, “you can take a negative and turn it into a positive.”

The company’s greatest accomplishment, Don Zietlow said, “probably is making a difference in the lives of our co-workers and making their lives better because of Kwik Trip. And taking care of our customers.”

Greatest disappointment? Zietlow said he can’t think of one. “If I lived my life over, I wouldn’t change a thing. The Lord gave you talents. Use your abilities as best you can.”

BY THE NUMBERS

TOTAL EMPLOYEES: Kwik Trip has about 8,070 employees, up 8.2 percent from 7,457 in 2006, in the three-state area of Wisconsin, Minnesota and Iowa that it serves.

LA CROSSE AREA EMPLOYEES: In the La Crosse area, the company has about 1,543 employees, up 10.5 percent from 1,396 in 2006. The La Crosse-area numbers include the company’s support center — which in turn includes such facilities as the commissary, bakery, dairy bottling plant, ice cream plant, distribution center and corporate offices — plus store locations in La Crosse, Onalaska, Holmen, West Salem in Wisconsin and La Crescent, Minn. Most of the employment growth has been at the support center.

Steve Cahalan can be reached at (608) 791-8229 or scahalan@lacrossetribune.com.

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