Marathon to acquire Andeavor (Tesoro)

jamcool
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Re: Marathon to acquire Andeavor (Tesoro)

Post by jamcool » May 21st, 2018, 6:46 am

What happens to AM-PM? It is a different operating style than Speedway. The Midwest is different from the West Coast.

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Re: Marathon to acquire Andeavor (Tesoro)

Post by storewanderer » May 22nd, 2018, 9:07 pm

jamcool wrote:
May 21st, 2018, 6:46 am
What happens to AM-PM? It is a different operating style than Speedway. The Midwest is different from the West Coast.
AM PM is controlled by BP so those are under agreements with BP. I don't see much of an operating style at all with AM PM unless poor execution, high prices, and extreme inconsistency in operations, store odor, restroom availability, and even hours of operations are considered an operating style.

They could debrand most of the AM PMs and I doubt it would impact sales in the stores much at all. The few AM PMs that were built by BP were actually quite nice, but even some of those have weird execution issues due to the loose (nonexistant?) franchise standards.

Here in Reno someone actually opened a new Arco/AM PM inside a vacant gas station (had been a 7-Eleven long ago). The place is not doing well at all. It is nicely remodeled and so far the operator is keeping it clean and the employee on duty is always polite and friendly. The nearby Maverik and 7-Eleven are both kicking it, even with higher fuel (and in some cases store) pricing at both. The AM PM is dead. Also down in Carson City in the past six months two of the AM PMs have debranded (still Arco fuel, just no more AM PM) and they seem to have the same amount of store traffic as they did before and the stores are no different than before.

Not many new Arco brandings come with AM PM in Tesoro territory, but there are more in BP territory. For instance a ton of new Arco brandings down in Las Vegas (former Rebel Oil sites), none are taking AM PM Store, just the Arco fuel.

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Re: Marathon to acquire Andeavor (Tesoro)

Post by storewanderer » November 2nd, 2018, 11:44 pm

https://csnews.com/marathon-complete-20 ... y-end-2018

Wow, they moved fast with Super America. Speedway owned Super America until 2010 anyway and those sites never really did go off of Speedway's program/format so those are the easiest conversion. They had the same loyalty program as Speedway has (my old loyalty card even shows both the Speedway and Super America logos), kept using the NCR Radiant registers all these years (probably since it best supported the loyalty program), etc.

So it says they will go to the Southwest next, specifically El Paso and Arizona. It sounds like all those weird brands there like Giant and Howdy's will go away. Those were average at best c-store operations anyway and Speedway will be a remarkable improvement.

And now they are not yet sure how they will handle California. I question how successful it will be for them to bring the Marathon brand to California for dealer sites. I also wonder if they learned it won't be quite so easy to get out of those Shell and Mobil supplier agreements that Tesoro got involved in over the past decade... not to mention all those Arco owners who have a great business model that is widely accepted by consumers in California that is free of any credit/debit card acceptance fees due to not accepting credit cards and charging a fee for debit cards.

They do have a number of corporate operated sites in California that I will expect to see converted to Speedway in California, unless they decide they don't want to do corporate sites in California and shift those back to dealers. It appears they have about 150-170 corporate operated sites in California under a variety of fuel banners (USA, Arco, Shell, Mobil). Their corporate operated sites in California as it stands are lousy operations (Giant had been running them, but never put the Giant name onto them for some reason, or any programs so they have weird generic coffee/fountain programs, no name employee uniforms with generic odd "hello my name is" name tags, etc.) and need some pretty serious help on merchandising and promotion. Giant also continued to have two gas prices (cash price/credit price) in some of its NorCal sites that had it under previous owner Flyers despite not doing that anywhere else they operate. Another example of their lack of effort on bringing the sites into a consistent operating manner with their sites in the Southwest. Speedway should be an improvement there as well, but the locations are somewhat oddly scattered geographically, and many do not have full size c-stores.

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Re: Marathon to acquire Andeavor (Tesoro)

Post by BillyGr » November 4th, 2018, 4:34 pm

storewanderer wrote:
November 2nd, 2018, 11:44 pm
They do have a number of corporate operated sites in California that I will expect to see converted to Speedway in California, unless they decide they don't want to do corporate sites in California and shift those back to dealers. It appears they have about 150-170 corporate operated sites in California under a variety of fuel banners (USA, Arco, Shell, Mobil). Their corporate operated sites in California as it stands are lousy operations (Giant had been running them, but never put the Giant name onto them for some reason, or any programs so they have weird generic coffee/fountain programs, no name employee uniforms with generic odd "hello my name is" name tags, etc.) and need some pretty serious help on merchandising and promotion. Giant also continued to have two gas prices (cash price/credit price) in some of its NorCal sites that had it under previous owner Flyers despite not doing that anywhere else they operate. Another example of their lack of effort on bringing the sites into a consistent operating manner with their sites in the Southwest. Speedway should be an improvement there as well, but the locations are somewhat oddly scattered geographically, and many do not have full size c-stores.
The store sizes shouldn't be an issue - they've had experience with that taking over the Hess locations (we have stores locally ranging from just big enough for a few coffee pots and a cooler or two, to moderate sized ones that sit "between the pumps" on an island to full sized stores behind the pumps).

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Re: Marathon to acquire Andeavor (Tesoro)

Post by TempoNick » July 18th, 2019, 6:40 pm

I've noticed that there are several more Tesoro stations that became Arco throughout North Dakota and Minnesota. What's the point if they're all supposed to go to Marathon? Or has something changed.

With regard to the comments about Marathon keeping the Arco brand in Southern California, I think the answer is simple: You rebrand them as Speedways, but selling Arco Gasoline instead of Speedway Gasoline. Best of both worlds. In fact, I would do that to all of the Speedways they own, especially the former Hess stations where Speedway is not a known quantity. It's value added: People think they're getting major brand gasoline. And in Pennsylvania, they play off of whatever nostalgia there is for Atlantic.

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Re: Marathon to acquire Andeavor (Tesoro)

Post by storewanderer » July 18th, 2019, 10:33 pm

TempoNick wrote:
July 18th, 2019, 6:40 pm
I've noticed that there are several more Tesoro stations that became Arco throughout North Dakota and Minnesota. What's the point if they're all supposed to go to Marathon? Or has something changed.

With regard to the comments about Marathon keeping the Arco brand in Southern California, I think the answer is simple: You rebrand them as Speedways, but selling Arco Gasoline instead of Speedway Gasoline. Best of both worlds. In fact, I would do that to all of the Speedways they own, especially the former Hess stations where Speedway is not a known quantity. It's value added: People think they're getting major brand gasoline. And in Pennsylvania, they play off of whatever nostalgia there is for Atlantic.
I have no idea why the Arco brand is being introduced in ND/MN. I understand those Arcos accept credit cards too. Tesoro has always seemed to be very insecure with its legacy brands. I always thought both Tesoro and Mirastar had nice imaging and colors. After 9-11 they did a lot of marketing about being "a proud American company." Once they bought the (generic, boring, low end, discount) USA Gasoline chain they quickly rebranded various of their Tesoro and Mirastar brand stations to the USA Gasoline brand.

The only reason the Arco brand survived after BP in the first place was due to its "no credit cards" policy. Arco has a sweet thing going in California specifically where they can operate successfully without credit cards and with a debit card surcharge of 35 cents that is being passed on to the customer so you have these gas stations that operate with literally no payment card processing costs. Arco has not fared as well outside California in recent years due to heightened competition and most other territories are accepting credit cards at some or all locations (AZ, NV, WA, etc.).

Also the idea you describe of Arco gasoline and a Speedway c-store probably won't work. In Las Vegas, they already tried a set up of this nature with Arco gas/Rebel c-stores. You had the cash or debit+35cent fee Arco gas then you had the Rebel c-store which accepted credit cards (or debit with the 35 cent fee) only for store items; no credit cards allowed for gas. They seem to have recently given this up and started to accept credit for gas as well at these sites.

I am not sure how the consumer perception of Arco gas quality is... it is Top Tier... I have bought lots of Arco gas over the years and have not noticed any issues; however, a Google search along the lines of "Arco bad gas" may give some insights...

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Re: Marathon to acquire Andeavor (Tesoro)

Post by TempoNick » July 19th, 2019, 11:30 am

storewanderer wrote:
July 18th, 2019, 10:33 pm

I have no idea why the Arco brand is being introduced in ND/MN. I understand those Arcos accept credit cards too. Tesoro has always seemed to be very insecure with its legacy brands. I always thought both Tesoro and Mirastar had nice imaging and colors. After 9-11 they did a lot of marketing about being "a proud American company." Once they bought the (generic, boring, low end, discount) USA Gasoline chain they quickly rebranded various of their Tesoro and Mirastar brand stations to the USA Gasoline brand.
Tesoro isn't bad and I agree that their imaging was okay (except that it sounds Mexican). But I think Andeavor thought the Arco brand would resonate more. They were probably right. They announced they were planning up to 150 stations in the Upper Midwest within five years. Some locations were converted from Tesoro, some new locations, prior to the Marathon merger. But I looked at their website and there are several new Arco locations listed there recently, long after the Marathon merger.

Unless they were already in the pipeline, it's a head scratcher since it's been almost a year since the merger. Marathon is the right brand to have in that part of the country.

I never thought about the meaning Arco branding would have (no credit cards). I was simply looking at it from a familiarity standpoint. If nobody knows Speedway but they do know Arco, that may increase their comfort level that they aren't buying cheap gas. And Marathon displays that STP Additives logo on their pumps ... Arco with STP maybe (like Chevron and Texaco do with Techron, Mobil and Exxon with Synergy, etc.)?

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Re: Marathon to acquire Andeavor (Tesoro)

Post by Alpha8472 » September 22nd, 2019, 12:58 pm

Two local Shell stations near me have suddenly converted to Speedway. People from this area have never heard of this brand. Customer traffic has dropped off about 90 percent. The stations near me used to be packed as they were near the freeway ramps. Shell was a well known brand, and now the station looks like a trashy rundown gas station.

They ripped off the Shell logos and painted over the Shell colors with white paint. It looks so bad. The prices even seem higher. Speedway seems like a low quality gas brand.

I remember the Valero down the street rebranding from Valero to AndOil a while ago At least Andeavor spent money on new professional signs and new decor back then.

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Re: Marathon to acquire Andeavor (Tesoro)

Post by storewanderer » September 22nd, 2019, 2:04 pm

Alpha8472 wrote:
September 22nd, 2019, 12:58 pm
Two local Shell stations near me have suddenly converted to Speedway. People from this area have never heard of this brand. Customer traffic has dropped off about 90 percent. The stations near me used to be packed as they were near the freeway ramps. Shell was a well known brand, and now the station looks like a trashy rundown gas station.

They ripped off the Shell logos and painted over the Shell colors with white paint. It looks so bad. The prices even seem higher. Speedway seems like a low quality gas brand.

I remember the Valero down the street rebranding from Valero to AndOil a while ago At least Andeavor spent money on new professional signs and new decor back then.
I have noticed the past few weeks some Speedway sites in CA have been popping up. Did they do anything to the store interiors? Speedway has a lot of programs, private label items, plus its rewards card is pretty good. Those c-stores that Andeavor was operating were very, very generic operations despite being part of a "chain" they had generic cups, generic uniforms, no real programs to speak of in-store, they even had name badges that had no name on them. Andeavor took these stores back from tenant multi-site operators and at the time they did it, had no more corporate operated stations but were in the process of merging with Giant which had hundreds of corporate operated stations. So they gave these CA stores to Giant management to run but Giant never put its name onto the stores for some reason, it was as if they did not want the stores. The receipts did not even show the name of the store (since it basically had no name). The receipt would just say in big print at the top "STORE #6113" or similar.

I don't think AndOil has anything to do with Andeavor; their owned brands were Arco, Tesoro, SuperAmerica, Giant, Howdys, and USA.

They appear to be converting to Speedway the locations they had branded as Shell first. They have quite a few branded Mobil in the more remote rural areas of eastern California and I am wondering when they will convert those. A number of those are former Flyers sites and those were pretty high volume stores, mostly decent sized, and should make good Speedways.

Speedway typically prices its fuel very competitively, so I wonder what the deal is here if they are testing the waters with a high price or what (stupid move to do that). I wonder if the store is not yet ready but they needed to break off from Shell and will convert the store in the next week or so over to Speedway's products and programs and then get the fuel price back down to drive traffic in. It seems like they should have fixed the c-store first then rebranded the fuel. They do same price cash/credit which will be an improvement over most stations in California. Speedway also runs aggressive promotions in-store to drive traffic, specifically on fountain drinks and tobacco. I am not entirely sure how high the demand is in the California market, for 69cent fountain drinks and low cost tobacco.

I've dealt with Speedway quite a bit in the midwest and they are a reliable operator. I am glad to see them coming to California given the current state of the c-store business in California has been very poor since so few sites are corporate run in the state. Too many franchise operations leads to mass inconsistency. Add to that all those AM PMs that don't take credit cards (for me, it is as if those stores don't even exist) and it is just not good. Speedway will probably need to make some adjustments to what it is doing (price increases in-store for one) to be profitable in California, but they will figure that out over time.

Where I think they need to tread lightly is with the "Marathon" brand. I do not think converting Shell, Mobil, etc. stations to Marathon is going to be a good strategy. Marathon is the brand they use for dealer stations and Speedway for corporate stations. I question how many dealers out west will want to have the Marathon brand. I am not sure that brand has ever appeared anywhere even close to the west or mountain states.

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Re: Marathon to acquire Andeavor (Tesoro)

Post by Alpha8472 » September 22nd, 2019, 7:01 pm

This was previously a USA Gas station and originally a Shell before that. There is no walk in convenience store. There is a cashier booth which sells a limited supply of bottled drinks and snacks. Perhaps, they could add a convenience store, but they would need to get rid of the single row of parking spaces to make room. I did not see any soda fountain. This gas station has limited space and no room to expand. There are apartments literally feet away on the sides. I do not know how people can stand the gas fumes right outside their windows.

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