Speedway Embraces Its Newfound National Presence

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Speedway Embraces Its Newfound National Presence

By Melissa Kress - 04/23/2019

ENON, Ohio — On Oct. 1, 2014, Speedway LLC closed on its acquisition of Hess Corp.'s retail network, adding 1,250 locations to its portfolio. Prior to this deal, Speedway's store count stood at roughly 1,500 stores. By adding Hess' assets, the chain's store count neared 2,800 and landed Speedway in the No. 1 spot on the 2015 Convenience Store News Top 20 Growth Chains ranking.

Fast forward four years and on Oct. 1, 2018, the Enon, Ohio-based convenience store operator experienced another growth spurt — this time, acquiring San Antonio-based Andeavor’s retail locations thanks to a strategic tie-up between Andeavor and Speedway parent company, Findlay, Ohio-based Marathon Petroleum Corp. (MPC). Speedway is a wholly owned subsidiary of MPC.

The new national powerhouse has 3,923 c-stores from coast to coast — and once again earned the No. 1 spot on the 2019 CSNews Top 20 Growth Chains ranking. In fact, Marathon Petroleum’s addition of 1,492 locations between January 2018 and January 2019 accounted for more than 40 percent of the 3,635 stores overall added by the top 20.

"That's pretty rapid growth, from 1,500 stores four years ago to just about 4,000 stores now," said Speedway President Tony Kenney.

The addition of Andeavor has expanded Speedway’s operation across key markets nationwide, combining the strong position MPC has historically enjoyed east of the Mississippi with the western U.S. presence Andeavor had built up over time.

"Before acquiring the Hess locations, Speedway was a Midwestern company — Ohio, Indiana, Michigan, Illinois, Kentucky and West Virginia. Hess expanded our footprint up and down the East Coast, from the Northeast down to the Southeast. But still, with the combination of those two, we were all east of the Mississippi,” Kenney explained.

The Andeavor acquisition changed that. Its stores are in the southwestern United States — West Texas, New Mexico, Arizona — and then up and down the West Coast.

"California will be our largest state in terms of store count," Kenney noted. "And there are some stores in Oregon, Washington and Alaska."

'Super' Once Again

The Andeavor transaction also did something else for Speedway: it returned the SuperAmerica banner back to the retailer. Speedway had sold off SuperAmerica eight years earlier. A series of acquisitions brought SuperAmerica into the Andeavor fold in 2017.

Speedway acquired 200 company-owned SuperAmerica locations in Minnesota’s Twin Cities market as part of the Andeavor deal. To date, 170 of those locations have been converted to Speedway, and the retailer expects to finish that market by the end of April.

The re-identification involves much more than just changing the signage outside.

“A lot of people think you show up one day and change the ID sign outside from SuperAmerica to Speedway. What's really involved is you’ve got to get inside the store. We change all the point-of-sale, the back-office systems, we install our loyalty program, [and] there is extensive training of employees on new systems and procedures,” Kenney detailed.

"All of that is technology driven, so we are basically installing a whole new connection to a network to be able to run the stores like the rest of the Speedway stores,” he continued. “What's really happening inside the store is much more complex than just the appearance — the things that you see from the outside perspective, the painting and things like that."

With integration of the SuperAmerica stores almost wrapped up, Speedway is planning its next market for re-identification. In addition to SuperAmerica, Andeavor's retail-marketing system included stores marketed under such well-known fuel brands as ARCO, Shell, Exxon, Mobil, Tesoro, USA Gasoline and Giant. 

According to Kenney, Speedway is already doing the design work in the stores and getting permits to begin re-identification of all the Southwest locations: West Texas, primarily the El Paso market; New Mexico; and Arizona. Work was slated to begin on those 250 stores on April 1.

Along with the re-identification process, Speedway is also learning from Andeavor's best practices.

"There are best practices from their entire operation,” Kenney noted. “We're learning every day from each other; two great companies that had different approaches on how they went to market.”

For example, Andeavor was a very strong fuel operator, so the company focused primarily on the fuel side of the business. It had a number of strong relationships with major brands to market fuel and did substantially higher-than-industry volumes at its locations, according to Kenney.

"There are several best practices that we are going to apply as we look forward to the work we have to do, especially as we get into California," he said.

Another area of opportunity Kenney sees is SuperAmerica's Super Mom commissary and bakery — a program he admits he’s always been a big fan of. As Speedway continues to grow its foodservice business, it looks to add efficiency by controlling more of its supply chain.

On the other side of the equation, Speedway also has several best practices to apply to Andeavor — chief among them, Speedway’s strength in the in-store business.  

“We are able to bring a lot of our knowledge and learnings, and relationships that we have with CPG companies and vendor partners," Kenney said. "We have a strong loyalty program. We want to leverage that. There will be some best practices brought from the Speedway side as we continue to integrate the Andeavor stores."

Click below to read our full report on Speedway, “A New National Powerhouse.”