Sunoco Unwraps Laredo Taco Co. Growth Plan
HOUSTON — Sunoco LP continued the expansion of proprietary food offering, Laredo Taco Co., in the first quarter of 2016 — and the convenience store operator is just getting started.
As of March 31, Laredo Taco Co. had approximately 450 locations, with the majority in Texas. However, Sunoco opened its first non-Texas Laredo Taco Co. location on Jan. 9 outside of Pittsburgh and since then, another five locations have welcomed customers primarily around the Nashville, Tenn., area and in Pennsylvania, President and CEO Robert Owens revealed during Sunoco's first-quarter earnings call Thursday.
On the call, Owens took the wraps off further expansion plans for the foodservice program, which Sunoco acquired when it took ownership of Stripes convenience stores. Sunoco will continue to add locations throughout 2016 and by the end of the year, it expects to have 20 Laredo Taco Co. locations outside of the Southwest, which will "give the concept a real test." Every new-to-industry site features the proprietary food offering.
"We see Laredo Taco as an important growth driver for business and so far, the customer response to the new offering in these markets has been very enthusiastic," Owens noted.
Laredo Taco offer generous portions of consumers' favorite Mexican food, handmade with the freshest ingredients every day. Eggs, bacon, potatoes, chorizo, beans and cheese are served up exactly how the customer wants, wrapped in handmade tortillas made fresh daily in Laredo Taco Co. kitchens.
At the same time as Sunoco seeks to expand the foodservice offering outside Texas, it is also looking to expand the Sunoco brand within Texas. "As of now, approximately 200 locations in Texas are flying the Sunoco flag," Owens said. "This represents about 20 percent of our company-owned and –operated sites in the state."
Sunoco has entered into several acquisition agreements since the start of the year. It is in the process of purchasing 14 company-operated and 37 dealer-owned and -operated sites in central Texas between Waco, Houston and Austin. "This group of assets will provide additional tuck-in scale in a core Texas market and bolster third-party dealer business, allowing for future growth in the wholesale segment," Owens explained.
The retailer is also in the process of adding a package of 18 large-format, company-operated convenience stores and four land parcels in upstate New York. "This opportunity gives Sunoco additional scale in our core Northeast market. It's an area of strong margins and gives us the ability to capture both fuel supply and operating and supply chain synergies," the chief executive said.
Both of these acquisitions are expected to close later in the second quarter or early in the third quarter of 2016.
Foodservice enhancements are also taking place in Sunoco's Aloha Petroleum Ltd. business in Hawaii, which inked a store development agreement with Dunkin' Donuts to be the exclusive developer of Dunkin' Donuts restaurants in the Aloha State for an initial term of eight years. Aloha has committed to building and operating 15 units as a start.
Approximately half of the 15 restaurants will be built on existing Aloha-controlled Island Mart c-store properties, Owens said. The remaining half will be standalone restaurants developed on properties the company will acquire in the future.
Sunoco LP is a master limited partnership that operates approximately 1,340 convenience stores, including the APlus, Stripes, Aloha Island Mart and Tigermarket brands, and retail fuel sites. It distributes motor fuel to c-stores, independent dealers, commercial customers and distributors located in 30 states at approximately 6,800 sites. Houston-based Energy Transfer Equity LP owns Sunoco's general partner and incentive distribution rights.