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    Marathon CEO: Hess Retail Assets Would Be a Great Fit for Speedway

    Retailer focuses on expansion into Pennsylvania and Tennessee in the meantime.

    By Brian Berk, Convenience Store News

    FINDLAY, Ohio -- Hess Corp.'s retail division -- currently for sale -- would be a "great fit" for Speedway LLC, stated Marathon Petroleum Corp. President and CEO Gary R. Heminger during the company's fiscal third-quarter earnings call today.

    "I give my hats off to [Hess CEO] John Hess," he said. "He has developed one of the best looking retail assets on the eastern seaboard."

    As for whether Marathon would purchase some or all of Hess' 1,300-plus convenience stores and gas stations, Heminger said his company needs "to see how it plays out."

    In the meantime, Marathon's Speedway division has expanded into western Pennsylvania and Tennessee. "We will continue to 'step out' with Speedway," said Heminger. "We have seen great opportunities to move into these [two] markets."

    Looking at Speedway's earnings, net profit increased by one-third year-over-year, thanks to higher gasoline margins and strong foodservice sales. Speedway earned $102 million in its 2013 fiscal third quarter ended Sept. 30, compared to a net profit of $76 million during the same period last year.

    Gasoline and distillate sales increased year-over-year, as did in-store merchandise sales. When excluding cigarettes, same-store merchandise sales increased by 5.6 percent.

    Companywide, Marathon earnings declined to $168 million in its latest quarter, vs. a profit of $1.2 billion during its 2012 third quarter. Lower crack spreads, narrower crude oil differentials and backwardation in the crude oil market were cited for the significant earnings decline.

    Also affecting earnings is the Renewable Fuel Standard. Heminger noted during the call that he has asked the Environmental Protection Agency to relax these standards, which requires refiners to use 13.8 billion gallons of ethanol this year.

    Findlay, Ohio-based Marathon Petroleum Corp. operated 1,471 convenience store and gas stations as of Set. 30.

    By Brian Berk, Convenience Store News
    • About Brian Berk Brian Berk is managing editor of Stagnito Business Information's Convenience Store News and Convenience Store News for the Single Store Owner, where he specializes in covering motor fuels, technology and financial news. He has served the magazine industry for 14 years and has also worked in the radio and newspaper fields. Berk holds a bachelor's degree in communications from the State University of New York at Cortland and a master's degree in journalism from Quinnipiac University in Hamden, Conn.

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