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By Mehgan Belanger
Gulf Oil has completed the first stage of a reimaging project aimed at offering its retail partners more than just gasoline. First extensively covered by Convenience Store News in September, the new look has been completed at 11 company-owned and -operated locations on the Massachusetts Turnpike, and is now being rolled out to additional sites. Described by Gulf Oil president and CEO Joe Petrowski as "long overdue," the company's 11 locations along the Massachusetts Turnpike now sport state-of-the-art equipment and a modern logo dubbed Gulf Sunrise.
The Turnpike sites were finished in "record time" -- starting in August and completed before the holiday season -- according to Rick Dery, senior vice president and chief marketing officer for Gulf Oil. Since switching from Exxon- to Gulf-branded fuels, there has been a 6 percent increase in gas volume at the converted sites, he said.
"The really interesting thing from my perspective is there's always a concern when you switch brands that there will be an impact on volume," Petrowski told CSNews. The company reports volume increases at converted stores both on and off the Turnpike. "Exxon is a very powerful brand, but the realities of the market are that Gulf has more of a concentration of sites in the Northeast," Petrowski said. "Brands sometimes are like politics -- all are local."
On the Turnpike, 66 new Gilbarco Encore 500S pumps were installed, along with Datawire technology to speed up credit card processing time to just four seconds. New graphics and lighting on the canopies focus on the new Gulf image -- the orange and blue Gulf logo surrounded by a bed of clouds.
During the conversion, Gulf was surprised to find that only three sites had high-speed Internet connections, which was essential in operating the store's point of sale (POS) and protecting the promised four-second credit card transactions. Working with Verizon, Gulf was able to engineer a solution through technology firm Cybera, in which a VPN-based Wide Area Network was created using Verizon's DSL and frame relay connections, Dery said.
At presstime, the company was also working with the Turnpike Authority to bring video programming to the pumps, which was put on hold because the company does not own those properties, according to Dery. The company expects to install Gas Station TV (GSTV) later this month.
The new image has not only impressed customers, but Gulf's retail partners as well. From its distributors to the direct supply dealers, "everyone seems to really embrace the new look," Dery said.
"Sitting here as the CEO, it's great to hear so much good feedback," Petrowski said. "I think it's because when we set out to do the new design, we had meeting after meeting of 'What shade of orange?' and 'How many clouds should there be?' and ultimately, the greatest solution was to go out to the customers and ask them. It's not surprising that we based it simply on the customer feedback, but we'll take credit for being design geniuses," he joked.
Currently, the company is rolling out the design to its dealer locations and putting the finishing touches on the interior package, which will feature the Gulf Express c-store. This month, the company plans to unveil its first location featuring the Gulf Express concept, according to Dery.
As of late January, 50 sites outside of the Turnpike have been converted to the Gulf Sunrise theme, while another 200 were in different stages of transition to the Sunrise image. In addition, the company is receiving more than five calls a week inquiring about branding requests from operators outside the Gulf network, according to Dery. He noted the company is being more selective with where its banner is raised than in years past, and while flexible, will not consider anything less than the fuel volume of 745,000 gallons a month.
"Today, you must have a very attractive or high volume site to be competitive," Petrowski said. "If the site is not unique, then you'll need other components like a strong brand and image to bring people in."
Gulf has created an image-standards manual and rated each one of its sites. High performers were recognized, while those that did not meet company standards were put on notice, as they hurt the Gulf image and other local dealers, Dery said.
Existing Exxon retail partners were given priority to rebrand to Gulf Sunrise, followed by new accounts and sites recently added to the Gulf network, according to Dery. Lastly, all existing Gulf sites have a 36-month window, which began in February, to transition to the Gulf Sunrise image, he said.
Franchisees will be offered some assistance. "We want to make it cost effective," Dery said. "We don't want them to have to swallow a $60,000 image upgrade."
There are also some options for members of the Gulf network that do not have a c-store.
"We are introducing a bay conversion program to our distributors and dealers," Dery said. "More than 30 percent of Gulf locations have two to three service bays -- some are generating nice revenue, but many are closed. We're trying to create a turnkey solution to convert the property into a retail Gulf Express center."
The company also will unveil a car wash program. It is in discussions with several vendors, and Dery said the profit center would be in the form of a revenue-sharing endeavor or a sales-leaseback program.
Foodservice and quick service restaurant (QSR) options are an "important element going forward," Dery said. Gulf has a relationship with Subway and Dunkin' Donuts in place and recently invited QSR chain Arby's to present to its dealers, he said.
"The driving force will be to create nonpetroleum revenue streams for our customers, if they want them," Petrowski said. "We know costs, labor, land utilities and [gas price] volatility itself has probably caused a net erosion in margins. If we're going to survive and help our customers survive, we have to build services and products that are not solely petroleum-based."
For comments, contact Mehgan Belanger, Associate Editor, at [email protected].