DUXBURY, Mass. -- VERC Enterprises Inc. said that it will convert 14 of its locations from Exxon to Gulf by the end of 2008. Leo Vercollone, CEO of VERC Enterprises, said that the locations undergoing the change are stores in Westford, Kingston, Lynnfield, Raynham, Duxbury, Nobscot (Framingham), Neponset, Berlin, Danvers, Boxboro, Stoughton, Plymouth and Allston, Mass., and Nashua, N.H. VERC Enterprises also owns and operates five stations under the Mobil brand, which will be unaffected by the change, the company said.
Several factors have prompted the conversion, Vercollone said. In 2000, [image-nocss] when Exxon bought the Mobil brand, the Federal Trade Commission (FTC) required them to own either the Mobil or Exxon brand, and that retaining ownership of both could be considered an unfair marketshare. Mobil made the decision to sell the Exxon brand.
According to Vercollone, there is at least some question as to whether the Exxon brand will even exist in this marketplace two years from now.
The bigger factor, though, he said, was that the Exxon brand is becoming expensive. “We as a company are looking to give our customer a better cost value for gasoline, and we had the opportunity to switch over to the Gulf brand, which is the second leading marketshare brand in Massachusetts.”
Gulf is also a local brand, and Vercollone said that on average, the cost of Gulf gasoline is less than that of Exxon gasoline, and this will mean savings to customers.
"I think Exxon is a more premium brand, but consumers are looking for the least cost to them," Vercollone told The Enterprise News. "Purchasing gasoline is becoming more of a commodity value proposition."
He said the wholesale price of Gulf gasoline is typically between 2 cents and 7 cents cheaper per gallon than Exxon, a significant difference considering his company only makes about 12 cents per gallon of gasoline it sells to consumers.
The move by Verc follows the Massachusetts Turnpike Authority's announcement last summer that it would rebrand the gas stations at all 11 rest stops along the Massachusetts Turnpike to the Gulf name. (Click here for CSP Daily News coverage of the conversion.)
Gulf Oil CEO Joseph Petrowski told the Enterprise News that consumers can expect many more transitions in the months to come.
In September 2003, Gulf acquired from ExxonMobil exclusive rights to the Exxon brand name in all six New England states and New York through February 2010, after which the Exxon brand was to disappear from the region. Rather than wait until the end of its contract, Gulf has decided to stop distributing the Exxon brand by February 2009, Petrowski said. Gulf is currently wooing independent retailers to switch now, he said, or at least to stay with Gulf when it stops distributing Exxon next year.
"The Exxon name would go dark [in New England]," Petrowski told the paper. "So we figured why invest time and effort in developing [Exxon] when, frankly, we had a brand that was five times better?"
Vercollone said his company's move to Gulf will help it remain competitive in an increasingly difficult market, but he said it was not an easy decision. He expects the conversion to cost between $15,000 and $20,000 per location. "This is a significant step for my company," he told the newspaper. "We've been with Exxon for 30 years."
A station in Kingston was converted two months ago, Vercollone said, and he expects the bulk of the work at the other stations to be completed by September.
Verc's five Mobil-branded stations, which are affiliated directly with ExxonMobil, will not be affected, Vercollone said.
Last July, Hyannis, Mass.-based Christy's of Cape Cod LLC announced that it would convert its 15 CITGO-branded locations in Massachusetts to Gulf. (Click here to view CSP Daily News coverage.)
Gulf Oil, Newton, Mass., is one of the Northeast's largest wholesalers of refined petroleum products. It distributes motor fuels through a network of more than 2,400 Gulf-branded gasoline retail centers, 12 proprietary oil terminals and a network of more than 50 other supply terminals. Gulf supplies heating oil, diesel fuel, jet fuel and kerosene to these branded retail outlets through both its Gulf brand and, in the seven states of New England and New York, the Exxon brand. Through its unbranded subsidiary, Great Island Energy, Gulf also supplies petroleum products as well as risk management and financial services to industrial, commercial and independent retail firms. Gulf, through its ownership interest in World Energy, is also a major distributor of biodiesel.
Most of Duxbury, Mass.-based Verc's 20 locations are open 24/7 and most include a Dunkin' Donuts franchise on site. Additionally, the company owns and operates three Briteway car wash facilities in Norwell, Marshfield and Plymouth, Mass.
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