SAN ANTONIO -- Refiner-marketer Valero Energy Corp. has implemented a profit-improvement initiative to rein in retail overhead costs, CSP Daily News has learned. The initiative could result in a vastly remade organizational structure, without affecting store-level operations, according to the company.
Valero is currently undertaking a very proactive profit-improvement initiative, Gary Arthur, senior vice president of retail for Valero, told CSP Daily News through a company spokesperson. We are creating a standalone retail organization within Valero where [image-nocss] we have total control over all of our overhead expenses.
As a part of this initiative, he said, we will be streamlining our retail organization by offering a voluntary early-retirement program to all eligible employees over the next few months. This is a very positive initiative that has been well-received by our retail organization.
Details of the potential changes remain unclear, though the Valero spokesperson said via e-mail that the initiative should be completely invisible at the store level. She also said that the standalone organization within Valero would have complete control of its overhead and expenses, separate from the rest of Valero's corporate overhead.
Members of Valero's wholesale network told CSP Daily News they were not aware of the company's profit-building efforts.
I know their G&A was pretty heavy, said Dave McComas, president of Fas Mart/Shore Stop Convenience Stores, Mechanicsville, Va., which counts Valero as its main supply partner for its more than 150 stores in the Mid-Atlantic and New England. The brand has been great for us. I visited a few of their [corporate] stores and liked what they were doing. Beyond that, I haven't the foggiest idea and wouldn't be in a position to comment on it.
Another marketer foresaw a continued commitment toward growth, indicating that the move to streamline the network would not inhibit Valero's will and capability to maintain a strong level of support while branching out.
Li'l Cricket Food Stores, Spartanburg, S.C., has nearly 30 stores flying the Valero flag, but that number could grow in the near future. With the Phillips brand going away at a number of Li'l Cricket stores late this summer, the company will have some decisions to make regarding brand partnerships for the majority of its 89 stores.
Gordon Zuber, president of Li'l Cricket, told CSP Daily News he hadn't heard any rumblings of shakeups within Valero's network. If anything, he sees the marketer-refiner's teal and yellow imaging becoming more prominent.
They are trying to expand with us since we're losing the Phillips stores in August, Zuber said. We'll have some 50 stores up for grabs. Valero has done well for us. If they're scaling back, it doesn't look like it to us.
Valero's retail and wholesale network has grown steadily over the past four years. Valero now has approximately 3,500 branded wholesale outlets, giving the company a total of roughly 5,500 locations in the United States, Canada and the Caribbean under various brand names, including Valero, Diamond Shamrock, Shamrock, Ultramar and Beacon, according to the company's website.
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