CST Brands: Turning a Corner

As CEO of Valero spinoff, Bowers brings fresh energy to new retail brand

Angel Abcede, Senior Editor/Tobacco, CSP

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“Private label does a lot for us,” he says. “It helps us understand the total cost of goods, allows us to negotiate with national brands and give the customer good value.” Private label also develops loyal customers, he says, who are interested in visits to CST locations for those products.

While it has and does work with proprietary brands such as Subway, Adams says the company kept much of its foodservice options tied to its own brand. Going forward, it’s interested in partnering with national QSR brands at highway locations where it can draw in new customers, but for the most part it intends to stay on its own Corner Store track.

And for Poye, that’s the opportunity. “We’re interested in all levels of service, execution, margin and inventory to the point of driving quality food and great food experiences,” Poye says. “Our challenge in the current environment is to … make a broader brand that will drive a single vision and that you can execute.”

Growth Minded

Bowers herself is bullish on the opportunities foodservice will bring, especially at the new-build locations. “It’ll have a different mindset,” she says. “What opportunities are we missing from a food perspective?”

That said, growth must occur at the proper pace and with the right kind of retail offer, she emphasizes. She says the industry is ripe for consolidation and that for a location to sustain success it needs to have scale, the ability to hold fuel margins and have an established foodservice program—things small operators may not have access to.

At the same time, she says that in the past year, her team has looked at more than 1,000 sites and chose not to buy.

“It’s about having the correct sites,” she says. “And how we grow customers vs. rooftops.”

CST by the Numbers

CST Brands’ numbers speak to the company’s challenges as a network, but also its scale and the opportunities it has to grow via new builds and M&A.

1,900: Number of company-run c-stores in the United States and Canada

1,000: Number of “legacy” locations that don’t fit the 4,500- to 5,500-square-foot model

87 and 250: Number of kiosk (less than 1,000 square feet) and small-format sites, respectively, in CST’s network

61%: Percentage of CST stores in Texas

81%: Ownership of store property in United States

2,200 square feet: Average store size

$12 billion: Revenues in 2012

$32.53 per share: Price at which CST was trading in December 2013

On the Menu

With an eye on developing a unified program, CST’s new foodservice director, Richard Poye, says he looks at everything from supply to store-level execution.

“You look at the steps and remove things that don’t benefit the dish or add to safety,” he says. “You go for better-tasting food and what it takes to streamline the process.”

He also tips his hat to what CST has already done, creating original foodservice items, developing kitchens at many of locations and putting that foodservice mindset in front of its customers.


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