NEW YORK — About 54 years ago, John Thompson, the son of the founder of 7-Eleven and CEO of its then parent company Southland Corp. (which was approaching $1 billion in annual revenues), sought out CDI, the retail design company that I subsequently acquired, to design a new prototype 7-Eleven store. Thompson had selected CDI at the recommendation of Doris Gianninoto, who had designed the 7-Eleven logo. Doris was the wife of the owner of Frank Gianninoto and Associates, then a leading packaging and graphic design company.
Working with Doris, CDI developed seven prototype 7-Eleven models. It featured prefabricated construction elements and the first end-checkout in the industry for efficient operation with a single employee, which was standard for convenience stores at the time.
Doris subsequently divorced Frank Gionninoto and, after becoming Mrs. John Thompson, established an in-house 7-Eleven design department in New York, commuting weekly from Dallas … but that’s another story.
Many years later, CDI was retained by Emro Marketing Co., a subsidiary of Marathon Oil, to design a unifying format and identity for a group of convenience-store companies that were then 50% owned by Emro and were slated to become 100% owned on the retirement of their principals. Our resulting design was the now well-known Speedway logo.
A Personal Interest
I mention all of this to explain why I have more than a passing interest in these two companies that have now become one … and why I am fascinated by the opportunities and issues that the combination of the 7-Eleven and Speedway brands present.
The way I see it, the Speedway acquisition provides 7-Eleven with two distinct advantages. The first and most obvious is the addition of approximately 3,500 Speedway-branded convenience stores—the second largest group of non-7-Eleven c-stores in the United States after Alimentation Couche-Tard’s Circle K sites. The second is long-term access to the seventh-largest gasoline brand in the United States. The Speedway fuel brands trails only the majors: Shell, Exxon, Mobil, Marathon, Chevron and BP.
In the c-store arena, there are some pretty obvious reasons for 7-Eleven to convert the stores to the 7-Eleven brand. After all, while the company’s recent release of research stating “that 7-Eleven has always been a brand with customer-obsession at the core, going over the top to feed people’s joy and always meeting them where they are by offering small delights that are a bright spot in the day” may be a little over the top,7-Eleven is by far the leading c-store brand globally. Stores rebranded to 7-Eleven are known to generate increased sales. The company’s data-driven operating system is also likely to significantly increase sales in the acquired Speedway stores, just through product optimization.
On the other hand, in the motor fuel arena, the Speedway brand presents several opportunities for 7-Eleven, in addition to the revenues the added sites will produce.
The Speedway brand is known for competitively priced gasoline at high-volume sites—and so may not be suitable for the many 7-Eleven sites with small, low-volume gas installations. But just assuming that 50% of the approximately 9,400 existing 7-Eleven locations in the United States were rebranded to the Speedway fuel brand, there would then be more than 8,000 Speedway gasoline-branded locations in the United States. That would move Speedway up to the fifth-largest U.S. gas brand after Shell, Exxon, Mobil and Marathon, putting it in the league of major gasoline brands.
The Other Shoe
If it were not for the impending demise of all the major gasoline brands that I wrote about two weeks ago (“How Do You Brand Electricity?”), this conversion would be a no-brainer. It probably still is, because it will be several years before the decline of the gas brands becomes severe, and the advantages of controlling a major gas brand in the interim may well be worthwhile.
Finally, here’s another thought: Since 7-Eleven has announced an aggressive plan of installing 500 electric-vehicle charging stations at their sites by the end of 2022, if they were to brand these as “Speedway EV charging stations,” could 7-Eleven actually have the answer to my question “How Do You Brand Electricity?” Perhaps there is a way after all.
Gerald Lewis is a semi-retired consultant who has served more than 300 convenience store and oil companies at board level on five continents for more than 40 years. Reach him at glewis@c-man.net and (646) 215-7741.