CINCINNATI -- Gilligan Oil Co.'s acquisition this summer of 33 Shell stations in Hamilton, Butler, Warren and Clermont, Ohio, counties and supply contracts for 10 other area Shell stations, makes it one of the largest gasoline suppliers in the area, reported The Cincinnati Enquirer.
The expansion nearly triples Gilligan Oil's size from supplying about 35 million gallons of fuel annually to 100 million gallons, president Patrick Gilligan said. And the company has a three-pronged strategy to make the business grow. Shell's a top-selling brand here, so [image-nocss] we're going to reinvest and rebuild the franchise, he told the newspaper.
The first part of that strategy is to spend about $10 million over the next couple of years to expand about a dozen of the stores. Gilligan Oil, which is a franchisee for Popeye's and Subway restaurants, plans to add one or the other of the outlets to its stations that don't already have quick-serve restaurants, along with c-stores, fueling stations and carwashes, the report said. The second step is to expand its network of branded supply agreements, and the third would be adding new outlets.
We're excited about the opportunity here, said Gilligan. Cincinnati-based Gilligan Oil was founded in 1993 by Patrick Gilligan after leaving a career with BP Oil. The first site was located in Columbus, Ohio. The company has since added numerous company-operated locations in central and southern Ohio. Gilligan Oil has sold fuel under the BP, Shell, Sunoco and Exxon banners. In addition to operating our own convenience stores, it also operates Gilligan Oil Distribution & Transportation, Subway food franchises and Gills Car Washes. Gilligan Oil is also the regional franchise developer for the ExxonMobil On the Run c-store franchise.
With the Shell acquisition, Gilligan Oil has grown from 12 stores and supplying 25 others to operating 45 stores and supplying 35 others.
Shell, which last year announced plans to sell retail operations in 16 markets, offered the local sites in a multi-stage bidding process, said the report.
Gilligan said he thinks his presence locally helped his bid. All the other bidders were from outside Cincinnati, he told the paper. It was basically an investment strategy by Shell. They didn't want to leave the Ohio market, but they want to take some of their investment here and put it in other areas.
He said the acquisition, accomplished with the financial backing of unidentified local investors, will expand his company's revenues to about $300 million annually from $80 million. With the acquisition, Gilligan Oil's payroll has expanded to about 500 full-time and part-time employees.
The entry of supermarkets such as Kroger and Wal-Mart to gasoline retailing has taken away about 25% of the local market, which also includes BP, Speedway and UDF (Mobil), Gilligan said. To fight back, gasoline retailers are turning to more profit centers at each location. Gilligan is also borrowing some tactics from some of the big chains, which offer gasoline discounts for grocery customers. The company plans to offer $2 carwashes and gasoline discounts for carwash customers, said the report.
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