DULUTH, Minn. -- A Phillips 66 retailer in northern Minnesota reported mixed emotions yesterday upon hearing ConocoPhillips would be pulling its brands out of his state, as well as all or part of seven other states.
I'm not too excited about it, but it's not the end of the world, the retailer told CSP Daily News on the condition of anonymity. I'm just glad we heard something. It's been three or four months now we've been in limbo. That makes it hard to plan ahead.
The retailer, who had received word of the market exit just 10 [image-nocss] minutes prior, referred to an announcement that came down from the Houston-based Big Oil company in August essentially saying it didn't know if it would stay in Minnesota or several other states for the long haul.
They put us in a position where we couldn't sign on any new business with Phillips, saying that we're not sure whether we're going to be in Minnesota or not, he said.
The retailer, whose company has carried the Phillips brand for more than 50 years, will use the next 180 days to look for a new gasoline supplier. We're not very big, but we'll be OK, he said. We've debranded some [sites] in the past. [The biggest issue is] we've got to figure out how we're going to take care of credit-card customers.
ConocoPhillips is transitioning out of branded gasoline and branded diesel sales in Minnesota, North Carolina, South Carolina and certain portions of Wisconsin, North Dakota, South Dakota, Arizona and Nevada, as reported in a CSP Daily News Flash yesterday.
The company made the portfolio rationalization strategy announcement yesterday as part of its ongoing efforts to focus on the areas where we can concentrate our resources, where we have more refining and transportation logistics and the advantages of that, spokesperson Kelvin Covington told CSP Daily News.
This transition, to be completed by early August, will reduce the number of Phillips 66, Conoco and 76 branded locations by about 850, which represents 8.5% of ConocoPhillips' branded outlet network.The remaining approximately 9,150 branded outlets will be centered in markets where ConocoPhillips can capitalize on market efficiencies and stronger competitive positions, according to a company press release.
We're trying to get out of markets where we're having to purchase barrels for resale, said Covington. Now we can concentrate on areas where we want to grow our brand, and not in places where we've been stagnant and not able to compete.
The move comes about eight weeks after ConocoPhillips announced its plan to sell all of its 830 direct-owned gas stations, an effort driven by a study on how best to market our domestic refinery system's clean products, chairman and CEO Jim Mulva said in December.
Meanwhile, the Minnesota retailer said he'll likely stay away from Big Oil brands in the future. We'll probably go unbranded or with a minor brand. I'm not going to get back in with a major oil company, he said.
Ultimately, he remains focused on the business at hand. If we just run our retail business and we take care of the customer, we'll be fine, he said. I think the question about the quality of the [gasoline] product is [moot]. Everybody understands there's not much difference in gasoline anymore.
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