ENON, Ohio -- Look for Speedway to grow its retail footprint east of the Mississippi River in the future, maintaining its primary markets in Pennsylvania and Tennessee while seeking to fill in gaps in Georgia, South Carolina and the Florida panhandle.
In a look at parent company Marathon Petroleum Corp.’s effort to deal with the recent volatility of oil prices, IndustryWeek reported that “changes in refining and expansion of Marathon’s midstream business are being completed in tandem with moves to expand Marathon’s retail business.”
Don Templin, president of MPLX, Marathon’s pipeline and logistics operation, and executive vice president of Marathon Petroleum, told the publication the company seeks “density” in its convenience-store operations to “be able to drive some of the efficiencies we typically would get,” explaining the company will both build and acquire sites.
While most Marathon-branded gas stations have long-term supply arrangements with the oil company, most of those 5,600 stations are owned by individual businessmen, the report said.
Marathon Petroleum itself, through subsidiary Speedway, owns and operates 2,770 locations in 22 states, making it the third-largest c-store-chain operator in the United States after 7-Eleven and Alimentation Couche-Tard’s Circle K.
Enon, Ohio-based Speedway’s store count increased significantly in 2014 when Marathon purchased more than 1,200 locations from Hess Corp. The deal boosted Speedway from the No. 6 position on CSP’s 2014 list of the Top 101 largest c-store chains to the No. 3 spot.
Marathon announced in February that the conversion of the Hess sites to the Speedway brand was complete.
The Speedway stores earn about two-thirds of their margins inside the store, so they help reduce Marathon’s exposure to changes in pump prices, the report said. Templin said the retail business not only provides a more stable income flow but the EBITDA it generates ($952 million in 2015) helps the company maintain its investment-grade credit profile.
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