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C-Store Rebranding in 2019: Chains Weigh Opportunities and Risks

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The signs, they are a changin’. So are the coffees, the burritos and the fuel brands. Convenience stores are in the midst of an overhaul as chains absorb brands large and small. The end result: a cohesive national strategy.

The opportunities for synergy certainly are there—but so are the risks of removing loyalty from the brand that is gone.

But why the overhaul and why now? Several reasons. Convenience store branding aligns with a larger trend that touches just about any corporation in America. In fact, Inc. named 2019 as “the year of the rebrand.”

The reasons for rebranding of any business are vast. In some cases, it simply is to update the look, to make an old brand more modern. But in most cases, it reflects a strategic realignment, new ownership, or some other signal that the old is gone and it’s a whole new ballgame.

Convenience store branding, though, has been an outgrowth of the mergers of the last few years, with new owners trying to bring cohesion to their offerings.

Rebranding can be risky. Take Tropicana, which rebranded its orange juice cartons in 2009 to a more modern look. Sales dropped 20 percent in the first six weeks before the company went back to the old look.

Convenience store re-branding is marked by potential rewards as well as risks. It certainly isn’t for the faint of heart or the poor in pocketbooks. VIM Group estimates a rebrand costs 20 times more than creating a new brand identity.

Executed well, however, the payoffs can be enormous. Here’s a look at four recent convenience store branding projects, what drove them, and what results are apparent.

 

Circle K: Brand Recognition

Couche-Tard had the challenge of aligning a number of regional brands in its international portfolio. Over the years, it had grown dramatically, picking up convenience store brands Circle K, Kangaroo, Mac’s and Statoil along with small regional players.

In 2015, it launched a global rebranding, bringing almost all of its 16,000 stores under the Circle K logo. Only a handful of Couche-Tard branded stores remained in Quebec “due to the specifics of the market,” the company said.

Changing regional and even the national legacy brands into Circle K was completed with a gentle hand. The dominant red color in the logo harkened to colors used by Mac’s and Kangaroo Express. The orange line beneath the logo pays homage to Statoil brand.

Reflecting on the rebranding in 2019, Circle K President and CEO Brian Hannasch told CS News, “The key learning is, I should have done it a decade ago.” In terms of his strategy, Hannasch said, “I will start with culture. That’s what I have always said was our secret sauce. Having one brand gives us a platform to communicate across 135,000 employees what we stand for, what we want to become and the journey we are on.”

The rebranding extends well beyond a new logo; popular Circle K brands like Polar Pop and Simply Great coffee have been introduced into the newly rebranded stores.

The initial results are great, Hannasch said, especially in areas where Circle K was already an established brand. Even in Scandinavia, where Statoil was well established, the results were promising.

 

Speedway and Andeavor: Combined Power

As with the Circle K rebrand, Speedway’s acquisition of Andeavor provided opportunity for alignment. Some 700 stores were rebranded under the Speedway marquee, bringing the brand into the western United States. Company-owned Andeavor stores were able to enjoy Speedway’s home office, back office, and point-of-sale platforms.

Gary R. Heminger, chairman and CEO of Marathon Petroleum Corp., which operates the Speedway stores, saw potential for “significant synergies” with the new national brand. “Strong, recognized regional brands provide nationwide coverage for our consumers and create additional channels to better serve our jobber, dealer, and wholesale customers,” he noted. “We think substantial opportunities exist to capitalize on the footprints both companies have built over time.”

Andeavor had focused its efforts largely on the fuel side of the business. The rebranding with Speedway brings a new loyalty program and Speedway’s food offerings. Speedway got the popular Andeavor-owned SuperAmerica’s commissary and bakery.

The merger allows Speedway to control more of its supply chain. Meanwhile, speedway will allow the former Andeavor stores to expand on the rapidly growing retail side of the convenience store business.

 

EG America: Equal Parts Experience and Expansion

While the Circle K and Speedway initiatives were about expanding into new territories in the United States, the EG America Group took on a whole new continent. The UK-based company made a big splash in the United States, first acquiring Kroger Co.’s convenience stores in 2018 and adding 225 Minit Mart stores a few months later. It also added Fastrac and is building some new locations, too.

The changes it made at the former Kroger c-stores may point to EG America’s strategy. Kroger had operated brands like Turkey Hill, Tom Thumb and Loaf ‘N’ Jug with individual presidents. EG America moved them into a shared services model with two regional vice presidents.

Interestingly enough, as this Brit company moved into America, it paid homage to its past ownership, keeping the Kroger c-store logo, a rhombus with a map of the United States. Minit Mart stores will be rebranded with the new look.

Most of those acquisitions received significant investments from EG Group. All stores got new food service equipment, a reconfigured layout and a remodel of the store. Some stores may receive a store-in-store vape shop and branded fast-food franchise like Burger King or Subway.

It was a completely different strategy when EG America picked up almost 600 Cumberland Farms stores. It left those stores’ original branding intact, though they would benefit from EG America’s economy of scale.

The fact that massive rebranding wasn’t on the table for Cumberland Farms speaks to the strength of that acquisition. It is especially stark in comparison to the investments that EG America has made in some of its other tired brands.

 

Yesway & Allsup’s: When Rebranding’s Not Right

Not every convenience store acquisition requires a rebrand. When Yesway purchased Allsup’s, it said it intended to keep the Allsup’s brand intact.

“They are an incredibly well-run c-store chain,” Yesway Chairman and CEO Thomas Nicholas Trkla told Convenience Store News. Still, there were opportunities for improvement, including the addition of Yesway’s loyalty program.

Allsup’s may have lacked a loyalty card, but it didn’t lack loyalty. The Allsup’s Burrito is “iconic and almost reverential,” Trkla said. “It makes a lot of sense to us to sell Allsup’s fried food platform and its signature burrito in Yesway stores.”

Yesway’s hesitation to touch what’s working proves that rebranding in itself isn’t always the best strategy. Yesway, which entered the c-store category in 2015, didn’t have a well-established brand that made the risk of rebranding worth it. Instead, it chose to benefit from the acquisition by improving Yesway stores, too.  

Convenience store branding isn’t just for mergers—though the market has been crazy for them of late. Stores might benefit from looking at the message they send to customers through every interaction. Is the brand telling the right story? If not, then a convenience store branding exercise might be in order.

 

CB4 helps convenience retailers retain market share by using AI and machine learning to help store managers make their stores more shoppable. Watch this video to see how it works. 

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