Speedway, a convenience store chain headquartered in Enon, already operates about 2,740 convenience stores in 21 states. The chain primarily operates in the Midwest and East Coast. But company officials said Tuesday that the proposed merger with Andeavor will allow the chain to add about 1,100 additional stores and become a national brand.
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The merger would mean Speedway would operate about 4,000 company-owned stores and provide Marathon with access to thousands of additional independently-owned locations in the U.S. under various brands. Speedway has about 1,350 employees in Clark County and 33,820 workers nationally.
The merger would provide several benefits for Marathon’s retail operations, including the opportunity to expand the chain’s Speedy Rewards loyalty program across the U.S. It is also expected to provide cost-savings from more efficient operations.
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Company officials have declined to say whether the additional stores will lead to any new employment at Speedway’s Clark County headquarters.
“For company-owned stores, we plan to leverage Speedway’s fully integrated home office, back office and point-of-sale platforms to drive earnings growth,” said Gary Heminger, Marathon’s chairman and CEO in a conference call with investors Tuesday. “We see potential for significant synergies and economies of scale throughout our entire retail network which becomes nationwide in scope.”
DETAILS: Marathon nearly triples earnings to $3.4B, Speedway earns $732M
Just a few years ago, Speedway roughly doubled in size after acquiring the Hess retail chain on the East Coast for $2.8 billion. Heminger said that deal provided $210 million in savings for the company last year, more than the $190 million that had been expected.
On Tuesday, company officials said Speedway contributed $95 million in earnings for the first quarter this year, down from $135 million compared to the same quarter last year. The company attributed lower revenue to increased operating expenses, bad weather and depreciation from technology investments.
Marathon’s refining and marketing segment reported a loss of $133 million, compared to a loss of about $70 million at the same time last year. Marathon’s logistics and transportation segment provided the biggest boost to the company for the quarter, reporting $567 million in operating income compared to $309 million in the first quarter last year.
The Springfield News-Sun has provided award-winning coverage of Speedway’s growth and its impact on the region. For this story, the paper reported on parent-company Marathon’s latest earnings report and comments from company officials on the expected impact from a recent merger.
By the numbers:
$37 million — Marathon’s reported 2018 Q1 earnings
$30 million — Marathon’s reported 2017 Q1 earnings
4,000 — Estimated Speedway-branded stores across the U.S. after merger
$95 million — income reported from Speedway
Source: Marathon Petroleum Company
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