The TRUTH about 7-Eleven/Citgo - decision made in 2005

[DisgustedTX]

http://www.csnews.com/csn/search/article_display.jsp?schema=&vnu_content_id=1002984682&WebLogicSession=RQmQOtB6TckvIQ2dl8Vjqd2oC9zB8SD1Yk3p4mVQzhM1sOO6ukHm%7C67918247378881542/168887091/6/7005/7005/7002/7002/7005/-1

DALLAS -- 7-Eleven Inc. is rolling out its own brand of gasoline in anticipation of the expiration next month of its 20-year contract with CITGO Petroleum Corp. CITGO recently announced that it is cutting 14 percent of its 13,000 service-station network across 10 states, including Texas where the c-store giant is headquartered, and selectively in four other states.

Tower Energy Group of Torrance, Calif., an independent petroleum wholesaler that distributes unbranded gasoline and diesel to stations in the Western United States, is currently supplying 25,000 barrels a day to about 800 7-Eleven stores -- both company-owned and franchised -- according to Tim Rogers, Tower's president and CEO.

Come September, that supply will increase by 95,000 barrels a day to approximately 2,500 7-Eleven stores. Forty-two percent, or 2,497 of 7-Eleven's 5,879 U.S. locations sell fuel, according to the 2006 Directory of Convenience Stores compiled by TradeDimensions.

"The agreement is very similar to what CITGO is supplying them. But rather than sell the CITGO brand, it will be the 7-Eleven brand, which is as strong a brand as any other," Rogers told Convenience Store News, adding that Tower has been 7-Eleven's supplier since 1992 in the U.S. Rocky Mountain West region.

Rogers declined to say what other c-store chains Tower currently supplies, but noted that the company is a 76 distributor in five Western states, the Exxon distributor for Arizona, and parent company of Tower Mart, a chain of 40 neighborhood grocery stores in Northern California.

Former 7-Eleven CEO Jim Keyes reported to shareholders in April 2005 that the chain was considering creating its own fuel brand. At that time, Keyes also told The Dallas Morning News that the company had been talking to independents and all the major oil companies, including ChevronTexaco Corp. 7-Eleven began a co-branding test with ChevronTexaco in June 2003 in Texas, California and Florida, with 11 7-Eleven stores selling Chevron gasoline and nine Chevron stores converting to the 7-Eleven format.

7-Eleven spokeswoman Margaret Chabris told Convenience Store News that the retailer is not ready to talk in-depth about its gas branding program until after the CITGO deal expires.

The main advantage of buying unbranded fuel is price. A company's ongoing costs will be lower with unbranded versus branded, said Tower's Rogers, in addition to the benefits of better service and the ability to control its own destiny.

For the most part, 7-Eleven's plans are being met with optimism among its licensees and franchisees. About 3,300 of the chain's more than 5,800 stores in North America are operated by franchisees, and approximately 430 are operated by licensees.

"I think it's a good decision. CITGO is a good brand, but it wasn't the best," said Ed Denario, a franchisee and U.S. senior vice president for 7-Eleven Franchisees in Long Island. "We (7-Eleven) have such a strong brand and a strong logo. We have the strongest brand in the convenience store industry. I think customers will accept it with no problem."

[wakeme2008]

1. Nice but

" The Dallas, Texas-based company said in a statement it disapproved of Chavez' comments, but a spokeswoman insisted politics were not part of the decision to end its 20-year agreement with Houston-based Citgo, a position supported by Venezuelan and Citgo officials."

http://abcnews.go.com/US/wireStory?id=2499364

I will not go back to 7-11... The can kiss Bush's ass all they want.

[DisgustedTX]

2. You missed the point - the DECISION was made in 2005

New CEO - Bush-bot "leadership" - decision not to renew happened last year. This is very convenient for 7-Eleven.