Introduction

Southern California is the land of great weather, beautiful palm trees, breaking waves, and traffic. Lots and lots of traffic. With all those cars on the road, SoCal is one of the country’s most competitive gasoline markets. Major Oil brands dominate the market, bringing their big budgets and heavy advertising but offering little profit growth potential to the gas station operator. One such operator has found an alternative, profitable solution.

Challenge

After 20 years operating gas stations and convenience stores in Southern California, Eddie Awada knew all too well that growth with the major oil brands was limiting – limiting to his gallon growth, and limiting to his margins. Awada operated four stations under both the 76 and Shell brands and made a good living, but not the return on his time and money that he felt was fair. He believed that he was simply not reaping the rewards that were rightfully his.

Awada decided he had to make a change if he was to reach his higher goals: greater traffic, higher gasoline sales, and more jingle in his pockets. As Awada contemplated making a change, he understood that there was always associated risk. Changing his stores from the major brands was an option he considered, but he was concerned that such a change might lose current customers before gaining new ones. His immediate solution was to remain with his biggest major brand, Shell, and experiment with one of his 76 branded locations, but with what brand; what image was best for his test store?

He found little in the way of alternative brands. Having already decided to leave one major oil brand, he found himself faced with choosing among the second-tier brands. But would those brands help him reach his goals?

Solution

Along his search, Awada weighed several brands and what they had to offer, or not. He learned that he could enjoy greater margins from buying more competitively at the rack. Still, he was faced with store branding that lacked the imagery he felt necessary to compete, particularly in the very image-driven environment of Southern California. Finally, Awada discovered VP Racing Fuels. “VP frees the operator from long term, choking gasoline contracts, allowing me to make great margins with unbranded gas, said Awada. “And the VP brand looks and feels premium all the way, appealing to my customers.”

Benefits

The Branded Retail program from VP Racing Fuels provided several benefits to boost Awada’s profit margins and improve his retail customer appeal. The most significant benefits VP brought were:

  • reimaging his gas station and c-store with the look and feel of a premium, lifestyle brand
  • much better margins at the pump from buying more competitively at the rack
    additional lines of premium products like race fuel, Madditive® additives, motor oil, apparel and more
  • supporting his sales with premium marketing and consultation, and
    more control of his business than he’s had in the past 20 years.

Result

Following his first store’s conversion to VP, Awada saw an immediate improvement in his business metrics, all heading in the right direction – up. Since rebranding to VP, that first location surpassed Awada’s goals, with increased traffic and growth in gasoline sales from 70,000 gallons per month to 220,000 gallons per month!

Soon after converting and seeing the results, Awada decided to convert one of his Shell-branded stations. Another significant jump in gallons was reached, from 60,000 gallons per month to 130,000 gallons per month. Awada was on a roll. So he did the natural thing, he converted a third store, and the results were as impressive as at the first two stores. And a fourth reimaging is in the works, bringing all of his locations under the VP Branded umbrella.

C-store sales have also seen a boost, with in-store sales up 100% across Awada’s locations. Part of this in-store success can be traced to the rejuvenation of the automotive section of the store with the addition of VP’s professional-grade consumer products and promotional products, including Madditive® fuel and oil additives, motor oils, and outdoor equipment fuels and lubricants, plus VP-branded gear. Another added boost is having the exclusive right to place a cage outside the building, where one can find VP Race Fuels, which attract a new customer and provide high-margin sales.

Awada gives a good deal of credit to VP’s consultation and marketing support, and lifestyle identity. He says he has never experienced such professional assistance and tips his hat to VP’s 45-year racing heritage and unique lifestyle cachet of his new stations.

The crowded gasoline station marketplace in Southern California hasn’t become less challenging for any operator, but Awada feels he now has the edge over others. “Competiton remains strong and plentiful, says Awada, “however, now I feel I’m the strongest.”

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