End of the Road Runner

Anvil falls on short-lived Valero brand; Corner Store name to grace new builds, remodels

Published in CSP Daily News

SAN ANTONIO -- Valero's stunning 5,500-square-foot Road Runner convenience store in western San Antonio opened early this year in the glare of flashbulbs. But unlike its namesake from the classic Warner Brothers' cartoon, in which the swift-footed roadrunner routinely outfoxed his devious coyote rival, this Road Runner had a short lifespan.

The store itself is doing fine--quite well, actually--but it has since changed its name to Corner Store, the brand that graces the more than 1,000 stores in Valero's direct-run network, according to Gary Arthur, president of Valero Retail [image-nocss] Holdings.

"It didn't make sense to us to have a second brand," Arthur told CSP Daily News. "Our first thought was that it was a differentiated offer, so does it deserve differentiated name?... But it just didn't seem to make sense from a strategic perspective or from a cost perspective, so we went back and said, 'Let's go with Corner Store'."

But the name itself isn't the only change. Valero has instituted a "differentiated look and feel" for the Corner Store logo. The new logo has been added to the former Road Runner site, as well as the 72 fueling stations acquired in May from supermarket retailer Albertsons LLC. Going forward, the newly updated Corner Store imaging will be applied to all corporate new builds and remodels.

Arthur estimated the Road Runner brand was replaced early into the second quarter of this year, a mere six weeks or so after the store's opening. Valero continues to see strong performance from the store, one-third of which is devoted to proprietary fresh-prepared foods such as sandwiches, roller-grill items, dispensed beverages and its signature kolachky, a flaky pastry of Czech origin.

Volume potential and merchandising flexibility have made the company confident that a larger-format store is ideal for locations near highways (or with highway access) and in developing neighborhoods with an excess of rooftops.

"We have built four more of those larger-sized stores, with two or three more in some form of construction," Arthur said. "They have those same attributes with the open ceilings, the larger restrooms--everything you saw at that store in San Antonio.

"These stores are being built in locations that can support the investment, drive significantly higher inside sales and can support the traffic a store of this size generates," he continued. "In the past, when we built a 3,500- or 4,500-square-foot store, if we had a good site, we would max out its potential pretty quickly. This allows us to continue to grow the business inside the footprint of that store and offer a wider variety of merchandise."

Arthur suggested the larger stores give customers more room to maneuver both inside and out, especially during peak times such as the morning drive and the lunch rush. With more square footage, however, comes a larger overall site footprint, meaning a significantly higher investment. Arthur estimated the company has had to buy "at least 50% larger" lots than it used to as a means of accommodating ingress/egress, extra parking spaces and other room for increased maneuverability.

While he couldn't share specific numbers regarding rates of return or similar benchmarks tied to the per-site investment, he did say the company has been "very pleased with the results we've seen so far" from the 5,500-square-foot store, which is nearly 2,000 square feet larger than its conventional Corner Stores.

"We will open five stores this year, with more scheduled for the early part of next year," he said. Beyond that, depending on the permitting and building process, the company has another five or six slotted to open in 2009.

Apart from expansion, the company plans to continue to look for ways to "value-engineer" its stores as a means of reducing costs, labor chief among them. It also will search out additional methods for offering customers greater variety and value for their money, such as the ever-growing list of products marketed under Valero's own Fresh Choices label.