Canadian Convenience Store Chain Expanding ‘On the Run’ Internationally: Interview

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Parkland Corporation, an independent supplier and marketer of fuel and petroleum products and a leading convenience store operator, has acquired the licence for the exclusive use of the On the Run trademark in the majority of U.S. states.

And the company said the acquisition positions Parkland to expand On the Run across the U.S. to create a unified, North American convenience store brand.

Through this acquisition, Parkland has acquired, for a one-time fee, the perpetual licence for the exclusive use of the On the Run trademark in the majority of U.S. states. The deal includes an option to purchase the On the Run U.S. trademark together with the licence owner’s On the Run franchise business.

“We are excited to expand the On the Run convenience store brand across the U.S. and harness the advantages of our scale,” said Ian White, Senior Vice President, Strategic Marketing & Innovation at Parkland. “As we continue to advance our ambitious growth strategy, the time is right to create a unified, North American retail and convenience store brand. On the Run is an established retail brand that we can quickly and efficiently scale by leveraging the capabilities we have established in the Canadian market.”

Parkland has been building the On the Run convenience retail brand since 2016 across Canada. The company has between 1,800 and 1,900 gas station locations across Canada and there are about 300 On the Run stores. The concept has been successful for the company, winning the trust of customers and giving Parkland the opportunity to develop and expand its own product lines.

ON THE RUN

This has also given the company a really solid platform for growth in Canada and now across the U.S. Over the last few years, Parkland has acquired eight companies in the U.S. Now Parkland can start to harmonize its convenience and store offering across Canada and the U.S. and leverage many of the efficiencies and benefits of scale with an opportunity to build a super brand across North America while bringing in many of its own product brands.

“We were fortunate enough to acquire the rights to the On the Run brand and the associated franchise model and franchisee complement as part of the divestiture Imperial Oil made of their downstream assets,” said White. “So we acquired the exclusive right trademark. Since then, we’ve re-imagined, and re-imaged On the Run. We did a lot of consumer research. We heard from consumers where there were three important elements that we needed to address with the existing On the Run offer and brand image.

“One was that it was dated and it needed to be refreshed. So we had a look at the elements of the design elements of the logo and the interior and with the feedback from our consumers made some adjustments there. Two was the offer as well needed to be adjusted as folks started to shift towards more good for you food. Folks wanted additional branded options as well. Since then we partnered with a number of branded food partners. We’ve branded exclusively with a company called Triple O’s and we’ll be expanding the Triple O’s concept into Alberta. We recently launched a new branded food partnership with them in Calgary. It’s done very well. And we’ll be moving into Ontario in 2021.

“The other component was around the offer in general in terms of connecting the forecourt and the backcourt so the Canadian store with the gas facility. Our offer in Canada and the U.S. as well is having a strong reasonably relevant brand in our gas plants in the forecourt and what we’ve done is now with the On the Run purchase both in Canada and the U.S. we’ve allowed ourselves a consistent backcourt image offer that we can progress and scale and connect to our proprietary forecourts.”

White said Parkland’s goal is to grow its proprietary brand portfolio, exclusive to the company, while continuing to partner in markets as appropriate with major oil companies in supporting their brands.

“The On the Run business and offer now at a North American level will be exclusive to Parkland and will allow us to continue to build up that capability and continue to evolve the offer in real time as consumers sort of direct us,” said White.

In Canada, the company has plans for 1,000 On the Run locations. In the last three to four years, it has introduced 80 to 100 stores per year.

In the U.S., Parkland has a dealer-operated gas station business and a company-operated business. On the company side, it has close to 60 locations. The dealer operated is just under 300.

The company’s plan includes:

  • Expanding On the Run across the U.S. to create a unified North American convenience brand;

  • Capturing efficiencies through common brand collateral, product assortments, private label product ranges and operational continuity;

  • Opportunity to rebrand its existing U.S. convenience stores and efficiently incorporate the On the Run convenience brand to newly developed sites;

  • Greater optionality and a strong convenience store foundation for future U.S. M&A activities; and

  • Support the organic growth of its dealer business by providing an enhanced, bundled offer that combines a leading convenience store brand with multiple forecourt fuel brands.

“The On the Run retail brand provides a solid platform for our continued U.S. growth,” said Doug Haugh, President, Parkland USA. “Building on our existing On the Run brand image, product assortments and private label goods in Canada, we look forward to meeting the convenience needs of our U.S. customers under the On the Run banner. Our U.S. customers will enjoy enhanced interior and exterior rebranding elements, larger and brighter canopies and a variety of new product offerings, all backed by their same local and friendly service teams.”

In Canada, Parkland has several key gas brands - exclusive rights to the Chevron brand in Alberta and B.C., Fas Gas across the West; Pioneer in Ontario; and Ultramar in Ontario and east of Ontario.

The company also has a strategic partnership with Imperial Oil for the Esso brand - both company and dealer operated locations.

More than 80 per cent of Canadians live within 15 minutes of one of the company’s locations. In the company’s last quarterly results, Parkland posted its 18th consecutive quarter of same store sales growth.

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