Valero Energy Corp. (NYSE: VLO) opened San Antonio’s first Valero Corner Store today as part of its plan to convert the company’s Diamond Shamrock retail network to Valero, giving the company a national brand presence for the first time. The company invested nearly $2 million to construct this new-to-industry store, which is only the second retail store in the state to be converted to the distinctive teal-and-yellow Valero brand image.
To celebrate the grand opening and mark the company’s 25th anniversary, Valero is rolling back the price of its unleaded gasoline by 25 cents a gallon between 11 a.m. and 1 p.m. today at this new location. This store, which is located at 2902 SW Loop 410, near Palo Alto College and the new Toyota plant (off of 410 and Texas 16 South), is the first of more than 130 stores in San Antonio to be converted to the Valero brand. The majority of the San Antonio stores will be converted by next spring.
The Valero Corner Store in San Antonio is only the second to feature the new image. Earlier this month, the company opened its first Valero Corner Store in Corpus Christi and is poised to open three more new-to-industry stores this month.
Features of San Antonio’s First Valero Corner Store
San Antonio’s new 3,532-square-foot Valero Corner Store features the company’s new store design and signage, and offers a variety of popular food and drink items. The store has a large coffee/cappuccino bar and a state-of-the-art fountain drink dispenser where customers can choose from 16 soft drinks and add flavor shots.
This location also offers ICEEs in four different flavors and a variety of Grab It! And Go! food items including breakfast and lunch selections, as well as freshly-baked pastries, cookies and brownies. Additionally, it has a large fueling station with six multiple product dispensers, including diesel, that feature pay-at-the-pump technology.
Rolling out the Valero Brand Across the Country
When the national conversion of the 30-year-old Diamond Shamrock brand to Valero is complete, the company’s brand image will be featured on 2,900 U.S. retail and branded wholesale sites stretching from South Dakota to South Texas and from California to the Carolinas.
“We are very excited about having the Valero name on our retail and wholesale sites
across the country,” said Bill Greehey, Valero’s chairman and chief executive officer.
“With Valero’s growth in recent years, we’ve become one of the nation’s leading refiners and one of the top 25 companies among the Fortune 500, so it was a logical next step to roll out the Valero brand nationwide. And, the timing couldn’t be better since we’re planning to acquire Premcor Inc. later this year, making Valero the largest refiner in North America.
“There’s a significant value to having our name in front of customers, potential investors, community leaders, business partners and media on a daily basis. We also believe that we’ll capture synergies from supporting a single premier brand and realize greater benefits from our national advertising and sponsorships, like the Valero Texas Open.
“What’s more, we’re confident that the Valero brand will be as popular with our customers in the Mid-Continent as it has been on the West and East Coasts,” said Greehey, explaining that the company already has Valero stations on both coasts but
none in the Mid-Continent where the Diamond Shamrock brand currently exists. “We had a great response when we introduced the Valero brand in California in 2000 and again when we began branding wholesale locations throughout the East Coast a couple of years later.”
Valero will spend an incremental $70 million over the next two years to re-image its 1,030 retail locations and the 830 branded wholesale sites in the Mid-Continent area. The Valero brand is already in place at the company’s 380 sites on the West Coast and 660 sites on the East Coast. The vast majority of its locations will be re-imaged by the fourth quarter of 2006.
While Valero’s brand image has been updated to the teal-and-yellow color scheme and giant “V” logo, the company will continue to use the Corner Store brand name for its company-operated convenience stores.
The company will use the Valero brand at all of its premier branded wholesale sites, which meet certain image and volume requirements, and will continue to use its popular value brands – Shamrock and Beacon – for smaller sites that don’t meet the premier brand standards. Its 1,000 Canadian stores will continue to use the Ultramar brand name, which is recognized as a leader in the Eastern Ontario, Quebec and Atlantic provinces.
History of Valero’s Retail Network
Valero made its retail debut in June 2000 when the company acquired Exxon Mobil
Corporation’s Benicia, Calif., refinery. Included in the sale were 80 retail sites in the San Francisco Bay Area and 270 branded wholesale locations throughout California.
At the time, the company did not have a retail brand image so it conducted extensive research to develop the new Valero brand. Based on those results, the company chose the teal-and-yellow color scheme because it distinguished the stations from competitors and maintained consistency with Valero’s corporate brand image. The “V” insignia was adopted because it reinforced the Valero name and gave the brand a bold, unique and memorable icon.
“Our philosophy from day one was to look like a major brand, but price like an independent,” said Greehey. “Customers clearly responded to our clean and colorful image, as well as our marketing and pricing strategy because our volumes
immediately increased. It was and still is the right strategy.”
Valero’s acquisition of Ultramar Diamond Shamrock Corp. (UDS) in December 2001 expanded its retail and branded wholesale network significantly, as did the company’s wholesale expansion on the East Coast, bringing the total number of sites to approximately 4,700.
“Our teal-and-yellow Valero signs have gone up at wholesale stations stretching from Bangor, Maine, to Miami, Florida,” said Greehey. “The Valero brand has gotten a great reception everywhere we’ve introduced it because we have a strong image and quality offering.”
Conversion of Proprietary Credit Card
A dual-branded Diamond Shamrock/Valero credit card will be issued to all new cardholders in areas where the conversion is taking place. After a one-year transition period, a Valero-branded credit card will be sent to all cardholders in the markets being converted to Valero.
Customers interested in applying for the credit card can do so online by going to http://www.valero.com/Retail+Marketing/CreditCards/. Those who sign up between now and September 30, 2005 will save $.05 per gallon for three months when using their new credit card for fuel purchases.
About Valero
Valero Energy Corporation is a Fortune 500 company based in San Antonio, with approximately 20,000 employees and annual revenue of approximately $55 billion. The company owns and operates 14 refineries throughout the United States, Canada and the Caribbean. Valero's refineries have a combined throughput capacity of approximately 2.5 million barrels per day, which represents approximately 12 percent of the total U.S. refining capacity. Valero is also one of the nation's largest retail operators with more than 4,700 retail and branded wholesale outlets in the United States, Canada and the Caribbean under various brand names including Diamond Shamrock, Shamrock, Ultramar, Valero, and Beacon. Please visit www.valero.com for more information.