Speedway LLC

Speedway LLC

Type	Subsidiary
Industry	Retail (convenience stores)
Founded	1959
Headquarters	Enon, Ohio, U.S.
Number of locations	2822
Key people	Tony Kenney, President
Revenue	$16,932 million (2014)[1]
Number of employees	Unknown
Parent	Marathon Petroleum
Website	www.speedway.com

Smaller Speedway store, converted from Total when Speedway purchased some of their former locations

Typical Speedway store in Bath Township, Michigan

Larger Speedway store, in Bath Township, Michigan

Speedway front counter and cigarette display in Hobart, Indiana

Speedway LLC is the operator of a chain of combination gas stations and convenience stores in the Midwestern United States operating under its namesake brand and along the East Coast of the United States. Speedway LLC is a wholly owned subsidiary of the Marathon Petroleum Corporation and is the largest chain in central Ohio.^[2] Speedway LLC is headquartered in Enon, Ohio.

History

Speedway started as Speedway 79, the name of a gasoline chain based in Michigan for much of the first half of the 20th century. In 1959, Marathon, then known as the Ohio Oil Company, purchased the chain and promptly converted its outlets to the Marathon brand.

As self-service gasoline became legalized in many states, Marathon decided to use "Speedway" (without the "79") at higher-volume self-service stations with convenience stores. The concept turned out to be one of the few bright spots for Marathon during this time, and the company quickly expanded this concept across Marathon's main territories across the Midwest and Southeastern United States. Part of this expansion was through the acquisition of various other smaller regional gasoline station chains, including GasAmerica, Starvin' Marvin, Gastown, Wake Up, Bonded, United, Cheker, Port, Ecol, and Value. These stations were converted to the Speedway branding.

In 1997, Marathon and Ashland Petroleum formed Marathon Ashland Petroleum LLC (MAP), a joint venture which combining the companies' refining, marketing, and transportation businesses, with Marathon owning 62% of the operations while Ashland owned 38%. In the process, Ashland's SuperAmerica and Marathon's Speedway convenience store chains were merged to form Speedway SuperAmerica LLC, a wholly owned subsidiary of MAP. At this time, Marathon acquired the rights to the Solo, Save Mart, Save More, and Rich brands from Ashland, along with others. Many of these brands would be converted to the Speedway brand over time. When the merger was completed in 1998, the Speedway and SuperAmerica brands began to market together.

In 2005, Marathon purchased Ashland's share of Marathon Ashland Petroleum, which became Marathon Petroleum Company LLC, retaining the SuperAmerica and Rich brands that were originally owned by Ashland. At this time the locations outside the Upper Midwest were converted to "Speedway" and the "SuperAmerica" brand was restricted to that market. Marathon sold SuperAmerica to Northern Tier Energy, a newly formed company backed by the private equity firms ACON Investments and TPG Capital, in February 2011. It is based in Woodbury, Minnesota. Today Speedway and SuperAmerica are unrelated chains. Following the separation of Marathon's upstream and downstream operations in 2011, Speedway remained a part of Marathon's downstream operations.

In 2001, Speedway's truck stop chain was merged into the Pilot Travel Centers brand after Marathon and Pilot Corporation entered into a partnership to form Pilot Travel Centers. Pilot has since bought out Marathon's interest in Pilot Travel Centers, now Pilot Flying J. Following its merger with Hess Corporation's retail chain in 2014, six WilcoHess locations in Virginia were rebranded as Pilot locations and jointly operated between Pilot Flying J and Speedway.^[3]

The Speedway brand is used in Illinois, Indiana, Kentucky, Michigan, Ohio, West Virginia, and Wisconsin, while the Hess brand is used in Alabama, Connecticut, Delaware, Florida, Georgia, Maryland, Massachusetts, New Hampshire, New Jersey, New York, North Carolina, Rhode Island, South Carolina, and Virginia. Both brands operate in Pennsylvania and Tennessee. The Hess and WilcoHess brands will be converted to Speedway by 2017,^[4] a process that was half-completed by August 2015.^[5]

2012–14 expansion

Acquisition of GasAmerica

On February 13, 2012, it was announced that a deal had been reached with Indiana and Ohio convenience store chain GasAmerica to acquire all 88 of its locations.^[6] As part of the purchase agreement, Speedway will also acquire all trademarks, trade dress and intellectual property from GasAmerica.^[7] The deal also includes several parcels of undeveloped real estate for future development. The transaction was finalized on May 29, 2012, for an unspecified price.^[8]

Purchase of Road Ranger stores

On June 5, 2012, it was reported that Speedway, LLC signed a deal with the convenience store chain Road Ranger. The deal gave Speedway nine Road Ranger stores in Kentucky, and one in Ohio, in exchange for cash and a truck stop in the Chicago metropolitan area.^[9] Rockford, IL-based Road Ranger operates approximately 80 truck stop and gasoline convenience store locations in seven Midwestern states. Like Speedway before it, Road Ranger has a partnership with Pilot Flying J.

Entry into Pennsylvania and Tennessee

In 2012, Speedway announced a planned organic expansion into Pennsylvania and Tennessee. While expansion into Tennessee has focused on the Grand Division of Middle Tennessee,^[10] it also confirmed an expansion into Western Pennsylvania, including Pittsburgh.^[11] In both cases, Speedway has had a presence before: the Tennessee stations were included in the 2003 sale of Speedway's Southeastern presence to Sunoco when Speedway exited the Southeastern United States, while Speedway had a brief presence in Pittsburgh in the early 2000s when the SuperAmerica stations in the area were converted over to Speedway; those stations have either since switched over to standard Marathon stations or have been sold off to competitors such as GetGo. The return of Speedway in Western Pennsylvania also coincided with Marathon taking over the retail contracts of several Exxon-branded stations in the central Appalachia and greatly expanding its presence in the Pittsburgh metropolitan area, where Marathon's former parent company U.S. Steel is based.^[12] ExxonMobil would subsequently offset its Pittsburgh losses by taking over several Shell-branded stations in the area and convert them to the Exxon brand.

Acquisition of Hess Retail

In May 2014, Speedway announced they would purchase Hess Corporation's retail business for $2.6 billion. Hess has 1,342 locations along the Eastern United States.^[4] The conversion from Hess branding to Speedway branding took place over the course of 2015.

Commitment to alternative fuels

In January 2014, Speedway president Tony Kenney publicly announced that Speedway is committed to adding alternative fuels at its stations, focusing specifically on E85 Ethanol and Compressed Natural Gas (CNG). In an interview with Fuels Forward blog, Kenney said "E85 to me is a good answer".^[13] "The automobile manufacturers are making flex-fuel vehicles that run on E85, it doesn't void manufacturer warranties; it's been proven effective for a number of years. I think it's a viable alternative in terms of adding renewable fuels into the supply chain." Kenney has also expressed concern for making available E15, a blend of 15% ethanol and 85% gasoline, at Speedway stores. E15 is only approved by the EPA for use in 2000 vehicle models and newer, and some unanswered questions remain in regards to retailer liability.

As of March 20, 2015, 15.5% of Speedway stores carry E85 Ethanol.^[14] Speedway currently has 246 stores with E85 available, and one store which carries CNG. Almost all of its stores in Pittsburgh offer E85, greatly expanding the availability of the fuel in the market.

Speedy Cafe

In select stores, Speedway has debuted the "Speedy Cafe" concept, which allows customers to choose specialty foods and beverages on a touchscreen computer. These items are prepared while the customer takes the receipt to the cashier, and pays for their purchase as they would any other purchase at Speedway.

References

External links

• Speedway's Official Web Site
• Marathon's Official Web Site
• Marathon Petroleum's Official Web Site
• Speedy Rewards