Dive Brief:
- Fomento Económico Mexicano S.A.B. de C.V. (FEMSA), parent of Latin American c-store giant Oxxo, has begun rebranding the convenience stores it acquired last year from Delek US Holdings, a company spokesperson confirmed on Thursday to C-Store Dive.
- The spokesperson said that FEMSA is beginning the Delek-to-Oxxo rebrands in the Odessa and Midland areas of Texas, where Delek previously operated about 40 c-stores. During FEMSA’s earnings call on Thursday, Chairman and CEO José Antonio Fernández Carbajal said that the first rebrand was completed on Feb. 26.
- FEMSA’s leadership reiterated on Thursday — as it has over the past several months — that it intends to roll out Oxxo slowly in the U.S. In an email, the spokesperson added that FEMSA is in a “test-and-learn phase” and is refining its approach before expanding Oxxo to more markets.
Dive Insight:
Although the rebrands have officially begun, FEMSA CFO Martín Arias Yániz said on Thursday that the company still needs to “create the platform” on which Oxxco can operate its newly acquired 249 c-stores in the U.S. This means bringing capabilities over from its operations from Latin America, where it has over 20,000 convenience stores.
“We need to transfer the know-how so that it can get built and adjusted and adapted to U.S. needs and issues,” Yániz said.
Yániz emphasized that he’s been surprised by the number of opportunities FEMSA has to improve the operations at its newly acquired U.S. stores. He said that since Delek’s primary business was to sell gasoline, the company may have had a hard time focusing on running its retail operations.
“I think this is a challenge that all the big oil companies and refiners have had,” he said. “Managing retail is a very different business, and it's hard to run it just to push gasoline through.”
FEMSA will conduct “a series of experiments” over the next 18 to 24 months as it begins rolling out the Oxxo banner in the U.S., Yániz said. He did not share specifics of the experiments, only noting that they apply to standalone Oxxo stores as well as ones that offer gasoline.
“Those experiments will then provide us guidance as to where we should be focusing our organic growth,” he said. “The United States doesn't need more convenience stores — it needs better convenience stores, and we expect to be part of that solution.”
