Company closing stations
Published 12:00 am Monday, February 7, 2000
First it’s closed, now it’s open.
Monday, February 07, 2000
First it’s closed, now it’s open. The community might notice more than one former Rich Oil station going through the same rebirth as the business at Third and Lorain streets in Ironton.
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Marathon Ashland Petroleum LLC officials are taking a hard look at each of their stations, including Rich Oil, Super America and Speedway to determine whether or not they are economically viable, said Rob Wood, Marathon manager of communications.
"I think the closed stations speak for themselves," Wood said. "The company is looking at every one of its sites in regards to their returns. If they are not earning satisfactory returns, they are being closed."
Some might not stay closed forever, though, Wood added. Like the Lorain Street station, private investors might scoop them up.
"The company is looking to see if the sites have a future in private hands or if there’s an advantage to the company in other respects, such as opening them as cigarette vendors only," he said.
The Rich Oil station on South Third and Lorain streets won’t be the last to undergo a metamorphosis, however.
"Typically what happens is people in an area say ‘I noticed the station is boarded up,’ and then another one in another part of town," Wood said. "It’s an ongoing process."
And the recent rise in gas prices did not help the situation, Wood added.
"I would have to say retail margins were pretty thin last year because we were chasing rising crude prices," he said. "Every year there is a look at a portfolio of stations. Some are lost, some refurbished and some get brand new, ground-breaking stations."
The Rich Oil station setup does not promote good business, either, which is another reason the stores are one of the first to close, said Chuck Rice, Marathon spokesperson.
"The Rich stations are the small cinder block buildings," he said. "They typically have two islands – one self-service, the other full service. Gasoline-only stations are kind of being replaced by convenience stores. People want more services when they stop to fill up. They want things like fast food, ATMs, all the different things you can buy and do in convenience stores."
The number of stations now owned by Marathon Ashland Petroleum LLC is another factor. When Marathon and Ashland Oil merged, Marathon ended up increasing its store count from 600 outlets to 2,400, Rice said.
"It’s purely a business decision," Rice said. "We have to look at each station and determine which ones are operating with a profit and which ones don’t."
Just because Marathon cuts a station loose, though, it does not mean the business is a failure, Rice added.
"The gasoline business is a good business," he said. "It’s competitive. And our expectations for the returns a store should have may be higher because we hold it against 2,400 others. But if any individual wanted to buy and operate a gasoline station, they would have a different level of return that they would need."
Interested buyers shouldn’t scope out the Marathon stations, however. They happen to be privately owned already and only buy their gasoline from the company, Rice said.
"There are company-owned and operated stations, like SuperAmerica, Speedway and Rich Oil, that have our employees and our assets, and there are other locations," Rice said. "There also are jobbers – individual business people in the gasoline station business choose which company they want to represent, like the Citgos, BPs, Marathons and Ashlands."
Eleven Rich Oil stations, including the one on Third and Lorain streets, and others throughout Scioto, Lawrence and Ross counties were purchased by one such jobber, Rice said.
"I think they are operating the one in Ironton underneath the name Buster’s," he said. "Some of the Rich stations are being closed strictly for economic reasons. Ironton was one of the Rich stations included in a package. They took ownership and they are operating it."