As the pandemic took hold, Parkland Corporation noticed an interesting shift in the company’s revenue stream.
Independent gasoline supplier and marketing company behind gas stations Fas Gas Plus among a number of other brands was seeing significantly more people stop by its On the Run convenience stores to buy basic groceries and other last minute groceries.
“It’s interesting if you look at the peak of the pandemic in 2020, convenience store sales skyrocketed,” Parkland President and CEO Bob Espey said.
“People were hesitant to enter conventional stores because of health concerns. What we’ve seen is people are rediscovering convenience stores as a way to do their replacement shopping.
For many years, the trend has been in the opposite direction, with fewer people using convenience stores for basics like milk and bread.
“But we’ve seen a migration to some of these convenience store staples,” Espey said.
He said two years into the pandemic, convenience store sales numbers aren’t declining and the trend, along with the growth of online grocery shopping, looks likely to continue. Convenience stores have proven resilient even during economic downturns like the one Alberta has experienced in recent years.
The increase in shoppers came at a good time as Parkland worked to increase its food options at its convenience stores while introducing its own line of foods under the 59th Street Food Co. label.
It is a name strongly associated with Red Deer. Jack and Joan Donald, who founded Parkland Industries and grew the business from a simple gas station to a major gasoline retail and wholesale business, opened the first location in Red Deer on the 59th street.
Parkland, now headquartered in Calgary, has also rolled out its Cargo brand, which covers non-food items such as windshield washer fluid.
“Part of our strategy is to have our own brands so we can choose markets and build brand equity around our consumer,” Espey said. “The advantage of having your own brand is that you have control. You can offer what the consumer wants.
It is also profitable. The profit margin on convenience store products is generally around 30%. But it’s about 50% for the 59th Street and Cargo lines. Owning its own brands also gives the company leverage when negotiating with suppliers.
Espey said Parkland’s business model is built on fuel and non-fuel pillars. Typically, profit margins on the sale of gasoline are 10 cents per liter or less, which for a company that markets more than 21 billion liters of petroleum products in its retail, wholesale and trade in Canada and the United States, is still a lot of money. .
But the tens of thousands of small convenience store purchases made each day are critical to the bottom line.
“To run a site, you have to have the non-fuel to run the economy. You can’t just be a fuel retailer,” he said.
“The next step in our evolution is to expand our food offering, both fresh and frozen.”
Parkland has partnered with Triple O’s burgers, which has restaurants adjacent to an On the Run convenience store, to give customers more options. On the frozen side, Parkland has partnered with M&M Food Market to offer some of their products.
In Alberta, these options are rolling out to major centers first, but will come to Red Deer locations in the future.
Parkland supplies and supports a network of approximately 2,000 retail gas stations across Canada operating under brands such as Ultramar Esso, Fas Gas Plus, Chevron, Pioneer and Race Trac. On the convenience side, there are On the Run and Marché Express. The company also operates in the United States and the Caribbean.
The company made more than $15 billion in fuel and petroleum product sales in the first nine months of 2021.