Yesway, which went public earlier this year, is known for its popular Allsup’s burritos. But diesel is another important, yet mostly unheralded, part of its business.
About 38% of the fuel sold in its stores is diesel, and that rises to 40% or more at new builds, said CEO Tom Trkla during the Goldman Sachs Global Consumer and Retail Conference last month.
“We actually have one of the highest percentages of diesel to total fuel of any c-store chain that's not Loves or Pilot,” he said.
Yesway has a significant presence in rural areas of West Texas and New Mexico, which Treasurer and Chief Financial Officer Ericka Ayles said have “quite a bit of truck traffic.” That made offering diesel at its stores a natural fit.
That decision has been paying off for Yesway.
“We're doing it because it makes more money,” said Trkla. “Our geography makes sense for it. But we've made a conscious effort to basically own the land, buy land next door, put in high-flow diesel lanes to take advantage of that opportunity.”
Diesel prices have been rising alongside the cost of other petroleum products. But while many people have adjusted their driving habits to reduce fuel consumption as prices have climbed, trucking companies still need to keep their rigs moving and can pass along the expense of higher diesel costs.
“That [passed-along cost] is diffused out through the economy, versus that direct relationship with the end consumer on the gasoline side,” Ayles said. “So we're seeing that certainly as a tailwind for us in particular in this environment.”
Impact beyond the pump
Yesway’s focus on diesel is also making money inside the store. Members of the company’s loyalty program who are professional drivers spend three times as much on food and other merchandise as members of the basic loyalty tier, said Ayles.
Yesway supports truck drivers by making sure items in its foodservice program are affordable, particularly the well-known burritos that its Allsup’s banner sells.
“We're already known as a value shop,” said Trkla. “So we also believe that that has a correlation in terms of our inside sales.”
The company wants to keep improving the experience at the pump. Ayles said Yesway analyzes how long it takes customers to complete a fuel transaction, and uses that data to fix slow pumps before they turn into a problem.
“It seems very simple and rudimentary, but I can tell you it's incredibly impactful, the speed of that transaction,” said Ayles.
Yesway also tapped Gravitate earlier this year to improve transparency and facilitate automated decisionmaking for fuel inventory and logistics.
Diesel is also a factor in Yesway’s plans to build 130 new stores over the next five years in Texas, New Mexico, Oklahoma and Arizona, where it recently opened its first c-store.
“We like a dense portfolio,” said Trkla. “It's much easier to supply fuel, to supply merch.”
