Those who work in the C-store industry know the role adaptation plays in survival as well as anyone, and Tooley Oil Company, based in Sacramento, CA, understands the importance of changing with the times. Mick Tooley started the business in 1978, when automotive service was king, and oil companies partnered closely with their branded stations, contributing to their success by sharing expertise and providing logistical support. In those days, applied computerization was little more than a glimmer in the minds of a handful of industry visionaries.
How times have changed. Automotive service is performed by specialty shops that don’t pump gasoline. Soda coolers and dusty shelves scattered with gum and candy have been replaced by huge C-stores that compete for consumer dining dollars with quick service and fast casual restaurants. And technology…well, it’s become every bit the integral part of the business that fuel is.
Tooley Oil Company has managed to thrive through every dynamic, unpredictable market shift. Like many retail petroleum dealers, it is a family business, passed down and shared between generations. Mick Tooley’s son, David—who shares the duties of vice president with his brother, Michael—grew up working and managing in the stores during summertime when the full-time managers went on vacation. After graduating from college, neither he nor his brother immediately went to work for the company. Dave worked for Capital Beverage Company; Michael worked for Hilton Hotels.
“My father wanted us to get some perspective outside the business before we went to work for him,” Dave recounts. “It helped us get a fresh and flexible outlook on what it takes to be successful in business beyond the scope of the retail petroleum industry.”
Just because Tooley Oil is rooted in family, however, doesn’t make it a charming little throwback to a simpler time. As the Tooleys will be the first to tell you, traditional business values and progressive thinking are far from mutually exclusive.
First of all, Tooley Oil Company is anything but little. With ten stores in the greater Sacramento area and one in Reno, Nevada—seven of these built from the ground up—this is a major enterprise with a high profile in a competitive market.
David joined the business in 1993, when Tooley Oil numbered six sites and he and his father comprised the entire executive team. “We oversaw the complete enterprise with the help of our site managers,” he says. “Three years later, my brother came on board to help.”
Organizational and operational change in anticipation of the industry’s continued reinvention has been a constant in David’s history with the company. When he joined the mid-90’s Tooley Oil was already changing: from being a combination of branded and non-branded stores to being completely branded, getting out in front of what they perceived to be the long term challenges of doing non-branded business in the California market.
“Branded stores had a number of advantages that were just too attractive to overlook,” explains David. “The largest was access to the oil company credit card network branded stores enjoyed. In addition, the supply of fuel product to branded stores tended to be more reliable.”
In the years since then, Tooley Oil’s contemporary approach has been marked by the way it has tackled growth. Expansion is not only a matter of adding more C-stores, but pursuing and capturing parts of the industry that were once handled by the oil companies.
For example, in 2007 the Tooleys decided to expand their reach by becoming petroleum wholesalers in addition to being retailers. They have seen a lot of growth in the jobber area, which has the additional benefit of ensuring the most efficient model for delivering gasoline to their own sites.
“We got into wholesale because it was the direction our oil company decided to take,” says David. “They moved from selling direct to retail sites to selling to wholesalers, and it seemed like we needed to get out in front of the trend by accepting the role of jobber; the middleman.”
The enterprise, which is currently branded as both Shell and Circle K, also functions as a regional service provider with its own network of “dealers,” retailers who need the resources and support of a larger corporate enterprise—including the recognizable branding of a Shell or Circle K—that are no longer delivered by the oil company.
“Instead of running from the profound market change that occurred when the petroleum companies changed their business model, the Tooleys looked for opportunity in the parts of the business the oil companies were no longer interested in,” says SSCS Vice President of Sales and Marketing Al Stoeberl. “They took ownership over them and became a rounded enterprise that’s the very definition of a modern petroleum retailer, that is to say, they aren’t just a petroleum retailer anymore. The upside for them is great. When they do a good job, they exponentially gain market share in the retail sector, thanks to their network, and gain inroads into a separate but related channel, wholesale petroleum.”
As a regional service provider, Tooley Oil facilitates the fuel part of the business to its dealers on behalf of Shell and manages the C-store part of the business in partnership with Circle K. Both of these large franchisors have their own set of performance expectations, and Tooley Oil’s ability to meet them depends on several basic, but important strategies.
“When looking at potential stores to add to our network, we look for those that have a lot of promise, but are underperforming for one reason or another,” David explains. “Sometimes we locate a distressed property that we can reshape to meet our own qualifications.
“Something else we factor in when looking for a location is space, and plenty of it, because to succeed today you need fresh food, deli, and food service—offerings that you didn’t think of five or ten years ago. To accommodate those programs, you need a lot of real estate.”
The Tooleys’ successful adaptation to the current market likewise incorporates an emphasis on and commitment to customer service. “We make the effort to present our stores as upscale and strive to achieve the high levels of customer service that support that,” David explains. “Sometimes it’s the little things that make a difference, like remodeling our bathrooms and ensuring they are always clean. Sometimes it’s the bigger things, like having the best staff available. Our employees help set us apart in the marketplace.
“That makes us very selective about the people we hire. We want people with a tremendous amount of industry experience, but who aren’t afraid to think out of the box. We value them because they are hard to find and do everything we can to create an atmosphere that makes them want to stay. I’m happy to say we’ve managed to keep our turnover low.”
Another constant in the company’s success is the use of SSCS technology, which the business first installed in 2003. Not surprisingly, one of the reasons David favors SSCS’s Computerized Daily Book back office system and related software is its ability to evolve along with the times.
“I feel that as our company has grown, SSCS has grown,” David states. “They have done an excellent job of adapting their technology to a marketplace which is constantly being reshaped, including the ability to handle mix and match and food service. My managers comb over the information they get out of the back office to see how we’re doing and what we need to adjust before it becomes a problem. Our pricing manager depends on Central Price Book to maintain control over pricing throughout our dealer network. Bottom line: we depend on SSCS software to run our business. It’s a great selling point when we recruit dealers for our network.”
One of the latest keys to success in the retail petroleum industry is the management and evaluation of Big Data as it relates to the business. The newest addition to SSCS’s solution set, Transaction Analysis, gives users the ability to leverage the transaction level data generated by a variety of point-of-sale systems from different manufacturers. Tooley Oil Company embraces the technology wholeheartedly.
“We use Transaction Analysis daily,” David says. “It gives us the kind of data access that we’ve known we’ve needed and it’s already proving to be invaluable—all my managers access it to see what’s going on in their stores. I think the possibilities for its use are practically endless.”
Tooley’s price book manager uses Transaction Analysis’ Price Overrides report to find potential problems with the enterprise’s price book entries. “She’s gotten so used to using it that she can tell, just by the numbers and percentages it spits out, whether we have a problem in the price book worth investigating,” he adds.
Store managers use Transaction Analysis to locate excessive voids and no sales so they can take appropriate action when necessary. “You could always find how many voids and no sales you had,” David says, “but Transaction Analysis takes investigation of questionable results to a whole other level by allowing us to call up an actual display of the original time-stamped receipt. The receipt display is also helpful in allowing us to identify what items get sold with what other items. It’s the closest to market basket analysis that we’ve ever gotten, and it helps us accurately identify deals based on what people are actually buying together.”
Tooley Oil Company’s open embrace of change serves as a model to operators who may be put off or discouraged by the rapid evolution of the retail petroleum industry and the unexpected impact it may have on their stores.
“Success in the market means staying in touch with the market,” David says. “If you fall asleep, you’ll miss the changes taking place around you and get passed by. You have to get out ahead of the trends so you can prepare for them the right way. If we’ve managed to do well as a company, it’s because we’ve been able to do this well and have surrounded ourselves with people in our organization who also do it well. It makes work a rewarding experience for our family and the professionals that work for our company.”