By combining the rich experience of Shell Oil with family-owned ingenuity, truenorth convenience stores is poised for a breakout year.
By: John Lofstock.
There aren’t too many 93-year-old oil companies that have enjoyed decades of success, but have managed to keep a low profile. But the winds of change are blowing at Truenorth Energy LLC as the company plans to expand its operations across the Midwest making it one of the top convenience store Chains to Watch in 2013.
truenorth, a 50-50 joint venture between Shell Oil Co. and Truenorth Holdings, formerly The Lyden Co., has become one of the largest Shell Oil marketers in the country. While this Ohio chain has flown under the radar, there is a palpable excitement brewing across it’s more than 300-store network.
Whether it’s the new state-of-the-art headquarters in Brecksville, Ohio, or its resplendent convenience store design, truenorth stands apart as the one top quartile chain you are likely not familiar with.
That promises to all change over the next year as the chain is upping its ante in the convenience store and petroleum business. It has the muscle and the financial resources to grow organically and through acquisitions, if the right one should present itself, not to mention the leadership and retail experience to take the industry by storm.
Currently, of truenorth’s 320 stores, 107 are company-operated with the rest run by dealers in four states. Its core markets of operation include Cleveland, Columbus, Dayton, Toledo and Youngstown in Ohio, combined with Chicago and Detroit.
The company is anticipating aggressive growth across all of these markets—both in company-operated sites and the addition of new dealer-operated units—over the next 3-5 years.
“This is an exciting time for our business,” said Mark Lyden, president of truenorth. “My grandfather started this business in 1919 with Amoco and it grew steadily as the family business. Today, with both the 3rd and 4th generations of Lyden’s working in the business, we are preparing a period of unprecedented company growth across all of our markets of operation.”
Growing the Business
From a family-owned bulk fuel delivery business, Lyden Oil grew to 120 filling stations in 50 years, selling 62 million gallons of gas per year by 1969. In 1982, Lyden opened its first convenience store called Fast Check Food Mart. Through the evolving offer, from bulk fuel to filling stations to convenience stores to tomorrow’s evolving offering, two things have been embedded in the culture of the organization…control and quality.
In 1999, after an 80-year relationship with Amoco, The Lyden Co. entered into a partnership with Shell to form Truenorth Energy—a move necessitated by BP’s acquisition of Amoco. “Following that merger, we had to find some place else to go and Shell stepped up,” Lyden said.
Today, truenorth sells more than 400 million gallons of fuel annually through its network of company and dealer operated Shell branded fueling units, with a focus in the coming years on expanding both fuel and ancillary revenue sales through extensive capital deployment and dealer support programs.
Since the inception of the joint venture, where both members contributed assets, the company has been a growth through acquisition company, purchasing over 120 additional properties in Chicago and Columbus, while picking up supply contracts in Detroit.
“One of the challenges with the acquisition assets was that the facilities were not always updated. As we continually evaluated the portfolio we knew we had some tremendous properties, but the retail offering was lacking,” Lyden said.
We are focusing on upgrading the facilities to meet the evolving customer expectations, while enhancing the overall offer at existing sites. We believe opening a new or rebuilt facility every 30-45 days is achievable and will help to build greater equity in the brand, said Ryan Howard, truenorth’s chief operating officer, who spent several years working on the Shell side of the business before joining truenorth.
Elegant Retail Design
The truenorth brand, with its whimsical green and yellow design melds magnificently with Shell’s iconic yellow and red retail image. truenorth is all about being fast, friendly and clean. As the chain aims to serve its customers in new, modern convenience stores, it is continually adapting its offer. Our brands are targeting consumers seeking an inviting and enhanced overall shopping experience, compared to competing purely on price, said Howard.
What is so special about truenorth’s retail design is that it withstands the test of time. The chain hasn’t done a complete redesign in years, but tweaks the design constantly, Lyden said.
“We’ve increased the number of cooler doors to 20, installed beer caves and designed stores to pinpoint the four corners with our signature items—coffee, the cold vault, the front counter and the restrooms. It helps pull customers through the store,” Lyden said.
The most recent store which opened in August included LED lighting throughout the interior and exterior of the store, car wash, forecourt, and signage. The exposed ductwork and high ceilings continue to be part of the signature package.
The color palette also conveys a sense of cleanliness with a softer earth tone in the cabinets and brown and black on the countertops. The company has opted for higher gondolas about five-feet high, added more SKUs, increased its foodservice offering and upped the number of cooler doors to drive more business into the cold vault.
The chain also helps certain areas stand out by using signs and graphics, from the beer cave, which it calls its “North Pole,” to its grab-and-go section and hot beverage options.
“You don’t have to look around and say, ‘Where’s the coffee?’ because it’s going to stick out—it’s going to say ‘True Brew,’ which is what we call our coffee signature item, and it’s going to drive you right to the coffee,” Lyden noted.
During this latest round of upgrades, the chain is committed to making additional tweaks, according to Lindsay Lyden, truenorth’s general manager of marketing. The newer design calls for units to measure up to 4,000 square feet. Upscale restrooms will be moved up to the front corner of the store with additional stalls for women, and expanded center-store space will be dedicated to the grab-and-go foodservice program the company currently offers through partnerships with Landshire and Jimmy Dean.
“We are very interested in expanding our foodservice program. The challenge we are facing is to develop consistent foodservice branding so that customers know what to expect from store-to-store,” Howard said. “We are still in the discovery process: examining our customer base, the competition that exists in our markets from QSRs and other convenience store chains, and general trends in the foodservice industry, such as cooking equipment, demand, etc.”
This is no easy task. Competitors across all retail channels are looking to upgrade their image and make that big splash that says, ‘we are in the foodservice business.’ “Despite the pressures, this is not a step that can be taken lightly or rolled out overnight,” Howard said. “It requires a commitment from everyone in the organization and a pretty big financial investment, so it has to be done smartly to minimize the risk.”
Growing Dealer Operations
“While the truenorth brand will remain exclusively a company-operated network, truenorth is committed to providing our dealers the tools necessary to compete in a highly developed retail envi
ronment,” Lyden said. “As we enter this next phase we are positioned to bring new tools to our dealer organization.”
“Part of our value proposition for dealers is helping them protect the real estate by giving them the tools to be a better retailer,” Lyden said.
The company does not extend or guarantee credit for dealers, but it has the leverage to finance equipment and dispenser upgrades that can be paid back monthly. “This is a win-win for the dealers because smaller operators need the right tools to compete, but can’t always finance it,” Lyden said. “By leveraging the Shell brand we are able to extend our dealer partners an opportunity they might not be able to afford otherwise.”
The dealer value proposition offered by truenorth also includes participation in a vast loyalty program through Shell’s Fuel Reward Network (FRN). “You cannot underestimate the value of a loyalty program in the Midwest,” Howard said. “There are some great chains here that have very popular rewards programs. The Shell program is expected to be as strong as all of them and it will continue to grow and attract new customers to constantly strengthen the brand and draw people into the convenience store.”
“Whether you are in a company-owned or dealer site, we aim to always provide a quality shopping experience for our customers and that will never change.”
At a Glance: True North Energy
After an 80-year relationship with Amoco, The Lyden Co. entered into a partnership with Shell to form True North Energy LLC. Today, truenorth operates or supplies over 320 stations, selling in excess of 400 million gallons of gas per year.
Company-Operated Stores: 107
Foodservice Brands: True Oasis, True Brew, Grab ‘n’ Go
Fuel Brand: Shell
Top Promotion: truenorth Scrub Club—customers get one free car wash for every five purchased.
W.G. Lyden III, CEO
Mark Lyden, President
John Guzdanski, Chief Financial Officer
Keith McIntyre, Vice President, Dealers
Mary Lyden, Chief Information Officer
Ryan Howard, Chief Operating Officer
Mickey Conway, Vice President, Trucking
Char Salmons, General Manager, Retail Operations
Lindsay Lyden, General Manager, Marketing
Bailey Lyden, General Manager, Merchandising