Saturday, December 18, 1999
UDF stores to sell Mobil gas
Brand part of expansion plan
BY CLIFF PEALE
The Cincinnati Enquirer
Consumers will find Mobil gasoline at most United Dairy Farmers stores starting next summer.
The Cincinnati convenience-store chain said Friday it had signed a deal with Exxon Mobil Corp., the world's largest oil and gas company, to sell the branded gas at 108 stores in Ohio and Northern Kentucky.
Workers should start converting the pumps and canopies to the Mobil brand starting in mid-2000.
UDF would not reveal financial details of the deal, but it will cover 108 of the 135 stores that sell gasoline. The others are too small or do not meet Mobil specifications, said Brian Gillan, chief operating officer and general counsel at UDF.
He said the deal was consistent with UDF's larger strategy of rapid expansion and brand identification.
“We want to compete with BP and Shell,” he said. “Mobil has not been in our marketing area until now. Here's an opportunity for Mobil to re-enter the Ohio market with a splash.”
The deal could be expanded as UDF builds more stores or expands existing locations. It has been adding about half a dozen stores per year, and hopes to add between 25 and 40 new stores within the next three years, Mr. Gillan said.
Overall, the chain operates 206 stores in Cincinnati, Northern Kentucky, Cleveland, Columbus and Dayton, Ohio.
Those expansions have built UDF up to about $300 million in annual sales. The company markets itself as more than a traditional conve nience chain because it sells its own brands of ice cream inside the stores.
Having a major gasoline brand will help the company compete with larger chains and draw more customers to its signature ice-cream products, including the UDF and Homemade brands, Mr. Gillan said.
“This just kind of rounds out our offering of quality products to consumers,” he said.
UDF is owned by the family of Robert Lindner, the brother of Cincinnati financier Carl Lindner.
For Mobil, the deal provides a chance to flood a new market with stores at one time.
“We believe ... UDF has the foundation, infrastructure, capital resources and growth strategies to position itself as the premier marketer in the state of Ohio,” said John Matthews, area sales and distribution manager.
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