TA Plans New Loyalty Program to Unite Minit Mart Sites

WESTLAKE, Ohio -- TravelCenters of America (TA) will recommit to a loyalty program to help unite the numerous convenience stores it has purchased during recent years.

In its recent fourth-quarter earnings call, the travel-plaza retailer made public its plan to launch a new loyalty program for its Minit Mart c-stores.

TA’s new CEO, Andrew Rebholz, leading the call for the first time, framed the new loyalty program as a way to make stores acquired in 2015 and 2016 more competitive and profitable. “As a group, the results to date have been disappointing,” Rebholz said of the stores acquired during this time.

Rebholz, one of CSP'sPower 20 Change Makers, said that the old loyalty programs in use at the acquired sites in question were canceled at the time of acquisition and not replaced. TA now aims to fill the gap left by the lack of a loyalty program.

Here is more information from the chain's fourth-quarter earnings ...

"TA's net (loss) income (down $20.5 million) and EBITDA (down $6.6 million) results for both the fourth quarter and full year of 2017 were impacted by a number of items that affect comparability with prior year amounts and I believe distract from the successes TA achieved in our operations in the 2017 fourth quarter,” said Rebholz.

Some of the successes that Rebholz laid out during the call:

• Nonfuel revenues in TA’s travel-center segment grew by 2.7% in the fourth quarter of 2017 vs. fourth-quarter 2016 as its nonfuel efforts continued to improve, especially in the truck service area. In the 2017 fourth quarter, compared to the same time the previous year, TA realized improvements of 6.8% in tire unit sales, 50.6% in RoadSquad OnSite mobile maintenance work orders, 6.1% in RoadSquad roadside assistance work orders and 20.1% in Reserve-It! parking reservations revenue.
• Site level gross margin in excess of site-level operating expenses in TA’s convenience-store segment grew by 2.7% over the prior year quarter (1.9 % on a same site basis).
• The cost reduction initiatives TA began in the first half of 2017 resulted in approximately $4.6 million of savings in the 2017 fourth quarter. Many of these cost reductions were implemented during the second and third quarters of 2017, and Rebholz said he expects some incremental savings in 2018 from 2017 levels, primarily in the first and second quarters of 2018.

Fuel sales volume in TA's travel-center business decreased by 4.2 million gallons, or 0.9%, and same-site fuel sales volume decreased by 8.7 million gallons, or 1.9%, for the 2017 fourth quarter compared to the 2016 fourth quarter. TA believes these decreases were primarily due to increased competition.

Fuel revenues increased $151.5 million, or 18.6%, in the 2017 fourth quarter as compared to the 2016 fourth quarter primarily due to higher market prices for fuel and from sites acquired and developed since the beginning of the 2016 fourth quarter. Fuel gross margin decreased by $4.3 million, or 4.9%, to $83.6 million primarily as a result of the federal biodiesel fuel tax credit program that was in place in 2016 but not in 2017.

Nonfuel revenues increased $10.3 million, or 2.7%, in the 2017 fourth quarter compared to the 2016 fourth quarter primarily due to sites acquired and developed since the beginning of the 2016 fourth quarter and a $4.8 million, or 1.2%, increase due to same sites; the same-site increase was lowered by reduced restaurant revenues while TA was converting certain locations from full-service restaurants to QSRs and the effects of closing certain restaurants during slower nighttime periods to increase profitability.

On a same-site basis (223 locations), site-level gross margin in excess of site-level operating expenses decreased in the 2017 fourth quarter by $0.4 million, or 0.4%, as compared to the 2016 fourth quarter. This was primarily due to a $5.3 million decrease in fuel gross margin that resulted primarily from lower sales volume and the federal biodiesel fuel tax credits that were available to TA in 2016 but not in 2017.

Fuel sales volume in the company's c-store segment decreased by 0.5 million gallons, or 0.8%, for the 2017 fourth quarter as compared to the 2016 fourth quarter on both a consolidated and same-site basis. This decrease was primarily due to increased competition.

Fuel revenues increased $15.6 million, or 14.2%, in the 2017 fourth quarter as compared to the 2016 fourth quarter primarily due to higher market prices for fuel. Fuel gross margin increased by $0.8 million, or 6.3%, to $13.8 million primarily as a result of the continued improvement of operations at newer locations, partially offset by a decrease in fuel sales volume.

Nonfuel revenues decreased $2.1 million, or 3.3%, in the 2017 fourth quarter as compared to the 2016 fourth quarter primarily due to increased competition. Nonfuel gross margin increased $0.1 million, or 0.5%, in the 2017 fourth quarter as compared to the 2016 fourth quarter. Nonfuel gross margin percentage was 35.2% in the 2017 fourth quarter as compared to 33.9% in the 2016 fourth quarter. The increases in nonfuel gross margin and nonfuel gross margin percentage were primarily the result of changes in the mix of products and services sold.

On a same-site basis, site-level gross margin in excess of site-level operating expenses increased by $0.2 million, or 1.9%, in the 2017 fourth quarter as compared to the 2016 fourth quarter due to increases in fuel gross margin of $0.8 million, or 6.3%. This was primarily due to the continued improvement of operations at newer sites, and nonfuel gross margin of $0.1 million, or 0.5%, primarily due to changes in the mix of products and services sold, partially offset by an increase of $0.8 million, or 2.9%, in site-level operating expenses.

TravelCenters of America is based in Westlake, Ohio. With nearly 500 sites, the chain ranked No. 17 in a year-end update of CSP’s2017 Top 202 list of the largest c-store chains in the United States.