New Name in Store at Diamond Shamrock
Jul. 1–Coming soon to a neighborhood near you: The Valero gas station and convenience store.
In a bid that could make its name as familiar as that of Exxon Mobil or Shell, Valero Energy Corp. is getting rid of the Diamond Shamrock brand and taking the Valero name to 2,900 retail stores — giving the company a national brand for the first time.
“We are very excited about having the Valero name on our retail and wholesale sites across the country,” Valero CEO Bill Greehey said Thursday.
The company sees “significant value,” Greehey added, in having San Antonio-based Valero more widely known as it pursues its biggest deal ever, an $8 billion acquisition of refiner Premcor Inc., expected to close this fall. The acquisition would make Valero North America’s largest independent refiner.
As part of the brand expansion, Valero will drop the Diamond Shamrock name and replace it with a teal-and-yellow logo that sports a giant “V” crossed by a line resembling a winding road.
“Most people don’t know that Diamond Shamrock is Valero, except maybe for folks in San Antonio,” Greehey said.
The change will be most visible in the Midwest, where the company’s stores now carry the Diamond Shamrock name. Valero will spend $70 million over two years to change 1,030 Diamond Shamrock retail locations and 830 branded wholesale sites, which are owned by independent distributors who have brand and supply agreements with Valero. The wholesale stores don’t use Valero’s Corner Store designation.
Valero inherited the Diamond Shamrock name — along with its retail stores — when it bought Ultramar Diamond Shamrock Corp. in December 2001.
One energy expert was skeptical of the switch.
“This is a call that I think could go either way,” said James L. Smith, who holds the Maguire Chair in oil and gas management at SMU’s Cox School of Business. “Certainly, Diamond Shamrock is a recognized brand and this will mean the disappearance of the brand of choice for many customers.”
Greehey said he expects the rebranding to be successful, because sales volumes increased at retail stores that Valero has already changed on the East and West coasts.
“We’ve gotten so many calls and positive comments” about the look of the stores, Greehey said, including from a stock analyst who commented that the Valero store was distinctive. “We’re confident that the Valero brand will be as popular with our customers in the mid-continent as it has been on the West and East Coasts.”
Greehey said that expanding the brand has been planned for more than a year. The company began extensive research to develop a Valero brand after it acquired Exxon Mobil Corp.’s Benicia, Calif., refinery, along with 80 retail sites and 270 branded wholesale locations in California.
The rebranded stores will get a big marketing push. The company has allocated an additional $15 million to its advertising and promotions budget to support the brand conversion.
San Antonio will get its first look at the Valero brand at a new company-owned store to open in mid-July near the Toyota plant at 2902 S.W. Loop 410.
The changes “will make a big difference in San Antonio,” Greehey said, “because it’s our leading market.” On Thursday, Valero rolled out its new logo for the first time in Texas at a store near its Corpus Christi refinery. New stores are planned by July’s end in Cypress and Edinburg.
Valero has 130 stores in the San Antonio area and has the biggest share of the local market. Valero research showed about 34 percent of San Antonio motorists buy gasoline from Diamond Shamrock stores.
Valero’s top five market areas after San Antonio are Houston — where it has 140 stores — Dallas-Fort Worth, Austin and Oklahoma City.
The Shamrock name won’t completely die because Valero will continue to use it and the Beacon name for smaller stores that don’t meet its sales volume requirements to rank as “premier” stores. In addition, its 1,000 Canadian stores will continue to use the Ultramar brand name.
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