Jacksons Food Stores reaches deal with Chevron
Motorists who gas up at Jacksons Food Stores may soon get a jolt when the Jacksons sign disappears from 25 stores from Boise to Payette that sell Chevron gasoline.
Customers still will fill their tank at those stations with Chevron gas, and the convenience stores won't really change that much. But the new signs represent a significant milestone for John Jackson, the CEO of Meridian-based Jacksons Food Stores. And the change is already bringing new jobs to the Treasure Valley.
A deal Jackson struck with Chevron will expand his family-owned business empire, already a major Treasure Valley employer and the fourth-largest privately held company in Idaho behind Albertsons, WinCo and Simplot. Jacksons now has stores in five Western states. Before long, Jackson could be overseeing convenience stores from coast to coast and in Mexico.
Sixty-three Jacksons stores that now sell Chevron or Texaco gasoline will soon become ExtraMile convenience stores, under a joint venture of the two companies. An additional 173 stores — 59 in Idaho, 49 in Washington, 46 in Oregon, 11 in Arizona and eight in Nevada — will keep the Jacksons name. Those stores sell Shell gas.
Altogether, Jacksons has 6,000 employees. About 600 will shift to ExtraMile when the changes take effect, Jackson said.
Jackson will become the chairman of ExtraMile Convenience Stores LLC and will guide the company. ExtraMile has operated for more than a decade with nearly 800 stores in California, Oregon and Washington. Of those, 250 have been owned by Chevron and the rest by franchise operators.
The affected Jacksons stores in Washington and most in Oregon will convert to ExtraMile this year. The Idaho stores and ones in Oregon border towns will make the switch in 2019, Jackson said.
Under the deal, ExtraMile will move out of Chevron and become a separate company, headquartered in San Ramon, California. Both ExtraMile and Chevron are headquartered in Ramon, about 35 miles east of San Francisco.
ExtraMile plans to double its number of stores over the next decade.
Jackson spoke to Statesman reporter John Sowell.
Sowell: How did the deal come about?
Jackson: We’ve had a good relationship with Chevron. I think we’ve been with them for about 14 years. We kept growing and buying existing marketers. We got to be their largest customer, and they wanted to do something more with us.
They operate about 250 sites — they’re the only large oil company that has convenience stores that they run with their own folks.
We suggested maybe we could work together on those. They didn’t want to do that, but they did have this franchise called ExtraMile. They offered us a chance to buy half ownership in that and take over operations.
The reason they wanted to do that was they had a lot of demand for it, but they had a freeze on hiring people, because the price of oil went down so much, and they were in a holding pattern. They didn’t want to expand and add people, but they really needed to.
We formed that joint venture and pulled ExtraMile out from under the Chevron corporate world.
We can do things much quicker than Chevron. We’re a small company. We’re not part of a global conglomerate, so we don’t have to get authority way on up.
We’re hiring extra people.
There are something like 6,000 or 7,000 Chevrons in the U.S. They’re not all candidates, but many of them are. Our goal is to double the number in 10 years, which we think is very doable.
There are people in Texas and across the Southeast that are asking for ExtraMile. That’s in the eastern division of Chevron, and they don’t have any of them over there now. They’re wanting us to go that way.
We want to move across the West, and then across the South and Southeast, and then maybe in Mexico.
'We're going to grow here'
Q: What kind of management system will you have?
A: We have pretty much everyone who worked within the ExtraMile group. They were all formerly Chevron employees.
But in addition to that, we support the accounting and the HR and some of the marketing here in Boise for that company. And we charge a fee for the support we give them.
The people who are working here are our employees. They’re not employees of ExtraMile. And Chevron has the same thing. They kept the advertising part, the legal, and they also support some of the IT, and they charge a fee.
Ultimately, as we evolve, we want to get Chevron support completely out and do it all from here.
We’ve added people here to do some of the support. As we grow, we’ll add more people. That’s maybe the more relevant piece for what the Boise Valley would be interested in. We’re going to grow here because of our growth elsewhere.
Q: How many people might you add for that operation here?
A: I think we’ve added eight so far. As we grow from 800 sites to 1,600, I see that growing exponentially.
Two brands in one market? Why?
Q: As you shift your Chevron stores over to ExtraMile, how is that going to affect your customers who are used to the Jacksons name?
A: I’m not exactly sure.
There are pros and cons. The negative side of it is that we have a strong market presence here and good brand recognition. The efficiencies of having one brand is a competitive advantage.
When we have two, we’ll be less efficient. We won’t have the brand recognition: You have to advertise two different brands. You’ll have two different uniforms. Two different images out there with your facilities. You look at that and say: Why on earth would someone want to do that? I mean, that’s like shooting yourself in the foot.
But the reason we’re doing it is — Chevron felt and I agreed — if we were going to be a partner of theirs in ExtraMile, we needed to be all-in, so to speak. So our Chevron stores needed to be ExtraMile if we were going to sell that concept to others.
We have 230 stores, and they have 800. We would be the tail wagging the dog if we didn’t do that. We agreed to that, but locally it’s not something I’m really looking forward to. Hopefully, it’s the right move long-term.
Ultimately, we hope to do distribution through Capitol Distribution [also owned by the Jackson family], as we do now for our own stores. We would like to sell to their small stores. That would involve a new distribution center somewhere in the southwest part of the country. That’s years down the road.
Same products in local stores
Q: When you convert your stores, will customers see some changes?
A: They will see the same products, basically. We have a pretty robust private-label program. We have something like 250 [products] with Jacksons’ name on them — everything from candy bars to potato chips.
ExtraMile didn’t have any private labels, but we’re introducing them now. They’ll be the same product, but they’ll have a different brand on them.
Q: How long did it take to come together with an agreement?
A: A long time. Chevron moves quite slow. Again, that’s the genesis of why we’re doing this.
I think we worked on it for two years. It had to go all the way to the board of directors and the CEO of Chevron to sign off on it.
They’re a company with a lot of engineers, and they’re doing exploration for oil offshore and running refineries and all of these high-risk operations, and so they’re extremely careful and thorough. They don’t move fast, because they want to make sure everything is just right. That’s just their culture.
In retail, there’s certainly risk, but you have to move quickly in choosing products and that sort of thing. If you’re too slow, the market changes and you’re always behind it.
One goal: 'change the culture'
Q: How did the owners of stores waiting to switch to ExtraMile react?
A: The people who were out there waiting awhile were excited. We certainly move faster.
Q: How is this going to affect the time you put in on the Jacksons side vs. ExtraMile?
A: On the front end, it’s very important that I’m focused on ExtraMile. I may even get an apartment down in San Ramon so I can be closer to the operation, on the front end, especially, just to try and change the culture and get them used to how small businesses operate.
Q: Jacksons is known for its customer service. How is ExtraMile in that regard?
A: I think it’s pretty good, too. A lot of these franchisees are individual store owners, and they’re on top of their customers and their stores and understand the importance of treating their customers right. They seem to have the same ideals we do. Cleanliness is very important, which is part of the Chevron culture, too.