A look at Citgo’s current initiatives and expectations for 2025.
By Keith Reid
While Citgo parent PDV Holding has been going through a difficult reorganization process for a few years now, it’s U.S. retail and marketing operations—some 4,300 sites—and the supply infrastructure that supports it remains a solid fixture on the fueling landscape. Furthermore, the company continues to invest in its downstream operations to enhance a historic retail brand’s competitiveness in the marketplace.
FMN interviewed Chris Kiesling, Citgo’s assistant VP of light oils operations and marketing, for an update on current market dynamics and a range of initiatives that were discussed with the company during a FMN interview last year.
Citgo launched its Illuminate image program in 2020. In our interview last year, you noted that the program had received 41% penetration. How does that stand this year?
We’ll have about 76% of our stores onboard or in progress by the end of the year. We anticipate that the portfolio will be complete in 2026. It’s important to have an inviting curb appeal, and that’s why we’ve added our Elevate program, which addresses the fascia to really compliment what we’re doing with Illuminate with the c-store itself. And we’ll complete about 75 of those this year.
We’ve seen good results from those with volume increases, in an environment where same-store sales are decreasing. So, we consider those programs to be highly successful.
Loyalty programs are increasingly important, if executed properly. Citgo has its Club Citgo program with a cash rollback component. What role does loyalty play for Citgo and what is the status of that program today?
We think that there’s a lot of potential from loyalty not only to attract new customers, which I think is what a lot of people initially think of, but to attract, retain and improve the number of visits by existing customers. If you can turn the person that was fueling at your site twice a month into someone who visits three times a month, or four times a month, then you’re accomplishing something. And we see with the loyalty transactions they’re more likely to go inside the store. That’s something that we are really driven to perform, and we see that in the results.
We met with an outside consulting firm as we ramped up our efforts to drive this process forward—and we’re currently exceeding their forecast for what we could do this far into the game. At our loyalty stores that have greater than 500 gallons per month in loyalty transactions, we’re seeing a better than five-point swing to what OPIS is showing on same-store sales, and those stores are selling more gallons this year than they were last year on a same-store basis.
A big part of loyalty success is associate involvement. How do you drive their participation and enthusiasm?
We’ve hired some people externally who’ve previously helped develop successful loyalty programs and are building programs to help our marketers learn how to train their associates. We’re very fortunate that we’ve got a tremendous relationship with our marketers. As they find things that are successful, they’re helping us build how-to testimonials, video shorts—whatever that might be—to help their peers continue to drive loyalty.
How is Citgo approaching EV charger deployment?
With EVs, we want to figure out how to help our marketers navigate what we see as a very murky situation. The key I think for a retail location is funding. There are grants and other things to be had that can help with the construction process.
The first thing we needed was to understand that construction process so we could help them navigate the challenges and minimize the level of investment that they must make. We have a couple of partnership EV locations that have gone live in the network. For the ones that have been done, the process itself was very complicated.
Right now, this is something that we feel is an uncertain return. It can be very location specific, even in some locations where you might inherently think that they would be great when you do the studies. I think that’s consistent with what you see as you look forward. You can look at the government’s own numbers and they’ve significantly backed off on the impact of EV demand from where they were maybe even a year ago.
That makes programs that were fiscally difficult to begin with even more of a challenge. And that may slow the process of having EVs at retail sites. But to the extent that we have marketers who are interested in pursuing EV customers, we’ve gained a lot of information over the last year so that we can be a good partner by helping them navigate that process.
Citgo is putting a lot of money and resources downstream. Could you describe the supply infrastructure investments?
Citgo has historically made tremendous investments in our refineries, and what we’re doing at the refineries to increase our capacity is exciting. And we’re doing things on the infrastructure side, too. A good example is our East Chicago terminal, which was previously a distillate-only terminal on the rack side. In May we completed the addition of a gasoline rack at that facility that is seeing sales of more than 10,000 barrels a day. That’s a very, very exciting project for Citgo.
We’re also building a brand-new terminal in Luling, Texas, essentially from the ground up. And we’re excited for what that represents for growth that you see in central Texas, south of Austin, and the New Braunfels market and the San Marcos markets as well as potentially capturing fringe San Antonio and even the Houston markets there along the I-10 corridor.
That excitement translates to the growth of the brand. We’ve made significant investments in the brand, as we have already discussed through Illuminate. Our Good to Go marketing campaign has been very well received, and it’s something that we plan to continue to build on. I’ve been traveling a lot, and I’ve had the opportunity to see our new-to-industry site with Sun State down in Alabama. That’s going to be a fantastic site. And I was up in Massachusetts the other day with another new to industry site in Yatco that’s just going to be beautiful. And you see what’s coming on across the country, and you see the standard of our brand continue to rise. It’s fun.
Citgo has long resisted company owned, company operated sites. Has the attitude at Citgo changed now, with many brands reexploring that option?
No, we’re sticking to our roots. We still feel like the best way for us to go to market is through our marketer class of trade, and we help support them and their retailers to do the best job that they can to bring the fuel to meet the demands of consumers. And we want to be an engaged partner.
