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Mexico’s Oxxo chain takes control of DK stores in Texas and New Mexico

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Oxxo, Mexico’s largest convenience store brand, will slowly emerge in El Paso in coming months after the $385 million purchase of DK stores was recently completed.

Oxxo will likely have two test stores in El Paso by the end of the year, with more added in the first quarter of 2025, said Constantino Spas, an executive for Fomento Económico Mexico, or Femsa, Oxxo’s parent company based in Monterrey, Mexico.

The DK stores will be remodeled as part of the brand conversion, he said.

Femsa completed its purchase Oct. 1 of 249 DK stores in Texas, including 77 in El Paso, about 25 in New Mexico, and in Arkansas, from Delek US Holdings, the Tennessee-based oil refiner. The stores, for many years, had the 7-Eleven brand. The deal was first announced in August.

It will likely take until 2026 to complete rebranding the DK stores to Oxxo, Spas said in a recent phone interview.

Oxxo is retaining the DK chain’s 1,679 employees, including about 550 in El Paso, said Spas. He’s overseeing the U.S. stores’ brand conversion in his role as chief executive officer of Femsa’s Americas and Mobility Division, which includes Oxxo stores in South America and Oxxo gas stations in Mexico.

Oxxo is the largest convenience store operator in Mexico. It had $16.5 billion in sales in 2023, not including $3.5 billion in sales from Oxxo gas stations. Those sales are part of Femsa’s total 2023 sales of $41.6 billion, including its huge Coca-Cola bottling company.

“Our ambition is to expand throughout the U.S.’ Spas said. “This is only the initial step into a long-term strategy and long-term journey that we want to undertake in the U.S.”

“We look to grow through a combination of acquisitions,” and building new stores, he said. 

“In Mexico, Oxxo opens 1,000 to 1,100 stores per year, at a pace of about three stores a day, and we’ve been doing that for a few years,” Spas said.

Oxxo had 22,658 stores in Mexico at the end of June, and 1,022 stores in South America, Femsa’s second-quarter financial report shows. Juárez has about 340 Oxxo stores.

Most of its stores in Mexico do not have gas stations. But it also had 570 Oxxo gas stations in Mexico at the end of June. Some of those stations also have Oxxo stores.

The acquired DK stores will continue to sell Delek’s Alon- and DK-branded gasoline through an agreement. The fuel comes from Delek’s oil refinery in Big Spring, Texas.

The Oxxo stores in the U.S. will look similar to stores in Juárez, but “they will most likely not be identical. And that is a key of what Femsa does. … It caters to the local needs and preferences,” Spas said.

“Our coffee program in Mexico is highly regarded, and we know it has high potential for consumers in the U.S. Our different assortment of products (including many Mexican products) will also become, I think, a winning element in our value proposition.”

“We’ll bring some surprises on the food offerings, too, that will be different,” Spas said.

It also plans to bring the Spin by Oxxo digital wallet card into the United States. Mexican migrants’ remittances, or payments back to their families in Mexico, will likely become an important part of the Oxxo electronic financial transactions system, he said.

The DK stores are one of the major convenience store chains in El Paso, along with Circle K, owned by Canadian company Alimentation Couche-Tard, and Speedway, owned by 7-Eleven Inc., based in Dallas.

“We analyze, we try to understand, and we admire our competitors. Every competitor has relevant value propositions and they’re formidable competitors,” Spas said.

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“We believe (El Paso) is the ideal (U.S.) market to test and learn some of our hypothesis for the brand and for our business, for sure. And we know first-hand, given our research, and also common sense that Oxxo has a high brand awareness in El Paso because of its presence across the border in Juárez and other areas of Mexico,” he said.

“We will test, and we will learn” Spas said. “But clearly, as part of our business approach, we pivot fast, we refine, and we continue to grow and roll out.”

Vic Kolenc may be reached at 915-546-6421; vkolenc@elpasotimes.com; @vickolenc on Twitter, now known as X

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Publish date : 2024-10-14 00:39:00

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Author : theamericannews

Publish date : 2024-10-14 13:22:17

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