OnCue Express, of Stillwater, Oklahoma, a retail joint venture with Phillips
66, has opened its first store in Texas, near the Phillips 66 headquarters in
Houston.

Phillips 66 declined to respond when asked if more Texas store openings are
planned or if the latest store would be used as a laboratory to test concepts
for Phillips' branded network. The major told OPIS it would not comment on
future business plans or operations.

"Since 2017, Phillips 66 has reimaged more than 5,400 of the sites within our
branded network. The remaining sites will be completed this year," the company
said in an email.

However, the new site is convenient to Phillips' headquarters where the major
can easily observe retail operations. A recent Phillips blog had said, "The
state-of-the-art site, which opened in December, highlights ongoing efforts by
Phillips 66 to elevate the company's gasoline brands."

And based on OPIS data, OnCue is worth watching. The Oklahoma chain has the No.
1 market share by store brand in the state and in Oklahoma City, according to
OPIS MarketSharePro. It prices fuel at market, while closest rival QuikTrip,
with the No. 2 Oklahoma market share, prices fuel 2cts/gal below market.

OnCue Express also has the highest efficiency rating in Oklahoma and the No. 8
efficiency rating in the United States, MarketSharePro reveals. The efficiency
rating measures throughput. OPIS calculates brand efficiency ratings by taking
market share and dividing it by outlet share to indicate how much fuel a brand
is selling in relation to how many outlets it operates in a given geography.

Founded in 1966, OnCue has largely been an Oklahoma operator with a
concentration of stores in Oklahoma City, though it had a couple of stores in
Kansas years ago, a spokeswoman told OPIS. OnCue has more than 75 stores in
Oklahoma, 45 in Oklahoma City, and opens three to four stores per year, the
company said.

The store format has steadily grown to more than 8,000 square feet and OnCue
said future stores will be the size of the Houston site. A Phillips 66 blog
described the Houston store as a record 9,300 square feet sitting on a
three-acre lot, with indoor dining, a gourmet coffee bar, a walk-in beer cave,
drive-thru window and a wine section with a sommelier.

The store has 12 dispensers with 24 fueling positions offering seven grades of
fuel, including non-ethanol premium, E85, E15 and diesel. Other stores in
Oklahoma offer electric vehicle chargers and compressed natural gas.

Like more than a dozen other OnCue stores, the Houston site also offers a
drive-thru window allowing customers to purchase select convenience
merchandise. Food service items are not available through the drive-thru
operations, as the ordering process is still being perfected, OnCue said. As a
result of the COVID-19 pandemic, some Oklahoma stores have added curbside
pickup. OnCue discontinued a test of delivery service because "it didn't work
with our system."

Phillips 66 said it formed a joint venture with OnCue in 2015. In a 2019 filing
with the U.S. Securities and Exchange Commission, the oil major disclosed that
it had a 50% interest in OnCue with a book value of $70 million and that it had
fully guaranteed $54 million in debt obligations for the JV enterprise.

--Reporting by Donna Harris, dharris@opisnet.com; Editing by Michael Kelly,
michael.kelly3@ihsmarkit.com



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