Dive Brief:
- Parkland USA has cut over 300 jobs since January 2023 as the Canadian c-store retailer’s U.S. business continues to underperform, company leadership said during its Q2 earnings call last week.
- These staff reductions have occurred across Parkland USA’s operations in Idaho, Utah, Montana and the Dakotas, Chief Financial Officer Marcel Teunissen said. He did not clarify what departments these employees worked in, and representatives from Parkland did not respond by press time when asked for this information.
- The job cuts are one of many “targeted cost-saving initiatives” Parkland USA has implemented over the past year as a means to offset declines sparked by economic headwinds, Teunissen said.
Dive Insight:
Similar to last quarter when Parkland’s leadership said its U.S. business was behind where they wanted it to be, last week, they once again cited declines in retail commercial fuel volumes as its main challenges. Both Teunissen and Parkland President and CEO Robert Espey said they believe these headwinds have been driven by high fuel prices, weather, and changes in consumer behavior.
Besides the staff cuts, Parkland USA has also consolidated regional branches and eliminated 150 “underutilized” trucks in those same states to save costs, Teunissen said.
Parkland USA’s business in Florida is also facing headwinds, especially in its retail and supply arms, which “have yet to reach their full potential,” Espey said.
He noted that the company is making “tactical improvements” to increase margins, reduce costs and optimize in-store results in Florida. Those include reducing labor and overtime by over 300,000 hours per year, and refreshing the interior of and merchandising options at over 40 On the Run c-stores.
“While certain supply margins were challenged during the quarter, we have seen these subsequently improve and I know our talented supply team will be able to take advantage of this to improve results,” he said.
Another catalyst for Parkland USA’s struggles in Florida has been margin issues in its supply contracts, which haven’t given the company “enough room to maneuver in a tough price environment,” Espey said. He noted that the company is in the process of fixing those contracts, which should enable Parkland USA “to be more responsive on the pricing side, adding “Expect that … to be done in the quarter, and we'll see the full impact of that in Q4.”
Overall, Parkland USA delivered an adjusted EBITDA of $49 million during the quarter, which was actually an increase from $33 million in Q1, according to its latest earnings report. However, it was down 34% year over year, and Teunissen emphasized that the U.S. was Parkland’s only segment that didn’t experience year-over-year growth this past quarter.
Parkland USA operates 650 retail sites across Idaho, Montana, North Dakota, South Dakota, Wyoming, Colorado, Utah and Florida
