From its founding in 1969, Coulson Oil Co. Inc. of North Little Rock has made changes in its business based on the market and newfound opportunities.
Mike Coulson, the company’s owner, chairman and son of its founder, said in an interview that the company’s ability to adapt allowed it to “keep the doors open” as it continued to find new business.
Soon after his father started the company, a large oil company moved its distribution center from Little Rock to Memphis, and Coulson Oil picked up the customers affected by the move.
A few years later, around the time of the Arab oil embargo, the company was able to expand its real estate portfolio when the big oil companies abandoned the old strategy of having a gas station on every corner.
“If you’re just kind of paying attention, sometimes you can get ahead of things,” Coulson said.
The company has continued to look down the line, making changes in response to business developments. Recognizing a decline in demand for gasoline, the company is getting back into the retail business and expanding its commercial fuel sales division. At the same time, Coulson Oil capitalized on its existing technical expertise by launching a new division focused on servicing and distributing fuel dispensers and other equipment.
Like many companies in the industry, Coulson Oil has had its ups and downs in recent years.
In 2009, Coulson Oil reported its revenue had declined year-over-year by 35 percent. David Zakrzewski was elected president in December 2010, and the company saw a 24.4 percent increase in revenue in fiscal 2010, which ended Oct. 31.
Zakrzewski resigned after two years to take a senior advisory position, and John Harris, who was serving as vice president and COO, was elected to fill the spot, a position he still holds.
Last year, as the price of oil products tanked, the company’s total revenue declined about 10 percent from $606.3 million in 2013 to $544 million in fiscal 2014. But Harris and Coulson are optimistic when talking about the future of the company.
Returning to Retail
Harris said adaptation is driving growth in several areas of the business, but he talked at length about Coulson Oil’s re-entry into retail.
After several years of staying out of the retail business, the company purchased two gas stations in Texarkana in 2012.
“I’ll be real honest with you: We didn’t know what we were doing. It was a tough first year,” Harris said.
Since then, the number of retail stores owned and operated by the company has grown to 10, with another set to open in Conway on June 1. The company’s approach to the stores and how to lure business has also changed completely, Harris said.
The company lobbied the Legislature to allow the sale of beer growlers — sealable containers filled from drafts — and now uses them in several stores. It has also partnered with coffee providers well-known in their communities, including Westrock Coffee in Little Rock and Arsaga’s Coffee Roasters in Fayetteville.
Harris said the company has also tried deploying new technology to drive sales at the stores. One of Coulson Oil’s stores in Texarkana was an early adopter of a system that plays advertising on a monitor attached to the pumps. The advertising is now used at every Coulson Oil location and around the country.
“If we can get people inside [the stores], then we have a chance of getting them to buy something,” Harris said.
In the past, Harris said, customers were drawn to convenience stores for the sale of gas, but that more were now drawn by the offerings inside. That has led the company to also offer things like free air for bicycles and repair kits at some stores.
Harris said that the changing focus was necessary when demand for gasoline nationwide declined by almost 2 percent last year. “We knew that and had to figure out a way as to how we were going to offset that,” he said.
Despite the decline in demand, the company still reported that through the first half of fiscal 2015, the number of retail gallons sold was up 11.9 percent compared with last year.
Coulson joked that his father wouldn’t have approved of giving things away for free, but noted that changes had to be made.
“Who knows where technology is going in transportation, but obviously it’s different,” Coulson said. “And obviously as cars get more efficient … demand is flat or declining. So if you’re going to grow in this business, you have to find a way to beat the competition.”
Harris said that the growth of the commercial sales division was also spurred by making changes and that it was partially in response to the drop in demand for retail gasoline sales.
“Certainly the commercial sales division was one of the ways to try to attack that. … My job was to find out how are we going to replace that, because we can’t continue to see decline, decline, decline. We’ve got to somehow figure out how to replace those gallons,” Harris said.
Harris said that the commercial fuel sales division is now seeing the most growth.
Last year, the company sold 22 million gallons of fuel in its commercial sales division, Harris said.
In fiscal 2014, the company sold 187.7 million gallons, up from 186.2 million in fiscal 2013.
During the first half of fiscal 2015, the number of commercial sales gallons sold was up 21 percent compared with last year, according to information provided by the company.
Harris said that one of the ways the company has expanded its commercial sales division was by selling to more companies directly, including trucking firms, car dealerships and logging companies. The company now also contracts out some transportation work, as opposed to hauling the fuel itself through its transportation subsidiary.
“That [commercial sales] division’s really grown. We’ve continued to try to promote that and kind of spread our wings to customers that are certainly the nontraditional retail customers. So that division is probably growing the fastest,” he said.