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Barbara Farfan

Why ExxonMobil's Retail Stores Can't Turn a Profit

By June 17, 2008

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ExxonMobil announced on June 12th that it is getting out of the retail business. While the retail industry as a whole is suffering in the current economic downturn, isnít it ironic that one of the primary sources of the downturn is now also a victim of it?

The average consumer canít understand how a company that reported first-quarter profits of $10.89 billion can be the same company that announced a departure from its retail operations because it couldnít turn a profit. I didnít understand that either, until I started working as a consultant to ExxonMobil, and got a behind-the-scenes look at the retail side of the worldís largest publicly-traded corporation.

The critical difference, I found, between a profitable gas station operation and an unprofitable one was not geography, product mix, or the economic climate. The difference was found in the understanding or misunderstanding of their own unique selling proposition.

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