TravelCenters of America Won’t Let COVID-19 Derail Its Transformation Journey
WESTLAKE, Ohio – During the final days of 2019, Jonathan Pertchik assumed the role of CEO of TravelCenters of America Inc. (TA). As the timeline shifted to 2020, leading the company’s transformation was at the top of its agenda. Three months later, the COVID-19 pandemic began to sweep across the country.
“I was expecting something crazy in a good way, which means lots of opportunities to improve and change. I arrived with that mindset. Then, three months later, this storm of 100 years of COVID are coming and no one could have expected it, “Pertchik said Convenience store news following the company’s second quarter 2021 earnings call, held on August 3.
When COVID hit, TA had just started the investigative and evaluative phases of its transformation journey – trying to sort out what was broken and what could be better. Just weeks before the global health crisis gripped the United States, CFO Peter J. Crage joined TA’s leadership team and the company’s plan to move forward began to to take shape. However, soon after, the retailer was faced with “the heartbreaking decision to put some 4,000 people on leave,” according to Pertchik.
“This is something that is really hard to think about. If we hadn’t done it, we would have been in bad shape. We took this short-term step and kept moving forward by bringing various changes, “said the managing director.
In May 2020, two months after the onset of COVID, TA undertook a corporate restructuring. “Imagine trying to find, let alone on board, new SVP [senior vice presidents] and high level leaders at a time when you couldn’t be close to each other, ”he said. “It’s amazing if you think about it; the challenge of finding and integrating people, and bringing it all together. “
And it’s falling into place, as evidenced by TA’s most recent earnings. Compared to its second quarter a year earlier, TA reported adjusted net income of $ 29.7 million for the second quarter of 2021, an improvement of 176%; Adjusted EBITDA of $ 73.5 million, an improvement of 61%; and Adjusted EBITDA of $ 137.1 million, an improvement of 26%, CSNews Previously reported. The results are also up compared to the same period in 2019.
“Last year was really just a year of planning and preparing, putting together the right team, sorting out our balance sheet, increasing cash flow, improving our operations, place of a centralized procurement function. These are just a few of the basic, fundamental things. In many ways we have prepared things rather than [making] a lot of changes, ”explained the CEO.
This year, TA changes course and executes its plans.
The retailer strives to evaluate its business processes in order to find ways to better meet the needs of its customers. One of the key pillars is knowing who the guest is and making sure that the guest – whether a professional driver or a motorist – is at the center of everything they want. made. As the purchasing needs of customers change, TA will also adapt to meet their needs. In this context, TA is focusing on the customer journey through its stores, which has led to a new reflow initiative.
Changes are also underway for its food offer. The company is not only streamlining its restaurant portfolio, but is also developing two new food concepts.
Additionally, TA identified diesel fuel as a high margin opportunity. The company has created a commercial division to combine its fleet, fuel and truck service into a single operating unit.
Although new issues have emerged as the pandemic continues – such as labor pressures and supply chain disruptions, which were happening all along but are now exacerbated – Pertchik remains optimistic about the future of the company. He says TA is only at the start of his transformation journey.
“We have these good fights every day. It just goes into the blocking and tackling bucket. But it doesn’t hurt us financially, it doesn’t hurt us operationally. It slowed down some things, but it really slows down the process. speed at which we are able to seize opportunities. But that doesn’t hurt our performance as we have so many fundamental changes going on that are starting to pay off, ”he said CSNews.
Westlake-based TA has more than 270 locations in 44 states and Canada, primarily under the TA, Petro Stopping Centers and TA Express brands. The company is committed to sustainability, with its specialized business unit, eTA, focusing on sustainable energy options for drivers and professional motorists, while leveraging alternative energies to support its own operations. TA also operates over 600 full-service, quick-service restaurants and nine exclusive brands, including Iron Skillet and Country Pride.