3_Pioneer_ExPress_Fall_06

A PUBLICATION TO FUEL THE SUCCESS OF OUR RETAILERS

Fall 2006

Wahnapitae site’s makeoverpage 4

Recipe for success in Gananoquepage 5

Fraud artists beware!pages 2 & 3

In the largest marketing initiative ever undertaken by Pioneer, Electronic Bonus Bucks (EBB) will roll out across our entire Pioneer-branded network by early this fall.

“Our pilot project was a success,” says Dave MacFarlane, Vice President, Marketing and Merchandising. “Based on that, and our consumer research, we decided to roll the program out to the balance of the network. Electronic Bonus Bucks were very well received by customers in our pilot markets.”

Following a whirlwind ‘EBB Roadshow’ with stops in Ottawa, Sudbury and Barrie to introduce the program to Pioneer Retailers in network regions not covered by the original pilot program, Pioneer launched the program in these markets on August 16. Launch dates for the remainder of the Pioneer network were set at September 6 and September 20.

Dave says that the pilot program prompted some minor enhancements to

further benefit consumers, Retailers and Attendants:• Rather than receiving 3X Bonus

Bucks upon registration, consumers will be entitled to 3X Bonus Bucks upon card activation (its first use). For the typical customer purchasing 40 litres weekly, this translates to 2.25 to 6.75 cents per litre savings, depending on the grade purchased.

• The online registration process and form itself have been simplified.

• The prize pool for customers who register their cards has been expanded. Initially, it was one prize of $1,500 in Bonus Bucks. This is now quintupled, to five prizes of $1,500 in Bonus Bucks.The Electronic Bonus Bucks program

not only offers outstanding incentives for Pioneer’s customers, it providesa much more effective means of understanding and communicating with those customers.

50th Anniversary coming! November 29, 2006 marks the 50th Anniversary for Pioneer Petroleums!

It’s an important landmark for our company.You’ve already seen a preview of our celebrations, with a special

‘anniversary’ treatment of our logo to mark this milestone year, and vintage-style posters at our stations to help illustrate our history (see page 8 for the poster). Watch for more celebrations to come – including stories from our Pioneer alumni and long-serving employees (see pages 4 & 5 for previews), a special anniversary issue of our Retailer Express, and more!

Electronic Bonus Bucks now network-wide!

continued page 8

EBB program updates enhance customer experience and provide incentives to Attendants to encourage card activation.

Incentives for consumers, Retailers & Attendants

1800 Burlington Street East, Hamilton location – 1960s.

PG 2

SITE SECURITY

Rewards for fraud detection and arrest

The Pioneer people responsible for these two discoveries were recognized in July for their outstanding efforts. Pioneer’s payment processing firm, Global Payments Canada, honoured Retailer Sal Abouchala of Site 134 in Oakville and Attendant June “Charlie” Legue of Site 176 in Breslau with $1,000.00 each. Pioneer Petroleums was also proud to reward Sal and June with an additional $500.00 each.

“Their rewards from Global Payments and Pioneer were the result of the actions by our people in determining their equipment was compromised, and because each investigation resulted in an arrest of a suspect,” notes Troy Richter. “These arrests are very important, and both Global Payments and Pioneer wanted to recognize that,” he adds.

Receiving the combined $1,500.00 reward was a special honour for Oakville’s Sal Abouchala. “It’s great!” Sal says. “ This keeps everybody motivated to do their checks, and helps make us all aware of the risk factors that can lead to fraud. The inspections we do might seem routine, but there’s nothing routine about keeping our customers and our business safe!”

Sal outlines how the unauthorized activity was detected and handled. “A new employee was hired a week prior to the discovery. I did my due diligence, checked references and driver’s license during hiring. I conducted my regular inspection according to the ‘Red Book’ binder and discovered that the keyboard had been tampered with and that a camera had secretly been installed. The police and Head Office were notified immediately. After going through my employee records, we narrowed down who we should be paying attention to, and that person was ultimately arrested. They confessed to everything.”

Sal’s situation highlights the fact that careful hiring – while critical to a Retailer’s business – cannot stop the potential for fraud by itself. Regular follow-up helps to ensure that an employee who may have been influenced to commit transaction fraud will be caught.

June says that a newly hired employee also targeted the Breslau site where she works. “I noticed one morning that security labels on the keyboard had been tampered with,” she says. “I immediately showed Kathy Wilson, our site’s Retailer.”

Bob Reid, Pioneer’s Maintenance and Repairs Manager, was on-site at the time. With Bob’s assistance, an inspection of the area uncovered a small surveillance camera in the ceiling, focused on the PINpad. Further investigation revealed a larger recording device above the ceiling, wired in a way that made it a serious fire hazard. June says that a review of the site’s security tapes showed a recently hired employee tampering with the ceiling. Police arrested the individual when he reported for work.

Fraud artists put on notice: Beware!Following “Best Practices” helps shield our sites from fraud.

Pioneer’s recent anti-fraud initiatives, combined with the efforts of our watchful Retailers and Attendants, have dramatically reduced the potential for debit or credit card fraud at our sites.

Two important strategies – Pioneer’s ongoing Protect Your PIN program and our Merchant Best Practices binder – are making sites more secure, and reducing the threat of fraud being perpetrated during a transaction.

Highly visible ‘Protect Your PIN’ signage at every site’s pay points reminds customers of their obligations to safeguard their personal information.

Following the detailed check-list in the ‘Merchant Best Practices’ binder helps Pioneer Retailers and employees to detect unauthorized equipment or alterations to areas around the point of sale associated with card skimming.

“Our ‘Merchant Best Practices’ binder (nicknamed the ‘Red Book’ by many), provides a vital record of the inspections we’re making to point-of-sale equipment and surroundings,” says Troy Richter, Retail Systems Manager. “These inspections assure the public that our Retailers are paying careful attention to the safety of their personal information, and that our point-of-sale area is safe,” he adds.

District Managers take Retailers through the steps of conducting these inspections, and provide on-going support to help reduce the threat of fraud over time. The inspections include keyboards, PINpads, counter areas, ceilings, pumps and adjacent areas where unauthorized equipment such as card readers or cameras could be covertly installed.

Inspection records are maintained to ensure a continuous record of compliance, and it is essential that Retailers conduct these inspections three times each week, Troy notes.

Some Retailers, including Alexander Klinko at Site 257 in Gananoque, are even conducting these inspections daily, for enhanced security and peace of mind (see Alexander’s Retailer profile on page 5 for more). “It helps me sleep better at night,” Alexander says.

The binder’s inspection records must be supported by current and accurate shift schedules for staff, as well as complete employee records. This information can be essential in assisting police with fraud investigations.

“We’ve had two incidents in recent months of unauthorized equipment being detected at our sites through our inspections,” says Troy. “These two discoveries led to containment of the problem at each site. Arrests were made in both cases, and no financial losses were felt by customers. The bottom line is that being diligent pays off.”

PG 3

SITE SECURITY

Sal and June recognized for their diligence by Global Payments & Pioneer

From the left, Steve Whitmore (National Relationship Manager, Global Payments Canada), Walter Santubunono (Sr. Manager Fraud Investigations, Global Payments Canada), Sal Abouchala (Pioneer Retailer Site 134 in Oakville), District Manager Ed Whitehouse.

“I’m just happy that I was able to help,” says June. “I was pleased to receive the reward, and so proud of how it all turned out.” June added that in her two years with Pioneer she has learned to be on the lookout for anything suspicious at the point of sale. “I keep an eye on the counter and the equipment, and I listen to what our customers say. They trust us to look after them and their cards. Our reputation is so important and one way we can protect that is to always be alert.”

Guy Desrochers, Vice President, Retail Operations notes

that we must all be aware of the great potential risk to the company if we are not vigilant. “If we can check our sites, and make it part of our business practice, we can deter those behind this kind of fraud from even approaching our people,” he says. “We want our customers to have confidence in Pioneer and to know that every transaction is handled safely.”

Special thanks to Sal Abouchala and June “Charlie” Legue for their attentiveness, and to all our vigilant Retailers and their staff – Pioneer’s first line of defense against fraud.

From the left, Steve Whitmore (National Relationship Manager, Global Payments Canada), Walter Santubunono (Sr. Manager Fraud Investigations, Global Payments Canada), June “Charlie” Legue (Attendant at Site 176 in Breslau), District Manager Darren McLachlan.

Fraud artists in some areas are now turning to alterations at the pump to skim debit and credit card data, according to a Citytv report that aired late July.

Card readers at the pump are tampered with, and an ‘overlay’ is secrety installed, which contains a device to read card information when pay-at-pump is used for the transaction.

The illegal installation is very small and sophisticated – a memory chip located within the pump’s card reader – making them difficult to detect. Installation can take only 30 seconds!

Variations of this technique have been used by criminals for some time with ATM machines, and have now been detected at a small number of other gasoline retail sites in south-

western Ontario. Pioneer’s sites have not been affected, and no evidence of pump tampering has been found at our locations to date. We need to keep this kind of fraud out of our sites!

A Peel Police Organized Crime Team representative quoted in the report notes that organized crime is often behind this type of operation. The technique employed to skim cards in this case is different, but the risk to customers is the same.

The message for our Retailers: extra vigilance is absolutely necessary, and careful pay-at-pump inspections as part of our Merchant Best Practices checks are our first line of defence.

You can read more, and view the Citytv report online at http://www.citynews.ca/news/news_2354.aspx to learn more.

FRAUD UPDATENew high-tech threat at the pumps means covert cameras are not the only risk

A 50th Anniversary preview

MemoryLaneDown

As part of our upcoming 50th-Year celebrations, we’re honouring some special long-serving employees and retirees. You’ll find full profiles in our upcoming Anniversary issue, but in the meantime, here is a brief preview!

Ed WassFormer General Manager. Pioneer’s first Vice President. Retired in 1987.

Ed Wass vividly remembers Hamilton’s first gasoline price war, even before he began his career with Pioneer in September, 1957. It taught him how tough competition can be, and how successful gasoline retailing depends on much more than price. Ed learned the value of outstanding service early in his working life.

“I’d been running two Shell stations, and was thinking of getting out of the business when a supplier mentioned my name to Murray Hogarth,” Ed recalls. “I started at the Upper James site as Assistant Manager.”

Ed, who turned 79 on August 2, 2006, remembers Pioneer’s strong emphasis on service, even when the company was no larger than a single site ...

Read the whole profile in our Anniversary issue, coming later this fall!

PG 4

RETAILER PROFILE

Wahnapitae site’s ‘extreme makeover’It’s been a team effort for new

Retailer Chantal Barnett and District Manager John Evans as they worked to open the doors late July on newly renovated Esso RBD Site 218 in Wahnapitae, on Highway 17 about 15 kilometres east of Sudbury. The site was re-branded to Esso in May, 2005 and converted at that time from full-serve Pioneer to full-serve Esso.

“The renovation has been a major transition, but I knew that something good could come of this,” says Chantal of the effort involved in transforming the station where she began her career with Pioneer two years ago as an Attendant.

Her site’s ‘extreme makeover’ also reflects her new responsibilities as a Retailer. Chantal moved from Attendant

to Assistant Manager under two previous Retailers at the site. DM John Evans saw her potential and the initiatives she took, and offered her the operation.

“When I started out there was no canopy, and the site was full-serve,” Chantal says. “Now the site is totally transformed to a self-serve operation. We have a canopy now, with five pumps and a 1,000 square-foot Snack Express with a Country Style counter, ATM and full lottery centre, plus more sophisticated back-office technology to let us be more efficient … it’s on a totally different scale!” she beams.

Pioneer’s Head Office team

also enthusiastically supported the renovations. “With Pioneer, it’s like a big family!” says Chantal. On-going

encouragement and hands-on help from Chantal’s husband, daughter and son have also made the transition easier, she adds. “Everyone has been wonderful!”

With the renovation complete, Chantal has no plans to rest. “I’d like to bring in even more offerings to take advantage of our local market,” she says. “John and I are exploring the idea of offering pizza by the slice, movie

rentals and a bait machine for the fishing season. We have a lot of tourist traffic, so we want to make the most of our location.”

DM John Evans sees tremendous potential in the site with Chantal’s high-energy approach. “Chantal is willing to put in the effort it takes to make the business successful. There’s even more in the works,” he says.

CHANTAL BARNETT, Site 218 at 161 Highway 17 East, Wahnapitae

Chantal Barnett is proud of her Wahnapitae site’s recent makeover.

Karl WorkFormer General Manager. Retired in 1988.

Karl Work is 83 years old, and his eyes have the steadiness and confidence of a man who has seen much in his lifetime.

He joined Canada’s Armed Forces in his last year of high school, spending four birthdays overseas as World War II raged. As an Air Force Radar Technician during the D-Day invasion of Europe, he lived through relentless enemy fire. Following the war, as Divisional Manager first for Firestone and later for Gulf Oil, he took valuable lessons from the corporate world that would serve him well at Pioneer.

Joining Pioneer as Murray Hogarth’s Assistant General Manager in January, 1970, Karl was immediately impressed by the entrepreneurial spirit driving the company...

Read the whole profile in our Anniversary issue, coming later this fall!

PG 5

RETAILER PROFILE

Recipe for success in GananoqueEasy access. Quick transactions.

Attention to detail. It’s a short list, and it’s Alex Klinko’s hard-earned ‘recipe’ for success at his new self-serve Gananoque Snack Express operation, Site 257. The site opened for business on May 15 this year. It features four pump islands and full-size Snack Express.

“It’s a big operation compared to my last site,” says Alex. “We have a lot to offer, and convenience items are a big part of our business. You must have what customers want – and we do!”

A Pioneer Retailer since 1997, this is Alex’s fifth site. His most recent was a smaller two-island station, not far away in Gananoque. When Site 257 was completed and opened this spring, Alex was totally prepared for the challenge.

Alex’s family came to Canada in 1996 from the Ukraine. “I had a small business there,” he says. “I’d always enjoyed working with the public, and Pioneer gave me a chance as a Retailer in Ottawa. I put what I knew about business and good service to work.”

It starts with good access to the site. “We keep it moving smoothly,” Alex says. “Our terrific lot naturally encourages traffic, and brings in more customers for convenience items. They know they don’t have to wait.”

Once those customers are inside, Alex and his team keep customer

satisfaction high with an emphasis on speed – another key element to a prosperous site. “I’m good with cash,” Alex says. “There are only a few seconds to get it right.”

“Our big Snack Express has an eight-door cooler, snacks, coffee, magazines, cold drinks … and big washrooms that customers appreciate,” he notes. It all adds up to an outstanding customer experience.

“We’ve certainly cornered the market in this town,” notes DM Rick Bairstow. “We have at least doubled the size of the store from our previous Gananoque site, but have at least tripled sales. When the Thousand Islands Charity Casino opened here in 2002, it was a real boost

for Gananoque. It also meant an increase in traffic, not just in the summer.”

Alex’s family also helps him keep up with the ever-growing business. His wife Milla and son Andriy are both important members of his team, which is rounded-out by carefully hired employees.

“We have a good staff, and I’m very careful with hiring,” says Alex. “I check and train carefully. I also follow-up with ‘Merchant Best Practices’ inspections – but I actually do those every day. It helps me sleep better at night.”

Alex has found the perfect recipe for success – the right mix of access, speed of service and attention to details. As his market continues to grow, Alex’s new site is well-positioned to grow with it.

ALEXANDER KLINKO, Site 257 at 560 King Street East, Gananoque

Alex Klinko’s new Gananoque Snack Express site.

Pioneer’s first location, Upper James Street,

Hamilton – 1950s.

PG 6

PIONEER PEOPLE

St. George (Site 231) Retailers Nimer “Tiger” Qeblawi and Lina Kilani have sold countless lottery tickets, but were very surprised to learn that an Encore ticket sold December 17, 2005 was a big one-million-dollar winner!

The Ontario Lottery and Gaming Corporation (OLG) awarded Lina and Tiger with a $1,000.00 cheque of their own for the winning ticket sale. The happy Retailers and their staff celebrated on January 27 of this year.

Mike Dietrich, Manager, Car Wash Operations andFacilities Maintenance

With over seventeen years of solid experience behind him, Mike is well-prepared to assume Bob Reid’s previous role, as Bob assumes Pioneer’s construction and development portfolio.

Mike operated a Sunoco-branded retail site for several years and was also a Sunoco BDA. Most recently, Mike managed the car wash

operations and merchandising programs for Cango Petroleums. He joined Pioneer on July 31, 2006, and is already covering a lot of ground.

In the coming months, Mike will be helping Retailers prepare their car washes for winter weather, plus overseeing installation of four-digit price signs and video at the pumps, with approximately sixty installations planned for the year ahead.

Kim Hoang, Loyalty/e-Marketing ManagerKim is the new face in Pioneer’s Marketing Department, taking

on her newly created position with the objective of maximizing the potential of the Electronic Bonus Buck (EBB) program.

“I’ll be working to understand customer demographics and to differentiate our offering. We’ll use this information to strengthen our relationships with customers, to better-understand them and

provide more meaningful offers as part of our marketing efforts,” Kim says.A graduate of McMaster University, Kim has spent the last nine years in several

e-marketing/commerce roles – first with RBC and more recently with the Loblaws e-commerce group and President’s Choice Financial marketing group for MasterCard. Kim joined Pioneer on July 26, 2006.

Jenna Hunter, Fuel DepartmentJenna’s responsibilities within Pioneer’s Fuel Department

include entering detailed information in fuel delivery sheets and coupon reconciliation.

It’s her first time in this type of Head Office working environment, and her enthusiasm for her new position will go a long way. Jenna started her new position on June 12, 2006.

Christine Waddell, Junior AccountantChristine is responsible for journal entries and assistance with

the accounting department’s spreadsheets. She began her new position on August 8, 2006. Prior to joining Pioneer, she worked with Hamilton, Ontario public accounting firm Lugowy Associates, handling a range of accounting, billing, personal/corporate tax and reception duties. We welcome her to our Accounting Department!

New Faces

Million-dollar ticket sold in St. George

New dealer site in Welland

We’re proud to welcome Ahmad “Eddy” Hoteit to Pioneer’s dealer network, at Site 256 located at 90 Lincoln Street West in Welland.

The new self-serve site opened on December 15, 2005. It features 2,010 feet of convenience retail space plus six pump islands and diesel.

Pioneer Dealer Eddy has big plans for the expansive three-acre site. “We’re starting work on a coin car wash, and we’re planning a Country Style counter with drive-through for the winter. We’re maximizing the site’s potential,” he says.

Site 256 customer William Holowalz was the winner of $200 in free gas this June during the Stop in & Save contest promoting the opening of the site.

New C.F.P. designation for Kristine Beaupré

Congratulations to Kristine Beaupré, Vice President Administration for The Pioneer Group Inc. Kristine recently passed the rigorous Certified Financial Planner exam, which sees less than half of candidates pass. Kristine can now use the designation C.F.P. as well as her current C.A. after her name.

90 Lincoln St. W., in Welland

PG 7

PIONEER IN THE COMMUNITY

Minden Retailer Niyamat “Nemy” Gowani (second from right, above) and her staff at Site 242 held a Customer Appreciation Day on April 29 as part of their efforts for Pioneer’s Give What You Can campaign. The enthusiastic group raised a total of $1,087.04. Congratulations to Nemy and her staff for a terrific job! A few sites raised more than $3,000 during the campaign.

From April 17 to 30, the Give What you Can campaign raised $80,000.00 towards the four Ontario Children’s Hospitals.

Pioneer has now contributed over $660,000.00 to Ontario Children’s Hospitals since 1985.

Pro angler Mark Rorke is powered by Pioneer in this year’s Canadian Fishing Tour, televised by WFN.

Pioneer’s sponsorship provides the gasoline Mark needs to effectively

compete, especially when some tournaments demand covering over sixty miles on the water. Mark’s bass boat, shown at left, boasts a Pioneer logo that encourages inquiries from tour crowds.

Mark has even met the families of Pioneer Retailers at tour stops!

Learn more about Mark on his website at www.stcatharinesbassmasters.ca/memmarkrorke.htm

Pioneer powersMark’s pro fishing

Downtown Hanover, Ontario danced to the beat of the Hanover Sights & Sounds Festival, held July 27 to 29. The festival included a well-attended car show, with Pioneer acting as a major sponsor. Hanover Retailer Rick Barrie (Site 241) and his wife Lisa kept Pioneer’s brand front and centre throughout the event. Lisa (above right) took a moment to pose with a show-stopping pink 1959 Cadillac Coupe de Ville hard-top. And yes, that’s a T-shirt promoting the network-wide roll-out of our Electronic Bonus Bucks she’s wearing. Thanks, Rick and Lisa!

Give What You Can Minden success Pioneer backs Hanover car show

The Retailer ExPress is a publication for Pioneer Retailers and Head Office employees.Please forward your comments, suggestions or story ideas to:

Geoff Hogarth, Editor. [email protected] Hill, Assistant Editor. [email protected]

Tel: (905) 639-2060Fax: (905) 639-2490www.pioneer.ca

06052PG 8

Anniversary PostersOur huge 50th Anniversary commemorative posters have

been warmly received. You’ll find these nostalgiac posters at all of our Pioneer-branded sites.

The posters brought back many nostalgic memories amongst our Retailers, staff and customers ... and given those who are new to Pioneer a sense of the pride we all take in our tradition of service – a tradition five decades long!

As part of our 50th Anniversary celebration we have produced specially crested knit shirts, sweatshirts, jackets and caps that are all available now. A new parka will be introduced later this year.

Our Pioneer people can now wear our Anniversary logo proudly to show their support of this important year. Please refer to Uniform Policy Update – Bulletin 2006 024 for details.

One of the program’s objectives is to be able to acquire and use demographic information, Dave notes. “We can now design effective, meaningful incentives. We’ll be doing this with the help of our newly hired Loyalty/eMarketing Manager Kim Hoang [see New Faces on page 6]. We can learn what customers want, and reach them at the right time.”

The EBB program also makes new strategic marketing partnerships possible, Dave says. “It affords us the opportunity to introduce programs with coalition partners to enhance the value of the overall proposition to customers.”

Retailers and Attendants also benefit from the new EBB program, Dave adds. “Our new Retailer incentive program is intended to get cards out to those who really want them. We’re focusing on customers who are likely to be frequent participants, and encouraging them to register their card.

“The Retailer and their staff are ultimately the ones who will make the program a success,” Dave says. “For the first eight weeks after launch, locations will be Mystery-Shopped to determine if our people are wearing their EBB T-shirts, and if they’re asking customers if they want to participate and register. Attendants can win an award up to $50 per Shop. We’ve also created a station-level competition offering five prizes ranging from $250 to $1,000 for self-serve sites, and three prizes in the same range for full-serve sites. The awards are based on Mystery Shop performance and success in getting customers to register.

Three key suppliers are providing valuable assistance during the roll-out. KESM Transaction Solutions Inc. of Aurora, Ontario provides host services for the EBB program, integrating the Bulloch system with the LoyalMark loyalty application. Toronto-based Foxx Advertising & Design Inc. has created the program’s dynamic visual identity and branding. Tann Marketing is providing help desk and fulfillment. Special thanks to the EBB Committee team for all of their hard work!

EBB now network-widecontinued from front page

Uniform Update

The winner of Pioneer’s $1,500 Free Gasoline Contest from our August 4, 2006 draw is Mr. Rex Somerville of Belleville, Ontario. Congratulations, Mr. Somerville!

Free Gasoline Contest winner