BP Station Owners Anticipate Long-Term Harm to Sales
NEW YORK -- Independent BP station owners and distributors who have weathered boycotts, protests and angry customers are counting on BP to rehabilitate its image, but do not expect fast relief from the sales hit they've endured, according to a report by The New York Times.
"You don't have a problem like this and have it go away overnight," Tom Bower, who owns some 30 BP convenience stores in Georgia and supplies BP-branded gasoline to others in the state, told the newspaper. "It's going to take a lot of work, but hopefully they'll persevere."
Sales remain down at BP stations nationwide, according to the report, with some operators experiencing severe declines and others feeling little or no effect. Still, the persistent hit to sales is lower than industry observers had expected, according to the report.
Tom Kloza, chief oil analyst for the Oil Price Information Service, told the newspaper sales for major BP distributors and retailers tumbled 10 percent to 30 percent early on, depending on store location. Kloza now sees an average decline of roughly 5 percent across the board.
"It peaked in late June, in terms of the damage and the backlash," he said. "Most of the people are coming back."
Still, anxiety and dissatisfaction is high among BP retailers and distributors, with some complaining about a lack of PR effort explaining to the public that station owners are independently owned businesses with only an inadvertent connection to the disaster.
"They're on TV all the time
The company's public relations efforts were primarily focused on providing signs and point-of-sale materials to station operators identifying them as local businesses, according to BP spokesperson Scott Dean.
"We would hope that customers wouldn't take their frustrations out on station owners," he told the newspaper.
BP also offered convenience store owners and distributors small discounts on fuel and a break on credit card fees.
Jayendra Patel, operator of a BP-branded convenience store, the Umatilla Quick Stop, in Florida said his sales are down nearly 50 percent in the wake of the oil spill.
"They've gone somewhere else. I can do nothing," Patel said. "We put signs out saying we are part of the community, that we have nothing to do directly with BP. It still doesn't help."
The drop in gasoline sales badly eroded traffic into his store, where he makes all of his profits, he said. He dropped prices, even on cigarettes and beer. "We make nothing on the gasoline, but it brings in the people," he said.
With most station owners' profits coming from in-store purchases, rather than gasoline sales, it remains unclear how any compensation will be calculated.
BP sold about 150 million gallons of refined products to service stations, wholesalers and other customers each day of 2009, much of it in the United States, according to its latest annual report.
Some retailers and distributors have called on BP to convert its stations back to the popular Amoco brand, which it displaced after a takeover in 1998. "We have no intention to switch brands," Dean told the newspaper. "The BP brand is here to stay."