International News: BP Tackling Inconsistency across its Dealer Network

LONDON -- BP is offering a new convenience store fascia to its independent dealers in an effort to develop a consistent brand and shop offer across its entire company-branded retail network in the United Kingdom, according to a report by Datamonitor. The new dealer offer, BP Essentials, should help the company raise the profile of its overall convenience retail business while also strengthening its relationship with its dealers.

As part of the offer, BP will provide support to the dealers for procurement, category management, and marketing. According to the report, stations with a store area of more than 25 square meters and fuel sales of more than 3 million liters are also eligible to implement BP's food service concept, Wild Bean Cafe.

Around 300 BP-owned service stations feature shops under its own brands -- BP Connect and BP Shop -- and around half of those also feature co-branded M&S Simply Food shops. While BP has invested significantly in the development and marketing of these shop formats -- with high traffic sites benefitting the most -- its dealer network, which accounts for a large proportion of BP-branded sites, remains unaffected. Datamonitor said over 70 percent of all BP-branded gas stations in the U.K. are owned and operated by dealers, many of which independently operate forecourt convenience stores without much support from BP. These stores are often operated under symbol group brands such as Spar and Budgens, thereby offering varying retail propositions.

Consequently, the resulting inconsistencies in the quality and range of the shop mix across service stations branded under the same oil company have served to create an unfavorable consumer perception and vague expectations. Indeed, Datamonitor's consumer research shows that motorists perceive forecourt stores at Tesco service stations to be the best in terms of quality, with Shell ranked second, and BP and Esso jointly sharing the third position. Consumers' predisposition toward supermarket brands for convenience products coupled with inconsistent shop strategies make it more challenging for fuel retailers such as BP to fully exploit the growing opportunities in convenience retail, according to Datamonitor.