Petroleum retailer BP had an exceptional year in 2012, which it attributes to a combination of industry-leading fuel, convenience and retail offerings.
The company sold more fuel and coffee than its counterparts, and recorded a strong financial performance. Overall, revenue in the year to December 31 was up 2.5 per cent to $3.59 billion.
And that was in a year where the industry overall saw little volume growth. In the year to March, the company reported 11 months of year-on-year volume increases for combined diesel and petrol volumes.
Volumes, on a rolling year-to-date basis, ended the period 6.9 per cent higher, compared with growth of 0.9 per cent for the rest of the industry.
BP has been retailing in New Zealand since 1946. It currently owns 80 BP Connect sites and has a chain of 120 BP branded independent retail outlets, as well as a fully integrated supply chain that includes a national network of terminals, logistics and distribution and trucking services.
The company beat its 2012 earnings target. Including fuel supply agreements BP has in place with Gasoline Alley and Foodstuffs, retail sales channels provided 70 per cent of its total profit in 2012.
The AA Smartfuel offering rolled out in late 2011 and early 2012 has delivered 25 per cent more transactions than the AA Rewards programme it replaced. That implies an annual volume improvement of 46 million litres and goes a long way to mitigating the discount supermarket fuel docket programme the company ended in December.
Quality, convenience
BP says its retail success is built on providing customers a quality service, including a range of premium fuels, a competitive convenience offering and a first-class café experience.
The firm says its slate of premium fuels, including BP Ultimate 98 and BP Ultimate Diesel, is a key point of difference in the industry and an important part of the company’s strategy to snare a disproportionate share of premium fuels growth.
Convenient locations are a major driver of fuel purchases and BP has worked hard the past year improving and refreshing its food and convenience store offering.
BP holds the title as the largest retailer of barista coffee in New Zealand. The Wild Bean Café - located at all BP Connect sites - has improved its performance in terms of sales and margin each year for the past consecutive three years , representing an increase of 580,000 units of coffee, a 13 per cent increase in food margin, and a 6 per cent increase in sales.
In the past year the firm added free Wi-Fi, more comfortable seating, outdoor seating and large digital screens, to improve its customers’ experience.
The refresh of the BP Connect stores – already larger than those of most competitors – has seen transaction site counts increase 2 per cent, store transactions by 1 per cent. The net profit of convenience retail grew by 49.3 per cent, underlying convenience profitability by 28 per cent, and 54 per cent higher sales per week were recorded than the rest of the industry.
BP’s independent global brand tracking found that in the fourth quarter of 2012, BP made the best gains in terms of being seen as a successful company and having a quality product and service compared against other petroleum retailers. According to a recent survey conducted by TV3’s Target show, BP was rated first against rivals Z Energy and Mobil in terms of service, value and toilet standards.
The Energy Retailer of the Year award category is sponsored by Chapman Tripp.