Oil companies in India have also recognized the potential in converting the petrol pumps into a retail chain. They feel that the non-fuel revenue from retailing activity will be a blessing Globally, international oil majors are walking up to the potential of pushing non oil revenues through convenience stores at petrol pumps (C-stores). The oil companies in India have started emulating this trend.
Already several such petrol pump retail stores have taken shape in the country. They stock both convenience goods and shopping goods – from bread to birthday gifts, and from toys to flowers. Reports indicate that the oil companies already become big corporate customers for products like Coke.
In fact, all the oil companies up large multi-function pumps on the highways, called jubilee retail outlets. These stations are a combination of a motel, restaurants fuel station, C-store and even amusement facilities.
All the oil companies have also plants for running for running automated teller machines (ATMs) and internet kiosks at the petrol pumps, offering motorists the facility for drawing cash out of their bank accounts and for checking their mail and browsing the net. It seems the day is not far when the oil companies will take a leaf out of TISCO, who have been using the punch line. We also make steel in their corporate ads, and state saying. We also sell oil.
The stores remain open round the clock. They stock a variety of goods from soft drinks to fast foods and include a variety of impulse purchase products. The products on sale exceed 15,000 items.
HPCL Retail Chain:
HPCL’s C-store at the busy Turner Road junction in Bandra, Mumbai’s market suburb is one of the most successful C- stores in the country today.
With a turnover of over Rs 1 lakh every day, the store branded as HP Speed market, has become a benchmark for the oil companies in their endeavor at converting their petrol pumps into retail stores.
HPCL, which has about 4,310 pumps al over the country, has set a definite target for increasing its non-fuel income. It aims at a fuel to non fuel income ratio of 1:1.
It seems that HPCL is almost seeking to transform itself into an FMCG (fast moving consumer goods) retailing company!
BPCL Retail Chain:
BPCL’s Shell on linking road, Mumbai is a setting in pop music videos. It serves as a testing ground of the latest products from several companies manufacturing cosmetics, greeting cards, foodstuffs, juices and dairy products.
BPCL currently has about 35 C-stores and is planning to put up 150 more in the next year.
BPCL is also planning to start quick service restaurants and dhabas at the pumps. The idea is to give customers what they want. In the city pumps, coffee shops will be provided wherein the customers can graph a quick tea, coffee or snacks on the highway pumps, dhabas will be provided wherein the truckers can have a full meal.
BPCL has tied up with McDonald’s for opening and running restaurants at select petrol pumps across the country. The first such restaurants opened on the Delhi-Agra highway in October 2000.
Pepsi currently retails its soft drinks and snacks for more than 400 BPCL outlets.
BPCL is also launching a discount grocery chain at its urban petrol pumps. The chain will function as the neighborhood grocery store and stock basic grocery items used by 90 per cent of urban households, and will offer these at discounted process. A pilot project is operating in Bangalore.
BPCL has tied with large FMCG, companies like Hindustan Lever. Hey are supplying good to these stores at the same price at what they offer the goods to their stockists.
The stores will be different from the air conditioned convenience stores that oil companies have been putting up at their petrol pumps over the past three years.
Price will be to key differentiator and the company hopes customers will choose from the catalogue and order their monthly grocery requirements from these shops.
The new stores branded ‘In and Out’ offer services like telephone and electricity bill payments and even cinema ticket sales. Among the newest services on offer are laundry services through Hindustan Lever’s launderettes. The idea is to have minimum capital investment but offer a range of services.
Logistics are the core competences of oil companies. They also have the advantage of real estate at thousands of locations all over the country. They are now trying to leverage these strengths.
BPCL plans to increase its non oil profits to 10 per cent of its total profits in the next three years.
BPCL, with a network of 4,000 stations across the country has opted to rely on the expertise of its international partner, Shell, to develop the one stop stores.
Shell has 38,000 branded retail outlets- select convenience stores outside the US.