BP may not be at the top of everyone’s Christmas card list following what many described as an "immoral margin cut", announced rather tactlessly by email around the time its record profits were revealed in April.
But Peter Molloy, BP’s UK fuel operations manager, is extremely positive about the brand and its offer to dealers: "The timing for BP in relation to what we offer our dealers has never been better, because when we project our initiatives and programmes in the future, our brand is in good stead.
"We have a quality network and 850 dealer locations - which is 26% of dealer-branded volume and market share. BP’s total branded volume is about 15.5% - making us number one in the market in both dealer and branded volume. And average throughput is higher than the competition."
Another reason to be positive, he says, is that dealer retention is running at 90%, with 93% of re-signs saying status of the brand is one of the reasons for staying.
"This year, despite the premia increase, we’ve had our most successful period for re-signs and conversions," says Molloy. "Not only have we re-signed our existing business with Moto, but we’re actually converting its motorway business from Esso, starting next year. We’ve also re-signed Motor Fuels Ltd; and 51 sites with Malthurst; we’ve done an 85-site deal that includes a 40-site conversion with the Co-op. We’ve signed 1.2 billion litres of volume this year. The flexibility of our offer has allowed us to engage with both groups and individual dealers.
"I accept the premia increase was a tough and commercially sensitive message to get across, but I don’t think BP shirked away from its responsibilities - we still had our forums and engaged directly. But we must now focus on what we’re giving back. As our business this year shows, dealers are re-signing - and they would not sign up for any company unless it makes them money."
BP has 350 company-owned sites, based in two main areas - in the south east corner up to Birmingham, and the central belt of Scotland. These are where the development of Connect, Wild Bean Café and the M&S Simply Food formats have initially been established. The dealers fill the geography in between and the strategy is still to have national network coverage.
The major rationalisation of the BP network that saw large groups of sites sold off to the independent sector is now over, but Molloy doesn’t rule out the occasional sale. Network reviews are a constant.
However, there has recently been a restructure at headoffice that should be good news for dealers: "The structure we’ve put in place is there to provide more focused support for our dealer partners, and also help communicate our new vision of the future," explains Molloy.
"While overall retail and marketing has reduced in terms of numbers, our support in terms of the dealer business in the UK has increased, so we’ve got things like more devoted support on maintenance and territory management presence. We have a headcount of about 240 covering entire retail operations - including co-owned - but within that is a dedicated dealer operation function which is bespoke to what the dealers require and to enhance those relationships.
"Since July 1, we now call ourselves the Fuels Value Chain, which is headed by Janet Ashdown. Its role is to optimise the entire purchasing, distribution, logistics and delivery of product to the network in the most efficient manner.
"One of the most common questions we’re asked is about BP’s commitment to the UK following the sale of our refineries - since when we’ve had to restructure the whole of our refining and marketing division. BP within the UK has obviously moved from being a refiner to a marketer and we’ve had to change our organisation accordingly.
"But an exodus from the UK is absolutely not the case. There are a number of things that we’re investing in - our loyalty scheme Nectar; we’re holding a dealer convention for our dealers in Oman later this year; and probably most importantly, is our announcement in July to be the oil and gas supplier - a Tier One sponsor - for the London Olympics 2012.
"Companies like BP, if they had an exit strategy, would certainly not be investing in a commercial agreement such as this. It is certainly testimony and a clear demonstration of our commitment to the UK market. What that will bring will be enhancement to the marketing and advertising programmes that will introduce another lever of differentiation in the brand we offer.
"We have nearly five years to demonstrate that the whole positioning of the major oil and gas sponsor to the games is all about efficiency, performance and the environment.
"It is an ideal fit - BP is Britain’s largest quoted company on the stock exchange. This is the largest event that is happening probably in the history of the UK. We are a global company, this is a global event.
"We are committed to driving the best possible performance with the offer and the products and its association in alignment with the ethics and integrity of our company - it all dovetails very well. On top of this Castrol will be sponsor of the next two world cups - in South Africa and Brazil. So BP’s investment in marketing is on the global stage.
"We think it’ll all be a fantastic opportunity for dealers."
=== BP signs for London 2012 ===
BP is the latest Tier One Partner of the London 2012 Olympic and Paralympic Games. As the official Oil and Gas Partner and London 2012’s third Sustainability Partner, BP will be responsible for providing fuelling facilities for the vehicles required to keep the Games moving.
BP will also provide LPG for catering, vehicle washing facilities and technical support services, including a system for tracking and reporting carbon emissions.
BP aims to support the Cultural Olympiad, building on its extensive arts, culture and education programmes.
Tony Hayward, group chief executive of BP said: "The Olympic movement is founded on a belief in human endeavour and high performance - attributes which are at the heart of BP’s own agenda... This is a unique opportunity to engage with our own large UK and global workforce, and millions of customers we serve each day."