Retailers operating Shell’s 570 company-owned sites are facing an uncertain future following the unveiling of plans for a new multi-site contract at roadshows around the country.
Shell’s latest strategy is for its company-owned sites to be run in groups of about six, operated by one organisation – be it as a sole trader, partnership or limited company, or large group.
Current Shell operators – and anyone else who might be interested – are being invited to apply for the deal, which will involve a three-stage assessment process.
Simon Grimsell, Shell’s retail sales manager for the UK and Ireland, said the advantage for a retailer as a multi-site operator would be the enhanced earnings opportunity. “The advantage for us is that we get the best, most entrepreneurial retailers, who are aligned with delivering Shell’s value proposition and can drive the business forward.”
The new contract – the Global Retailer Business Agreement – will be rolled out from September and the process should take a year to complete.
With the prospect of around 100 clusters, many retailers fear they will soon be out of a job. “It was a bombshell,” said one. “There are people who have been with Shell for 10 or 20 years, and we were sitting in a meeting with about 100 people, knowing that five in every six of those people will be out on their backside with three-months notice. It’s a cost-cutting exercise and standards will deteriorate.”
Meanwhile, Shell is also reviewing its dealer deal. The oil company has around 300 dealers having reduced its network by around 100 in the past year.
“The challenge is to make sure we have a consistently profitable dealer channel,” said Grimsell. “We’ve been spending a lot of time in the past six months or so looking at how we can go forward in the dealer marketplace.
“One of those is options is looking at Platts as a base proposition. It’s something we are evaluating, and is part of the feedback we’ve had from our ongoing discussions with of dealers. A number of them have expressed interest in that as a type of deal.
“We have to come up with a deal that works both for us and our dealer partners, to ensure they want to be with us.”