As the majors continue to pull out of Wales, so a revitalised brand comes onto the scene offering rural Welsh retailers a fuel supply and support whatever their volume.
The Dragon brand from NWF Fuels, which supplies a portfolio of 88 sites including 65 Texaco dealers, eight NWF and three Lincolnshire Fuels branded forecourts, has been rebranded to create “a credible alternative to the majors” in Wales.
NWF acquired Dragon Petroleum Ltd in 1994 and there are currently 12 Dragon-branded rural forecourts in North Wales. The logo had previously comprised a red dragon on a white background, but a new strategy to create a national brand for Welsh retailers has led to a redesign incorporating the Welsh flag.
NWF’s decision to redesign Dragon and market it as a national brand in Wales is in response to the majors’ withdrawal from the region. “The majors are not making money from selling fuels so they’re rationalising their networks and moving towards higher volume sites, and what that does is create a niche market for ourselves – a niche market that’s getting bigger,” explains Kevin Kennerley, managing director of NWF Fuels, Texaco’s largest authorised distributor in Europe.
“What we’ve found is where two or three years ago we were looking at sites that did about one million litres per annum, we now find that there are opportunities of up to three million litres. And we’re doing deals with sites of that size.”
Kennerley adds that this has created something of a vacuum around the one million mark or less in areas where an oil company brand is not appropriate – such as on a site where there is no canopy, low volume or is outside of the oil company’s preferred marketing areas.
“We think Dragon is something we can offer throughout Wales to people who are having difficulty with their major supplier,” says Kennerley. “It will be a national brand supplied by a local company, so retailers are getting a friendly, personal service linked to a brand that has got great appeal either to local people living in Wales or to tourists. It appeals to a patriotic community – they love the Dragon and the Welsh flag.”
The new Dragon logo has been in development for some time because NWF was waiting to trial it on a site that was formerly major branded – either Esso, BP, Shell or Texaco. “We wanted to see how it would stand up in terms of volume against a major brand, so that we’d have a true comparison,” explains Kennerley.
“The actual signage evolved in conjunction with people in the area. They said that if you’re going to put the dragon there, why not make it as near as the flag as possible. It’s not a coincidence that the colours are similar to Texaco’s and Dragon retailers will receive the same working standards as our Texaco dealers. We’re still looking for people who want to use the Texaco brand but Dragon is a credible alternative in Wales.”
There are no volume restrictions for Dragon, and Kennerley says that the company will look at each site on its own merit: “If we see an extremely rural site for example and we feel it would benefit from Dragon, providing it has a number of profit centres and we can see it’s got longevity and is not going to fall by the wayside we would offer the retailer Dragon.”
Len Hamilton, retail development manager at NWF Fuels, says: “Of our alternatives to the Texaco star, Dragon has far more to offer because it’s national. We’re out there driving round every country road in Wales and we’ve seen so many small rural sites being debranded, some have closed down and some are putting in their own name, but it just isn’t working and I think this is the opportunity for them.
“You see people who are buying from a recognised supplier and decide to go their own way and buy, one assumes, on a price-only basis with no support, but unfortunately they seem to be the sites that are falling by the wayside more than any others.”
Kennerley says that NWF Fuels can offer retailers a flexible delivery service. “Some are used to only buying artic loads in the past with all the constraints that has, but we can offer some flexibility,” he says. “We run all different sizes of vehicle so we can deliver what they require rather than what is imposed on them.”
In terms of contracts, NWF offers five-year contracts that cater for the individual’s needs. “We will tailor the offering to what our customer wants. We listen to them and what they are looking for, and try to tick all the boxes,” asserts Hamilton.
The company has been offering Cost Plus deals, similar to Platts, for a number of years, and this is proving the most popular with its dealers. “If someone is used to having a margin deal, then we’ll do that sort of deal, but if someone is used to Cost Plus and that’s what they’re comfortable with, then we’ll design that for them – we try to be flexible,” says Kennerley.
According to NWF, the market in Wales is fairly disparate but the company is positive about the future of independents. “Supermarkets have gained more market share than the oil companies anticipated and have drawn it mainly from the oil company networks, but we’ve found that our marked volumes have held up incredibly well,” says Kennerley. “The majority of our sites are showing volume increases year on year.
“In the industrial areas of the big cities the market is no different to England, but in the seaside towns it’s very seasonal – you can double your volume in the summer months,” he adds. “But in certain parts of mid Wales the supermarket prices are a little bit more relaxed so the market is a little better in general than it would be perhaps in the northwest of England which is extremely price competitive.
“But it is a very difficult time at the moment because oil prices are so high and getting higher daily. We’ve felt the pressure in our department with a lot of dealers ringing up not wanting to break the 80p barrier. Now we’ve gone into the 80s the tension has gone and the pressure is off.”
Success of the new Dragon branding will ultimately be determined by the number of sites NWF has in a years’ time. But with 12 already signed up, and three in the pipeline, the company is optimistic. “There’s no reason why we can’t lift this brand to 25 during the course of the year,” says Kennerley.
“There are lots of really good businessmen out there who are working really hard and put a tremendous amount of effort in. We want to meet these people and offer Dragon as a credible alternative to the majors.”