Driving the road ahead

Accelerating growth in a changing world by making life’s journeys better, was the theme at Shell UK’s retail business plan event in Wales last month, which saw the new retail boss Bernie Williamson take to the stage at the annual gathering for the first time following the retirement of her predecessor, David Moss, at the end of 2017.

"David has brought this business to a fantastic place, with a great quality offering for both fuels and non fuels," she said. "It gives me a great platform to take the business forward to the next generation.

"I’ve inherited a great team, which is a real lever for everything we need to do this year." A key part of the agenda and indeed the conversation among the many dealers in attendance focused on future fuels, in particular electric vehicle charging, which has become an intensely hot topic in recent times.

Shell sees itself at the forefront of energy transition, and among key initiatives on safety and customer service speakers revealed what the company is doing on future fuels to stay ahead of the game; gaining knowledge and experience for whatever the future may hold. Much of it pointed to the idea of forecourts more akin to airport lounges, where customers drink coffee and eat a range of delights as they wait for their vehicles to charge.

There have certainly been some big announcements from Shell on electric developments in December the company revealed its agreement with charging network operator IONITY to offer charge points across 10 European countries. In October, it launched an on-forecourt electric vehicle rapid charging service called Shell Recharge, following an agreement to buy NewMotion, one of Europe’s largest EV charging providers. It has installed 10 Recharge units on company-owned sites, all but one in the London area. Williamson says it is still early days, although a couple of sites are performing beyond expectations. But such is the interest from retailers that Shell is looking at how to make Recharge units available for the dealer network.

Meanwhile a further two hydrogen dispensing units are about to open - one near Gatwick and one at Beaconsfield Services on the M40 to add to the installation at Shell’s site on the M25 at Cobham.

"Future fuels is a real talking point because in many ways it’s clearly unclear!" says Williamson. "While we spend a lot of time and interest talking about the future of fuels, we mustn’t forget the core business. We know that we’ll still have traditional fuels for decades to come. But we have to put our toe in the water and learn from it. That’s how we will evolve. Technology is moving quickly. It’s very early days for hydrogen the talk is all about electricity, which is easier to deliver. But will we be having a different conversation in 10 years’ time? Our challenge is to create a space that people want to stop in whatever they’re driving and that’s what we’re on a mission to achieve.

"In time traditional fuels will decline and future fuels will take over, but whatever that tipping point is, we want to retain that customer."

Shell’s retail success in recent years has earned it the right to have more capex than ever injected into the business. Indeed across the world Shell is opening new retail networks in five countries India, Russia, Mexico, China and Indonesia.

"For the UK the injection of funds means we can really invest in the network, which is very exciting. There will be 60 company-owned sites refurbished in 2018, of which some will be completely refurbished, some will be site extensions, plus there will be several knock-down-rebuilds. The reason that’s important to me is that it’s a barometer of the company’s thoughts on its own longevity, because when we do the economics for a KDRB, we’re thinking 20-odd years. So it’s a demonstration of us being in the marketplace for a long time."

Shell is also committed to continuing to work with its partners Waitrose and Budgens and there will be new additions with both brands in 2018.

"We have a brilliant network 75% of the UK population is within 15 minutes of a Shell service station," says Williamson. "The company-owned and dealer sector are equally important to our business. The strategy is sound, so our growth and development will be evolution, not revolution."

Williamson says the coming year will see more of the success of 2017, which means continued investment in the premium fuels sector. Following the relaunch of V-Power last year Shell has an enviable 60.1% share of the market (Kantar Worldpanel data). "We’re so proud to be number one on premium fuels and want to continue that journey," she says.

Meanwhile, Deli2Go is under review, with a new Deli by Shell range being piloted from March and aiming to roll out to 100 sites this year. Williamson says she is a food retailer at heart and has spent many years working in convenience food retailing: "I’m on a mission to improve the quality perception of food on the forecourt," she stresses.

"I think Deli2Go has reached a point of maturity. Shell has done a great job of getting everybody to a good uniform standard, but we want to broaden our offer and take it to the next level, with new healthier options ’beyond the sandwich’."