Post on 27-Jul-2018
transcript
Sensible solutions – Delivered by specialists
RPS Energy
Fuel Retailing –Tough Choices to
Drive Future Success
RPS Energy – Who we are and not ? is this taking too
much space and also, how long should a title be ?
Sensible solutions – Delivered by specialists
What We See Happening in The Industry
Sensible solutions – Delivered by specialists
• Decline in fuel demand
• Growth in shop sales
• Growth in food and coffee offers
• Refinery margins under severe pressure
• Retail margins declining in many markets
• Reduced profitability and pressure to improve returns
• Oil majors reducing their participation in some markets
How do oil retailers respond to these challenges ?
RPS Energy – Who we are and not ? is this taking too
much space and also, how long should a title be ?
Sensible solutions – Delivered by specialists
Tough Choices
Sensible solutions – Delivered by specialists
RPS Energy – Who we are and not ? is this taking too
much space and also, how long should a title be ?
Sensible solutions – Delivered by specialistsSensible solutions – Delivered by specialists
Need to Make a Clear Choice on Offer and Brand
Positioning – 2 Choices
Option 1: Low Complexity & Low Cost Model
• Fuel focused, low complexity
•Low fuel price (in unregulated markets) to drive higher volume
•Tight cost control
•Channel of trade –Dealer reduced complexity & costs
• Site could even be unmanned
Option 2: Higher Complexity, Higher Cost Model
•Fuel and non fuel (shop & food/coffee) offer
• Consumer offer based on distinctive offer, service and added value
• Channel of trade could be directly managed Company operation, to capture 100% of margin
•Could involve 3rd party c store/food brands to deliver more complex non fuel offers
RPS Energy – Who we are and not ? is this taking too
much space and also, how long should a title be ?
Sensible solutions – Delivered by specialistsSensible solutions – Delivered by specialists
Examples of Low Complexity, Low Cost Model – Tinq,
NL’s
RPS Energy – Who we are and not ? is this taking too
much space and also, how long should a title be ?
Sensible solutions – Delivered by specialists
Examples of Low Complexity, Low Cost Model – Tinq,
NL’s
Sensible solutions – Delivered by specialists
RPS Energy – Who we are and not ? is this taking too
much space and also, how long should a title be ?
Sensible solutions – Delivered by specialistsSensible solutions – Delivered by specialists
Examples of Low Complexity, Low Cost Model – Tinq,
NL’s
RPS Energy – Who we are and not ? is this taking too
much space and also, how long should a title be ?
Sensible solutions – Delivered by specialists
Examples of Low Complexity, Low Cost Model – 123,
Lithuania
Sensible solutions – Delivered by specialists
RPS Energy – Who we are and not ? is this taking too
much space and also, how long should a title be ?
Sensible solutions – Delivered by specialists
Examples of Low Complexity, Low Cost Model – Statoil,
Latvia
Sensible solutions – Delivered by specialists
RPS Energy – Who we are and not ? is this taking too
much space and also, how long should a title be ?
Sensible solutions – Delivered by specialists
Examples of Low Complexity, Low Cost Model – Statoil,
Latvia
Sensible solutions – Delivered by specialists
RPS Energy – Who we are and not ? is this taking too
much space and also, how long should a title be ?
Sensible solutions – Delivered by specialists
Examples of Low Complexity, Low Cost Model – JET, UK
Sensible solutions – Delivered by specialists
RPS Energy – Who we are and not ? is this taking too
much space and also, how long should a title be ?
Sensible solutions – Delivered by specialists
Examples of Low Complexity, Low Cost Model – JET, UK
Sensible solutions – Delivered by specialists
RPS Energy – Who we are and not ? is this taking too
much space and also, how long should a title be ?
Sensible solutions – Delivered by specialists
Examples of Higher Complexity, Higher Cost Model, BP
Connect & Wild Bean Café, UK
Sensible solutions – Delivered by specialists
RPS Energy – Who we are and not ? is this taking too
much space and also, how long should a title be ?
Sensible solutions – Delivered by specialists
Examples of Higher Complexity, Higher Cost Model, BP Connect & Wild Bean Café, UK
Sensible solutions – Delivered by specialists
RPS Energy – Who we are and not ? is this taking too
much space and also, how long should a title be ?
Sensible solutions – Delivered by specialists
Examples of Higher Complexity, Higher Cost Model, BP Connect & M&S Simply Food, UK
Sensible solutions – Delivered by specialists
RPS Energy – Who we are and not ? is this taking too
much space and also, how long should a title be ?
Sensible solutions – Delivered by specialists
Examples of Higher Complexity, Higher Cost Model, BP Connect & M&S Simply Food, UK
Sensible solutions – Delivered by specialists
RPS Energy – Who we are and not ? is this taking too
much space and also, how long should a title be ?
Sensible solutions – Delivered by specialists
Examples of Higher Complexity, Higher Cost Model-
OMV (Viva), Hungary
Sensible solutions – Delivered by specialists
RPS Energy – Who we are and not ? is this taking too
much space and also, how long should a title be ?
Sensible solutions – Delivered by specialists
Examples of Higher Complexity, Higher Cost Model-
OMV (Viva), Hungary
Sensible solutions – Delivered by specialists
RPS Energy – Who we are and not ? is this taking too
much space and also, how long should a title be ?
Sensible solutions – Delivered by specialists
Examples of Higher Complexity, Higher Cost Model-
OMV, Hungary
Sensible solutions – Delivered by specialists
RPS Energy – Who we are and not ? is this taking too
much space and also, how long should a title be ?
Sensible solutions – Delivered by specialists
Examples of Higher Complexity, Higher Cost Model-
OMV (Viva), Hungary
Sensible solutions – Delivered by specialists
RPS Energy – Who we are and not ? is this taking too
much space and also, how long should a title be ?
Sensible solutions – Delivered by specialists
Examples of Higher Complexity, Higher Cost Model- Aral
Germany
Sensible solutions – Delivered by specialists
RPS Energy – Who we are and not ? is this taking too
much space and also, how long should a title be ?
Sensible solutions – Delivered by specialists
Examples of Higher Complexity, Higher Cost Model- Aral
& Petit Bistro, Germany
Sensible solutions – Delivered by specialists
RPS Energy – Who we are and not ? is this taking too
much space and also, how long should a title be ?
Sensible solutions – Delivered by specialists
Examples of Higher Complexity, Higher Cost Model- Aral
& Petit Bistro, Germany
Sensible solutions – Delivered by specialists
RPS Energy – Who we are and not ? is this taking too
much space and also, how long should a title be ?
Sensible solutions – Delivered by specialists
Examples of Higher Complexity, Higher Cost Model,
Emarat, UAE
Sensible solutions – Delivered by specialists
RPS Energy – Who we are and not ? is this taking too
much space and also, how long should a title be ?
Sensible solutions – Delivered by specialists
Examples of Higher Complexity, Higher Cost Model,
Emarat, UAE
Sensible solutions – Delivered by specialists
RPS Energy – Who we are and not ? is this taking too
much space and also, how long should a title be ?
Sensible solutions – Delivered by specialists
Examples of Higher Complexity, Higher Cost Model,
Emarat, UAE
Sensible solutions – Delivered by specialists
RPS Energy – Who we are and not ? is this taking too
much space and also, how long should a title be ?
Sensible solutions – Delivered by specialistsSensible solutions – Delivered by specialists
Examples of Higher Complexity, Higher Cost Model,
Emarat, UAE
RPS Energy – Who we are and not ? is this taking too
much space and also, how long should a title be ?
Sensible solutions – Delivered by specialistsSensible solutions – Delivered by specialists
Option 1: Low Complexity & Low Cost Model
• Fuel focused, low complexity
•Low fuel price (in unregulated markets) to drive higher volume
•Tight cost control
•Channel of trade –Dealer reduced complexity & costs
• Site could even be unmanned
Option 2: Higher Complexity, Higher Cost Model
•Fuel and non fuel (shop & food/coffee) offer
• Consumer offer based on distinctive offer, service and added value
• Channel of trade could be directly managed Company operation, to capture 100% of margin
•Could involve 3rd party c store/food brands to deliver more complex non fuel offers
Being in the Middle is Challenging & Becomes Difficult as
Markets Evolve
Medium Complexity
& Medium Cost
RPS Energy – Who we are and not ? is this taking too
much space and also, how long should a title be ?
Sensible solutions – Delivered by specialists
But not as Difficult and Dangerous as Having a Low Complexity Model with a High Cost Base……
Sensible solutions – Delivered by specialists
• So if the market structure/evolution favours a low complexity model,
need to focus on:
– Developing a simplified site offer
– Reducing capex costs to build the sites
– Choosing the right channel of trade to operate the sites
– Reducing operational costs to operate the sites
– Making sure overhead costs to support the business are not
high
RPS Energy – Who we are and not ? is this taking too
much space and also, how long should a title be ?
Sensible solutions – Delivered by specialists
Delivering a Higher Complexity, Higher Cost Model
Sensible solutions – Delivered by specialists
• Means you have to create and deliver
– A distinctive site offer….
– That drives strong fuel volumes and fuel margins…
– That drives strong sales from shop and food/coffee sales…
– And an operational model that means high sales translates into
high net profit
RPS Energy – Who we are and not ? is this taking too
much space and also, how long should a title be ?
Sensible solutions – Delivered by specialists
Tough Choices to Drive Future Success – A Summary
Sensible solutions – Delivered by specialists
• Markets are at different stages of evolution, but ultimately will face similar challenges
• We believe success lies in making clear ‘tough’ choices on which model/option is appropriate:
– Option 1: Low Complexity & Low Cost Model
– Option 2: Higher Complexity, Higher Cost Model
• Then reorganizing your site offer and business model to fit the model you have chosen & relentlessly pursuing that model over time
• Think about this issue now, and plan proactively vs. waiting until you have a problem, then reactively making changes