Contaminated fuel: short term publicity blip

Grocers are at the center of the fuel fiasco, which has caused chaos for thousands of drivers after they filled their cars with contaminated fuel. This will not only prove costly in terms of repair bills but could prove damaging to the grocers' brands in the short term. However, the low prices and convenience of the grocer's forecourt will eventually draw customers back.

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European service stations: competition ever fiercer

Fierce competition and squeezed margins are making significant changes to the structure of the European forecourt retailing market. These changes include increasing market consolidation, certain large oil companies exiting selected markets and a decrease in the overall number of service stations. Furthermore, these trends are set to continue.

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PKN Orlen/Lukoil: clash of the great eastern European fuel retailing titans

Polish oil giant PKN Orlen is beginning to flex its muscles on the eastern European service station market. Most recently, it has been reported that the company is seeking to purchase the Esso petrol network in the Czech Republic from ExxonMobil. However, PKN Orlen's plans are likely to clash with those of Lukoil, which has also been expanding aggressively in this region.

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Petrom: rationalization not expansion needed

Petrom has revealed that it has a budget of E110 million to invest in building new service stations and renovating existing sites. However, the greater focus should be on the renovations given the relatively low average throughput of Petrom's service stations at present.

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Rompetrol launches brand new name in French fuel retailing

Rompetrol has announced that it is to apply the Rompetrol brand to a French highway service station and plans to use it as a test case before further rollout of the name. This step is certainly prudent but, ultimately, the price of the fuel and the location of the chosen sites will be the core drivers of its retail success, with the brand having minimal bearing on motorists' decision to visit.

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Shell: using brand capital in Ukraine

Shell has signed a joint venture agreement with Alliance Group in Ukraine that continues the company's recent strategy of investing in high-growth retail markets through partnerships. This policy allows Shell to capitalize on its brand while minimizing investment; a prudent move should these growth markets experience the same competitive pressures currently affecting Shell in its western markets.

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European service stations: more advertising space should be devoted to fuel cards

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Alpha Airports: takeover heralds further consolidation

Alpha Airports has approved a GBP193.6 million takeover by Italy's Autogrill. Autogrill's proposed purchase of Alpha Airports follows a week of activity, which has seen fast-food operator Autogrill building up its stake in the UK-based airline services firm. The move will provide Alpha with necessary scale on a global level to compete in the fast-growing and consolidating airport services market.

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MOL: targeting Romania's wealthy with new forecourt concept

MOL Romania has begun a project to build restaurants at some of its busiest service stations. Providing customers with restaurants equipped with internet access should enable the MOL unit to gain an advantage over its competitors. Nevertheless, given the developing nature of Romania, MOL should tread carefully and focus its efforts on the wealthier and busier metropolitan areas of the country.

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Forecourt shops boost revenue, but fuel-only customers must be kept in mind

Fuel retailers' drive into convenience retailing is reaping rewards in many European markets. However, for around 50% of visits to European forecourt sites with shops, motorists leave with fuel but no extra purchases, suggesting that there may now be too many forecourt stores. Investment in shops should thus be made prudently, and convenient payment channels for 'fuel only' shoppers encouraged.

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