BP Stations Asking for Help, Too
BP has done little to repair its reputation since the tragic
accident on the Deepwater Horizon oil rig left 11 crew members dead and created
an ecological and economic disaster in the Gulf Coast. Among the innocent parties
affected by the disaster have been the thousands of independently-owned gas
stations that sell fuel under Amoco, ARCO and BP banners.
Americans across the
country have stopped buying gas at the stations as they shun anything BP-related.
Some station owners report sales declines up to 40 percent in recent weeks
and they want BP to do something about it.
According to an Associated Press report,
a group of gas distributors and station owners told BP that they want the
company to reduce the cost of gasoline and kick-in funds to help pay for an
ad campaign to help bring motorists back.
"They have got to be more competitive on their fuel costs to the retailers
so we can be competitive on the street … and bring back customers that we’ve
lost,"Â Bob Juckniess, an owner of 10 BP stations in the Chicago area,
told the AP.
"We’re their branded marketers," Mr. Juckniess said. "It would
be foolish for BP to not support its branded marketers when clearly we can
document that some of the loss that we’ve experienced is due to the incidents
in the Gulf."
For its part, BP maintains it understands the issues faced
by franchisees. "BP
is in daily contact with its independent distributors and franchisees and helping
them manage the impacts the oil spill is having on their businesses," said
Scott Dean, a spokesperson for BP.
Jim Smith, president and CEO of the Florida
Petroleum Marketers & Convenience
Store Association, said BP has given some stations in that state a discount
of a penny a gallon, which, he said, "Doesn’t amount to much."
Discussion Questions: What should BP be doing to help its franchisees in
light of the negative publicity surrounding the company? What should the
franchisees be doing for themselves?
What should BP do for its retailers? Change the signage to another name, I guess.
This is an impossible situation. On the one hand, people understand these stations are locally owned and it hurts the local community not to patronize them. But I confess, even for me, it has become impossible to stop and get gas at one of them. It’s just too much to ask.
The extent of this ongoing disaster will not be known for years,and local franchisees will join the long line of litigants. At some point, I fully expect BP to declare chapter 11 to force a maximum settlement amount (like Monsanto before it with asbestos). I won’t like it, but I’ll understand the business logic. In the meanwhile, the BP sign is “dead man walking.”
What a horrible mess.
I think the only way through this tragedy is for BP to accept all of the responsibility, whether it is completely theirs or not. People perceive that it is their fault, so regardless, BP needs to address the situation that way.
The first order of business is to communicate honestly and frequently. Second, BP needs to show real cooperation with government, real compensation for workers who have lost jobs, real preservation of wildlife wherever possible, and real regret for harms done.
In this vein, BP should offer quite a bit more than a penny a gallon to franchisees. The compensation should be nearly equivalent to pre-disaster running rates. Further, shoppers who do buy at BP should know that a very hefty percentage of their purchase price will go directly to helping restore the ecology of the area.
Will this cost BP dearly? Maybe even cost them their business? Well, yes. But, this is one of those moments that separate the men from the boys.
BP gets an F for their PR here in the US and not much better a grade for their support of franchisees. They should emphasize the local, American-owned nature of their franchises and do what seems to be the unthinkable at retail these days–apologize and take responsibility in a very public and grassroots way! Americans are forgiving, but only of those who both do the right thing and ask forgiveness.
And BP should definitely scrub their pricing. In this economy, there is a price gap where as shoppers will return to BP. In many parts of Europe BP is the lower cost gas seller and last week was priced almost 20% below Shell at several stops on this author’s trip. That kind of price gap might not be sustainable given their US operational challenges, but price promotions work in a tough economy.
BP has provided a textbook example of what not to do when disaster strikes. They have been arrogant, slow moving and uncaring. They have shot themselves in the foot more times that I can count.
The American public is mad and they are looking for ways to make BP feel their wrath. Boycotting stations that pump BP products is one way that they are making their feelings known. Unfortunately, while lashing out at BP, they are also hurting their neighbors that run and work in those gas stations.
BP should take full responsibility for this disaster and remind consumers that the BP station operators are not to blame. Unfortunately, it seems highly unlikely that BP will be able to turn the corner on this PR disaster any time soon.
I agree with the generally negative tone of most comments so far. I really don’t see how BP can fix this mess, other than the obvious–stop the oil gusher, clean up the spill and take full responsibility. I fully expected the BP boycott to start sooner in the Land of Consumerism. What else can Joe Six Pack do? Bad luck for the franchisees, unfortunately.
Under the circumstances–and they are incredible circumstances–BP is doing an exceptional PR job with their commercials on TV. They are done exceptionally well. They are using real employees. They are giving quality information. They are giving contact information and directions and vowing commitment.
Can they do more? Sure. However, they are doing far better than the government in its response, which has been abysmal at best.
Boycotting BP stations is ridiculi (Scanner’s version of plural for ridiculous!). It does nothing…nothing! It hurts local merchants that have a contract, period.
Gas is sold through pipelines and likely many other stations–regardless of where you purchase fuel–are supplied by them. And further adding to the ridiculi is that the oil spilled is not the type converted into gasoline!
If anyone needs to do more in all of this, it’s us. We need to demand that our government act on this as we would have if our country was attacked. We should be pulling out all the stops, accepting help from ALL sources and dealing with this. Instead, an expected disaster has become merely political fodder for the administration and the agencies in their charge.
BP has and is doing a good job in battling the PR against them that is coming in torrents. What they are lacking is an all out attempt by all resources available to assist, including foreign sources that have had their offers denied and still remain available.
Continued bashing of BP, boycotts, and the like do nothing to improve the situation. At best, if even minorly successful, they harm the source of help that can pay damages to those who really need it. If anything, considering that the Gulf provides 25-33% of domestic oil, all Americans should be doing everything they can to support BP by purchasing fuel so that those who need their payments can be paid. If not, we’ll pay 10 times more if the government has to deal with it in the long term.
They get a B if not an A for their attempts at a positive message and attempting to communicate their efforts against a storm that would rather have a lynching than a solution and a recovery from this disaster.
The situation BP Stations are facing is unfortunate and sad. And I must add I am one who is driving past the BP station in mild protest for the situation in the Gulf. But sit back and look at this from the larger picture view. Is there any difference between the BP Station owner losing business and the fishing industry losses in the Gulf, or the Seafood restaurant and vacation industry facing the prime season with no hope to even come close to breaking even financially?
I wish I had an answer that made some sense. Adding to this is the Unemployment Compensation payment extension being canceled. Those directly and even indirectly affected are in for some difficult times. The pebble thrown in the ocean has a rippling effect. So does this tragic situation.
I think BP has been doing a lot to repair their reputation except the media is constantly reporting this disaster so it makes it harder for BP. Whatever happens to BP will happen.
Back to the important question, how does BP help the independent operator? So far they have put a few cute ads on television. Perhaps get into a price war. Instead of 5% rebates with BP Visa, move it up to 6%. Start giving away free coffee in the stations.
I don’t think the stations were very competitive compared to some of the better regional C-store chains before the accident. Maybe now is the time to step up and make their C-stores more competitive.
How ironic that BP used to be AMOCO?
As a retail brand, BP is dead. There is no turnaround. Unlike Exxon, as a brand in a commodity market, BP had no legacy.
There are only three choices for these unfortunate retailers.
1. BP changes the brand name;
2. BP sells off the retail operation;
3. The retailers find other brands to market.
When you fall in a cesspool there isn’t much you can do to keep the people that depend on you from getting messed up too. And thus we’ve described the BP mess.
What should franchise operators do? Those innocent victims should dump BP and market another brand.
I’m sorry to say that for these owner/operators the BP now stands for bye-bye profits.
I think BP should run a series of ads that not only stresses that the stations are owned by people in their community, but also donates money locally for every gallon of gas purchased.
If they won’t do that, they might want to give the station owners a pinata of Tony Hayward.
I really don’t see how price cuts–even as far as (literally) giving away gasoline–will help much: people are boycotting BP because they don’t like them, not because their products are too costly. (Of course this is a good opportunity to test people’s emotions; we can find out if they’re unforgiving, or simply unforgiving below, say, 8¢/gallon.)
As for franchisees’ innocence: well, sure, the average station is blameless in the limited sense the word is used, but one has to wonder about the parent’s conduct before this incident…were they always this incompetent, and if they were, what would it say about operators who stayed with them?
They ought to reflag them all to Arco or Amoco, brands that BP owns, depending on the market and the preferred pricing of the site. The BP name will be an albatross with consumers for a decade. They ought to support the conversion fully. And if they don’t…those sites will be reflagged to non-BP brands just as soon as the dealers and wholesalers can pull it off.
If there is a BP Franchise owners group, they need to band together to create a new voice. They would need to put pressure on the parent company, ask for money to advertise, suggest the company split profits with charity or environmental companies, and advertise the independence of franchise owners from the parent company.
You have to feel sorry for the franchisees. It is going to get worse before it gets better. They are locked into long-term contracts to fly the brand. I know that I live in Ohio and none of the 242 BPs are corporate owned. BP is going to be forced to let them out of these contracts. Not knowing what is in them, but force majuere and how it is documented could (or should have) consideration. BPs is not going a good job. They seem to take whatever the media, puts out different information and then gets beat up when proven wrong.
They need to take the Tylenol Tack and admit they are wrong and do what they can to assist.
Yet we need to be careful and not be too hardhanded with them, because if BP goes bankrupt, then all of the cleanup will fall to us. More “change” for the American taxpayer.
BP is taking responsibility (reluctantly or otherwise) for the spill cleanup and should take the same approach to support their retail dealer network.
In a lesser way, Citgo dealers suffered a similar trauma related to the revelation of Venezuelan ownership, but the BP problem is much worse.
I have seen exactly one ad on cable TV from a local BP dealer/owner. That owner took matters in his own hands and others will have the do the same to separate themselves from the big brand. BP would be well advised to support these efforts.