Oil Companies Leaving Retail Behind

Jul 22, 2003
George Anderson

By George Anderson

Shell, ConocoPhillips and Marathon Oil are three oil companies that have decided to leave the retailing to retailers.

According to a Houston Business Journal report, these and others have
been turning over company-owned properties to multi-store operators (MSOs) in
the face of “an increasingly-tough uphill battle trying to compete with heavily-subsidized
gasoline marketed by big grocery and discount chains.”

Barbara Stoyko, who manages the MSO program for Shell Oil said, “Shell has seen worldwide that markets don’t return from this level of competitiveness.”

Shell expects to reap savings of approximately $100 million through its MSO program. Ms. Stoyko said, “There are certain things we do better at the macro-level, while other, more entrepreneurial things are done better at the site level.”

Moderator’s Comment: How will the continuing addition
of pumps to big box stores impact the convenience/gas store industry business
in the years ahead? Is it possible for small store operators to compete effectively
against big box competitors?

The MSO sites promise to be more nimble in reacting to
competitive situations than they were in the company-owned environment. It’s
hard for us to see, however, how they will be able to be much more price-competitive
than when they were company-owned.
Anderson – Moderator

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