Twenty-four seven
It’s not every day you come across a team that can say it successfully reduced costs during one of the most turbulent economic times in living memory, at the same time as delivering extraordinary levels of brand awareness in new territories and maintaining staff morale
BP
BP
But that’s exactly what BP’s US convenience retail team has done in just three years.
Brand recognition
Ampm stores have been a familiar sight on the US West Coast for the past 30 years. Now a national brand, awareness levels have hit more than 60% in some new territories in just 12 months.
In 2006, BP’s US convenience retail (USCR) team faced some tough decisions. Sales across its forecourts were good, but with the rate of capital employed hitting $1.6 billion, the business was simply costing too much. Meanwhile, the introduction over the years of multiple convenience store (c-store) brands across different geographies had left the business unsure of what it was trying to offer, and to whom. Radical action was needed.
Three years later, the successful sale of all of BP’s US company-owned, company-operated (COCO) convenience stores is nearing completion, and ampm, the well-loved West Coast c-store offer, has gone national. While capital employed has fallen by $1.2 billion and costs have reduced by $600 million, the team has also delivered around $1.4 billion in cash proceeds. It sounds simple. Execution was anything but.
“The first thing we did was get very clear about our strategic purpose – why we existed,” says Fiona MacLeod, business unit leader of Convenience Retail Americas. “In the past, convenience retail had been organised as a standalone profit centre.” As a consequence, the business model had become too complex with BP Connect, ampm and the Wild Bean Café brands all offering customers something different.
“We needed to simplify things,” MacLeod continues, “and when we stepped back and reassessed it, we realised that our purpose is to ‘monetise’ BP’s refineries.” In other words, finding a reliable home for BP’s refined products. Linked to that, the team also recognised that successful retail operators need a strong second income to balance out the volatility of gasoline prices.
Source: BP