BP dealers are now being courted by other brands
NEW ORLEANS (AP) — Oil has stopped spewing into the Gulf of Mexico, but BP remains unusually vulnerable to the prospect of US gas stations defecting to other brands.
In interviews with The Associated Press, station owners from Wisconsin to Virginia say BP dealers are being courted by other brands or are approaching them on their own.
While the practice is common in such a competitive business, it has become more frequent since the April 20 offshore rig explosion and spill that tarnished BP's image and led some customers to go elsewhere for gas, the owners say.
"The door was opened when the Gulf leak happened and people will pry on those emotions," said Randy Meffert, who together with his brothers owns, operates or supplies 52 gas stations in south-central Wisconsin. All but eight fly the BP flag.
BP is expected to detail its strategy to repair its brand when it meets with hundreds of fuel distributors next week in suburban Washington.
The meeting comes at a critical juncture. Sales have rebounded, but are still down at some stations that saw sharp declines after the spill, even though BP offered incentives to help them get through it.
BP owns just a fraction of the more than 11,000 stations across the US that sell its fuel, mostly under the BP banner. ARCO, a BP affiliate, is predominant in the West. Most BP-branded stations are owned by local people whose primary connection to the oil company is the logo and a contract to buy gasoline.
Those contracts can range from several years to more than 20, and BP would not say how many are up for renewal this year.
BP will not say what it plans to announce at the meeting with distributors. But two members of a trade group that helped organize the meeting told AP that, among other initiatives, BP will offer to pay for $10 gift cards for stations to give customers who buy a certain amount of gas, and it will fund a programme for stations to donate to local charities. The members asked not to be identified because the details are supposed to be confidential until announced.
It is not clear if a name change suggested several months ago by some station owners will be on the table. The idea continues to percolate, but has not resonated with a majority of owners.
Will the latest offerings be enough to keep BP station owners from leaving the fold?
Jeff Miller's company owns, operates or supplies roughly 56 BP-branded stations, primarily in southeastern Virginia. He said stations that he supplies but doesn't own are telling him they are considering switching to another brand when their contracts to sell BP gasoline are up.
"There may be a Shell or Chevron and they will go to the BP (station) and say, 'If you want to get rid of BP, we can put Shell in there,"' Miller said. "That is occurring on a fairly regular basis."
Such discussions aren't unusual, but Miller says the competition now has more ammunition.
Bob Juckniess, who owns ten BP-branded stations in the Chicago area, said the approaches from other companies are "rampant right now".
"I think it started with the disaster that happened in the Gulf, but I think it was followed very strongly by how BP handled the situation," Juckniess said.