Frustrated by boycott, station owners want BP help
June 27, 2010 -- Tension is mounting between BP and the neighborhood retailers that sell its gasoline.
As more Americans shun BP gasoline as a form of protest over the Gulf oil spill, station owners are insisting BP do more to help them convince motorists that such boycotts mostly hurt independently owned businesses, not the British oil giant.
To win back customers, they'd like the company's help in reducing the price at the pump.
BP owns just a fraction of the more than 11,000 stations across the U.S. that sell its fuel under the BP, Amoco and ARCO banners. Most are owned by local businessmen whose primary connection to the oil company is the logo and a contract to buy gasoline.
In recent weeks, some station owners from Georgia to Illinois say sales have declined as much as 10 percent to 40 percent.
Station owners and BP gas distributors told BP officials last week they need a break on the cost of the gas they buy, and they want help paying for more advertising aimed at motorists, according to John Kleine, executive director of the independent BP Amoco Marketers Association. The station owners, who earn more from sales of soda and snacks than on gasoline, also want more frequent meetings with BP officials.
"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," says Bob Juckniess, who has seen sales drop 20 percent at some of his 10 BP-branded stations in the Chicago area.
Owners and distributors put forth their demands at a meeting in Chicago with BP marketing officials. BP's reply could come as early as this week, says Kleine, whose group represents hundreds of distributors.
Station owners are locked into contracts that can last seven to 10 years in some cases. So, switching to a competing brand if BP refuses to help may not be an option.
BP spokesman Scott Dean declined to offer specifics about the discussions when contacted by The Associated Press. "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," he said.
Gasoline retailing trade groups say the boycott's impact isn't only evident in southern states such as Florida, Georgia and Tennessee, but also in places further from the spill like southern Pennsylvania. Jim Smith, president and CEO of the Florida Petroleum Marketers & Convenience Store Association, said BP has given some station owners a one-cent-per-gallon discount, which "doesn't amount to much." Kleine told AP the discount appears limited to Florida. He declined to give the size of the discount that was requested at the Chicago meeting.
Websites and Facebook pages advocating a BP boycott popped up soon after oil started spewing into the Gulf in late April. Drivers only heeded the call when the spill's full impact became apparent.
Paola Soldevilla, manager of a BP station in Pembroke Pines, Fla., said it was only when images of oil-soaked birds appeared in newspapers that sales fell off. So sharply, in fact, that she won't be getting her usual one-week paid vacation.
Kevin Dalton can empathize. He owned a Citgo station when President Hugo Chavez made anti-American statements in 2006, leading to a boycott of the Venezuelan-owned gas company. Sales of gas and in-store items dropped more than 50 percent. Sales at his Shell station in Palm Beach Gardens, Fla., have increased 15 percent since the spill started in late April, but he says it's hard to directly tie that to a BP station less than a mile away.
Last week, Vincent Connolly's GPS guided him to a BP station off Interstate 480 in Cleveland. But he had second thoughts after filling up for $2.75 a gallon.
"You don't want to support anyone that's killing the environment," he said.
That connection to the destruction on the Gulf Coast concerns Juckniess, the Chicago station owner. He's been running his own promos - free coffee and $2 off a car wash - but he wants BP to step up support of both the stations and the BP brand.
"We're their branded marketers," he says. "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."
The biggest hit comes not from lost gas sales but from lost convenience store business. Owners like Juckniess make just pennies on a gallon of gas. But they might make up to 55 cents on a $1 cup of coffee. The margins on candy and chips are about 48 percent and 37 percent, respectively, Jeff Lenard of the National Association of Convenience Stores.
The boycott's impact on BP is limited. The company makes most of its money exploring and producing oil in places such as Angola, Egypt, the North Sea and the Gulf of Mexico.
"The corner store is the face of BP, but by no means how BP gets its money," Lenard said.
And even if drivers opt to fill up at an Exxon or 7-Eleven, they still may buy BP gasoline. Because of the way gas is refined and marketed, BP fuel gets supplied to stations other than those with BP brands.
The boycott's impact is felt less in rural areas, where people know the owners personally. And it helps to sell other necessities.
Dacia Radabaugh, who manages a BP station owned by her parents in Williamstown, W.Va., thinks the station is as popular as ever because it sells liquor and cigarettes to a regular crowd.
And of course some drivers are just more pragmatic.
"Gas is gas, buddy," said Danny Sullivan, making no apologies for filling up at a Little General BP station in Charleston, W.Va. "It don't matter where it comes from."
Weber reported from Atlanta. Reporters Caryn Rousseau and Serena Dai in Chicago, Annie Greenberg in Miami, John Raby in West Virginia, Patrick Walters in Philadelphia, Erin Conroy in New York and Tom Sheeran in Cleveland contributed to this story.
oil spill, british petroleum, business/finance
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