Operational Efficiency in European Fuel Retailing

SUMMARY

Overview

Introduction

The benefits of strong operational efficiency are clear to the fuel retailer in the current climate of low margins. Maximising the volume of fuel sold at each site bolsters profit margins. This brief assesses average annual site throughput against other key drivers of market efficiency for key European fuel retailing markets and establishes which companies are driving this.

Scope

• An examination of the petrol station fuel throughput, market concentration and the geographic coverage of sites in 26 European markets
• A comparison of the fuel throughput of key players in the UK, Germany, France, Spain, Italy, Sweden, the Czech Republic, Poland, Slovenia and Romania
• An assessment of Europe's best and worst performers in terms of petrol station efficiency and the factors that underlie their performance

Report Highlights

While the ever-decreasing number of petrol stations in mature western European markets has been the driving force behind increases in site efficiency, in central and eastern Europe motorists' thirst for fuel is growing faster than new petrol stations can be built. The average fuel throughout in Slovenia and Romania now exceeds 4.5m litres per site.

As western and central and eastern Europe follow divergent paths in terms of site rationalisation, one trend remains constant: supermarkets are opening new service station sites irrespective of the regional norm and are successfully expanding their share of the retail fuels market with higher than average levels of fuel throughput.

Despite site rationalisation efforts by Italy's major players, the market still has low throughput levels. If fuel demand continues to grow and site numbers continue to decline at the rate witnessed over 2000-2004, it will take 27 years to reach the average site throughput levels currently exhibited by its Western European peers.

Reasons to Purchase

• Benchmark average throughput per site and volume share against your market competitors and identify target markets for new entry
• Pre-empt acquisitions and areas of site rationalisation by understanding the composition and efficiency levels of key European retail networks
• Understand the core factors that drive improvements in fuel retail efficiency a national and company level

TABLE OF CONTENTS

• CHAPTER 1 Executive summary
  • National majors are aggressively entering the less mature,but expanding Central and Eastern European fuel retailing market
  • Europe's more mature fuel retailing sectors arecharacterised by site rationalisation, whilst supermarkets are generallydriving efficiency gains
• CHAPTER 2 INTRODUCTION
  • This brief is aimed at those seeking a greaterunderstanding of the varying degrees of operational efficiency currentlyprevailing in the European fuel retailing sector
• CHAPTER 3 MARKET CONTEXT
  • Luxembourg has the highest average fuel throughput persite in Europe, reflecting its close proximity to key transit routes
  • The Benelux region has the highest geographical coverageof petrol stations per square kilometre
  • Slovenia is the most concentrated market in terms of siteownership
  • France has the most fragmented fuel retail sector in termsof the fuel volume share controlled by its leading suppliers
• Chapter 4 Market trends
  • Bulgaria has the lowest average national throughput inEurope as site expansion outstrips fuel demand growth
  • Petrol Bulgaria must rationalise and refurbish in order tostave off aggressive competition from international majors
  • Romanian fuel demand growth is supporting high averagethroughput in an immature European fuel retailing market
  • Romania's growing demand has attracted aggressiveentrants, requiring Petrom to invest in protecting its market position
  • The Czech fuel retailing market is increasing site numbersin line with demand and sustaining levels of throughput
  • Consistent fuel demand growth is pushing both national andinternational retailers to expand their Czech operations
  • Growth in Polish throughput per site is failing to keeppace with underlying fuel demand growth
  • Poland's former state incumbent is facing increasinglystiff competition from highly efficient foreign players
  • Rigorous site rationalisation is required if Italy is toaddress its relatively low throughput per site and market overcrowding
  • Agip is protecting volume market share and underpinningthroughput per site due to ongoing site rationalisation
  • Despite lagging other Western European markets, Swedishthroughput per site continues to register consistent growth
  • Statoil and Q8 are effectively protecting fuel marketshare and improving throughput in Sweden's forecourt
  • Strong Spanish fuel demand growth is keeping averagethroughput per site amongst the highest in Europe
  • Site rationalisation has seen Spanish incumbentssuccessfully protect throughput and volume share in an expanding sector
  • The UK is maintaining one of the highest average nationalfuel throughputs in Europe through sector-wide rationalisation
  • In the UK's competitive fuel retailing market,supermarkets continue to be the key challenger to the traditional majors
  • With site rationalisation again prevalent, France ismaintaining growth in throughput per site in the face of falling fueldemand
  • Supermarkets are driving efficiency across the fuelretailing market, pushing traditional majors into a defensive strategy
  • Germany's average national throughput and wider marketcompetition is stagnating behind slumping fuel demand
  • Throughput per site plateaus as Aral and Shell continue todominate the German fuel retailing market
  • Related reports and contact details
  • European Forecourt Retailing Database - Data methodology
• List of Figures
  • Figure 1: Target audience
  • Figure 2: Average national fuel throughput per sitevaries dramatically across Europe
  • Figure 3: A crowded Benelux region contrasts sparsepetrol station coverage in Scandinavia
  • Figure 4: Market concentration by site numbers variessignificantly and does not necessarily reflect the maturity of individualmarkets
  • Figure 5: France's leading fuel retailers have the leastmarket control in terms of fuel volumes
  • Figure 6: Bulgarian average throughput per site is thelowest in Europe
  • Figure 7: Petrol has the lowest average throughput inthe Bulgarian fuel retailing market
  • Figure 8: Romanian average throughput per site isamongst the highest in Europe
  • Figure 9: Former state incumbent, Petrom, maintains arelatively high average throughput per site
  • Figure 10: Stable throughput per site reflects generalCzech market efficiency
  • Figure 11: Benzina has the lowest throughput per site inthe Czech Republic
  • Figure 12: Polish average throughput per site is belowthe European average
  • Figure 13: PKN Orlen has the lowest average throughputper site in Poland
  • Figure 14: Italy's forecourt is amongst the leastefficient in Europe
  • Figure 15: Agip is more efficient at retailing fuel thanthe majority of its competitors
  • Figure 16: Sweden has the fourth lowest geographicalcoverage of sites
  • Figure 17: Key players Q8 and Statoil are successfullyprotecting fuel volume market share
  • Figure 18: Spain has the second highest averagethroughput per site in Europe
  • Figure 19: New entrants have been unable to acquirenotable market share from Respol and Cepsa
  • Figure 20: The UK is the fifth most efficient fuelretailing market in Europe by average site throughput
  • Figure 21: Tesco is the key driver of efficiency gainsin average site throughput
  • Figure 22: France's mature forecourt is the mostfragmented market by fuel volume share
  • Figure 23: Supermarkets are driving efficiency gains inFrance's fuel retailing market
  • Figure 24: Germany's has the least crowded market byregistered vehicles per site
  • Figure 25: BP and Shell are largest retailers in termsof both site presence and fuel volume share