21 Oct 2011

Z Energy about to go nationwide

7:01 am on 21 October 2011

Z Energy could be rolling out its brand nationwide within six months, spelling the end of Shell - one of the most famous global brands in New Zealand.

The Z brand was launched five months ago after Shell's service stations and other assets were bought by the New Zealand Superannuation Fund and Infratil through Greenstone Energy for $695 million.

After an extensive nationwide survey of 17,000 people, the company built 10 pilot service stations called Z.

Chief executive Mike Bennetts says the rebranding of 230 Shell stations could happen within months.

He says price and location are important, but in New Zealand the prices are largely the same and there are plenty of service stations around in most communities, particularly in urban areas - so it's important to differentiate the product.

Mr Bennetts says the company needs to work on ways of being profitable on tight margins and lower fuel sales.

He says Z Energy's post tax profit is 3 cents per litre, which is not much and if the company doesn't get it right it could very easily lose money.

Mr Bennetts says the current high petrol prices are affecting New Zealanders who are buying less and choosing to travel less, so there's a fall off in demand.

He says a year ago prices were $1.70 at the pump and now it is around $2.10 per litre, which is a big chunk out of people's discretionary income.

Mr Bennetts says the company wants to keep its costs down as much as possible and it wants to keep broadening its earning base so when times get tough the company is not relying solely on fuel sales.