30 Mar 2010

New owners advised to improve Shell forecourt services

10:06 am on 30 March 2010

The new owners of Shell's service stations in New Zealand are being advised to expand services on the forecourt if they want to increase profits.

Infrastructure investor Infratil and the New Zealand Super Fund have bought 229 service stations, 97 truck stops, a 17% stake in the New Zealand Refinery and the loyalty programme Fly Buys for an estimated $750 million.

The managing director of the research company Coriolis says margins on petrol sales are slender and profits are typically made from products such as drinks, phone cards, coffee and cigarettes.

Tim Morris says BP is the market leader while Shell has lagged behind. He says overseas, companies are boosting profits by enticing customers with fresh, convenience foods.

Infratil says it would be interested in buying some of Mobil's assets if they became available.

Workers warned

Shell service station workers are being warned to expect the worst of their new employer.

Infratil and the New Zealand Super Fund say job numbers will be stable for a year, but eventually there will be fewer workers on the forecourts.

A spokesperson for the Campaign Against Foreign Ownership of Aotearoa says Infratil's subsidiary NZ Bus treated its employees poorly and Shell workers will be dealing with a company which puts profits first.

Murray Horton says Infratil sells itself as a New Zealand company, but 30% of its shares are held overseas.