- BP’s convenience stores become a major player in the coffee industry
- Convenience gross margin rises 9% to $1.66 billion
- Electric-vehicle charging boosts retail sales
BP, known primarily as an oil company, has made an unexpected foray into the coffee market. With its convenience stores selling not only gasoline but also coffee and various other items, BP has seen a significant boost in its business. The convenience gross margin, a profit measure defined in the company’s quarterly results, rose by 9% to $1.66 billion last year. This unexpected success in the coffee sector has not only surprised industry experts but also highlighted the strength and potential of BP’s convenience-store business.
The Rise of BP’s Convenience-Store Business
A Behemoth Not to Be Underestimated
Kathleen Brooks, research director at XTB, emphasizes the significance of BP’s convenience-store business. With a network of 21,100 retail sites, including 2,850 strategic convenience sites, BP’s presence in the market is undeniable. The company’s convenience stores have become a behemoth, generating substantial profits and providing a wide range of products to customers beyond gasoline.
Electric-Vehicle Charging Boosts Retail Sales
One of the factors contributing to BP’s success in its convenience-store business is the rise of electric-vehicle charging. In the United Kingdom, BP has observed that customers who use their electric-vehicle charging services spend more in their retail shops compared to fuel customers. This trend indicates the potential for increased revenue as the demand for electric vehicles continues to grow.
Other Oil Majors Experience Similar Success
Beyond BP, other oil majors such as Shell and Exxon Mobil have also reported positive results from their fuel stations. Shell, for example, reported higher unit margins from mobility, the division that operates its retail network. Exxon Mobil identified stronger marketing margins as a contributing factor to their success. While their numbers weren’t explicitly broken out like BP’s, it is evident that the convenience-store business within the oil industry is thriving.
The unexpected success of BP’s convenience-store business in the coffee market demonstrates the company’s ability to diversify and adapt to changing consumer demands. With a strong network of retail sites and the added boost from electric-vehicle charging, BP’s convenience stores have become a significant player in the industry. As the oil industry continues to evolve, BP and other oil majors are finding new avenues for growth and profitability. The rise of BP’s coffee production serves as a reminder that even established companies can successfully venture into unexpected commodities.