Oil Companies Look to Food for Profit

Jan. 19, 2021
As gasoline prices continue to languish, oil companies are increasingly turning to food and beverage sales.

As gasoline prices continue to languish, oil companies are increasingly turning to food and beverage sales in their gas stations to shore up profits.

BP and Shell both plan to add thousands of outlets to their global networks of gas stations, with additional sales of food and other convenience items being the major motivation, its executives say. These plans come during a pandemic that drove down the price of oil 63% last spring.

Food and other non-gasoline items have typically been a strong profit center for gas stations, due to their higher profit margins. Gasoline has a margin of about 9%, while food margins range from 50% for candy to 63% for hot drinks, according to information gathered by the Wall Street Journal.

“We believe we can more than offset the impact of fuel volume declines in established markets to 2030 through growth in convenience,” a BP executive told investors last year.

The “marketing division” of Shell, which includes non-gas items sold at stations, reported earnings of $1.8 billion in the third quarter. This amounts to more than half the company’s earnings, compared with 20% to 30% before the pandemic.

Both Shell and BP have especially ambitious plans for food sales in stations outside the U.S., including delivery from some stations in the United Kingdom.

Sponsored Recommendations

Refrigerated transport services you can count on

Ensure product quality from origin to final destination with refrigerated shipping solutions from Schneider.

4 shipping challenges that a dedicated carrier can solve

Navigating the logistics industry is challenging. Find out how a dedicated transportation solution can solve some of the most common shipping challenges.

Dedicated lightweight solution maximizes bottled water payload

A leading bottled water company needed a carrier to transport water from 29 plants to retailers. The challenge? Handling over 46,000 pounds. Read the study.

Recipe for successful growth: Schneider’s dedicated fleet services helps bakery rise

Learn how a large bakery company complimented their private fleet with Schneider Dedicated freight services to increase freight capacity, amplify visibility & reduce costs.