Alexander Kuzmin, RusHOLTS CEO, spoke at the conference “Global and local markets of oil and petroleum products: the analysis, pricing, trade flows“, presenting the report on the non-fuel businesses of filling stations. Development and marketing of modern gas station chain have become relevant and even a prime-time topic for Russian gas station chains, both large and small. Request for an effective program of roadside service comes from the top of the Vertically Integrated Oil Companies’ management which is good. On the other hand it is sad that in the minds of many leaders the level of understanding of the non-fuel business development remained at the 2010 level.

Recently, representatives of the world’s leading management consulting companies have spoken a lot about the need for Russian gas stations chains to develop their potential of non-fuel businesses. In most cases, to the audience’s attention are offered the “best practices” based on the experience of more mature foreign markets with no less than half a century of history. Why are these recommendations still not massively implemented in the Russian conditions?

As a practitioner, I see several reasons for this: the main one – the majority of local gas station chains has no basis for the application of such recommendations. We got many gas station chains that havn’t the elementary basic structure of the non-fuel businesses, for which it would be possible to apply the proposed tools to improve efficiency. Zero multiplied by any number still gives you a zero.

Presentation >>
Full version of the report presented at the conference >>

Key figures:
The income of one station with customer traffic of 1000 people per day and more at baseline (!) level of the non-fuel businesses’ organization is more than 1 million rubles.
Profit of a gas station with 1000 checks of customer traffic per day from CAFE department – 350 thousand rubles (with the revenues of 700 thousand rubles).
Coffee with the right sales organization can cover 10% of customer traffic, it is 210 thousand per month. Fast food covers about 5% of customer traffic and 80 thousand per month and pastries will ensure another 60 thousand per month.

Profits from a gas station with 1000 checks per day from SHOP department – 450 thousand per month (with revenues of 1.4 million rubles).
Again, it’s more than a million rubles a month as a profit. And it is at the base level of the organization of non-fuel businesses, a result that can and should be improved. After all, if the basis is zero, it won’t matter how much you will multiply the efforts, the result is still will be a zero.

These figures can be rotated again. You have a basic level of development of the non-fuel businesses, if the sales of coffee cover 10% of customer traffic and another 5% of customers buy fast food and pastries. This is the level from which you can push off and seek to improve the situation.