In an industry that has recently changed its customer-facing offers many times, Budget Petrol in Sydney has been a steady ship.
David Burton.
Petrol brands have disappeared over time. Think Ampol, Golden Fleece and even for a time the mighty Mobil, which is now back in use at 7-Eleven, the company that bought its sites.
One brand has remained in the market, though, and is celebrating 30 years of pumping petrol for motorists. Admittedly, it pumped fewer petrol choices back then and less diesel, too.
The now 30-year-old business aptly named itself Budget Petrol. What more could the motoring public want? The name Budget Petrol says it all, and long before Woolworths thought of offering lower-cost fuel.
Humble beginnings
In 1985, the business started with just one site, which was run by Arthur Petalotis at Bexley. Later that year, a second Budget Petrol site was opened at Kogarah. In 1987, Steve Melas was running a site at Petersham and brought on board an LPG autogas business, which is now the largest independent autogas business in Sydney. As Messrs Petalotis and Melas became successful, other independents were allowed to use the name and branding.
For the first 20 years all sites were supplied Shell and Mobil, but when the Mobil wholesaler closed down, it gave Messrs Petalotis and Melas the opportunity to become Mobil wholesalers themselves, so Gascorp came into being.
Now there are 60 sites dotted around the Sydney metropolitan area that wear the Budget Petrol logo and offer the lowest prices possible: all of these retailers are true independents and licensed to use the logo. There is no fee involved for this, they are simply contracted to buy all their fuel from Gascorp.
Gascorp General Manager Diann Melas told Convenience World that the system works. Gascorp provides a top-class service from its own fleet of trucks and can deliver 24/7. This support to the stores enables them to better serve customers.
Gascorp uses veteran sales representative David Spedding to visit stores and, as part of his role, other than briefing operators on new products, he is available to offer general service station advice.
The store owners
Mr Petalotis started his career at a Caltex service station at Hurstville while Mr Melas began at an Ampol at Croydon Park. Both started in the oil industry in their early 20s and, over time, their children took roles working in and managing the business.
Ms Melas says the group has a number of original owners in their mid-50s who now have sons and daughters working with them, in many cases as part of a retirement and succession plan. She says there is also a newer group that came to Australia from India and Cambodia looking for businesses to buy that they and their families could operate.
As well as the long-term owners and those that have bought a site when a Budget Petrol owner has retired, operators of competing sites inquire about switching to the brand. These potential sites from other brands are visited by Messrs Melas, Petalotis and Spedding, who have detailed discussions about just what each party should expect of the other.
One sad factor in the current real estate boom is the number of sites that simply close and are then developed for units. Ms Melas says while remediation costs are not insignificant, the cost is usually outweighed generously by the developer’s profit.
Marketing and promotions
Gascorp has recently refurbished several sites. The work carried out includes new and repainted pumps and canopies, and installation of the Budget Petrol logo, as required.
There is an upgrade to its website, too, which allows the public to find a local Budget Petrol store and seek out specials. This part of the communication will be determined by individual stores because Gascorp is a fuel wholesaler that owns the Budget Petrol brand. It isn’t a franchise model and it doesn’t charge for use of its branding. The deal is simply “a contract to purchase fuel from Gascorp”.
As such, with the stores being true independents, Gascorp does not mandate policy but, rather, encourages its retailers to take up good ideas. Because the stores are independent, there are arrangements with both New Sunrise Group and UCB when it comes to range and promotions. Budget Petrol trades on competitively priced fuel, so the promotions on groceries, snacks, drinks and the like must also be of good value.
With both New Sunrise Group and UCB marketing their portfolio of stores to suppliers, each is going to have great specials, but it is down to individual store owners to decide which they will support. It is a very democratic business model and allows freedom of choice.
In addition to the aforementioned specialist buying groups, Ms Melas says Gascorp has placed arrangements with certain suppliers that deliver direct. One example is Falcones bakery based at Port Kembla. This is a 52-year-old family business that delivers its bread through Sydney, the Blue Mountains, Illawarra, Riverina and Newcastle.
Another supply arrangement is with Elgas for the supply of Swap‘n’Go gas bottles, as well as standard refills. Valvoline is another company with a special supply arrangement with Gascorp, and this means stores receive tailored promotions from time to time. These supply deals mean better rates than individual operators might obtain.
