Oil giants set for forecourt shop war

ESSO, Britain's biggest petrol retailer, is poised to launch an advertising campaign that is likely to spark a fierce media blitz between oil companies, costing tens of millions of pounds this year.

The campaign is aimed at boosting convenience shopping at garage forecourts, and is partly a response to growing competition from supermarket chains in petrol retailing.

Several oil companies - including Shell, Esso and Texaco - are spending hundreds of millions of pounds in the next three years to upgrade their forecourt stalls into convenience stores offering a wide range of foods, drinks and other necessities.

However, there are also fears of a media war between oil companies if they decide to launch 'third generation' petrol that offers new advances in fuel.

Shell, Britain's second-biggest petrol retailer, with an 18 per cent market share, is spending pounds 250m to increase its network of Select shops from 350 to 1,000 by 1996.

The project was backed up last year with an estimated pounds 6m media campaign by Bartle Bogle Hegarty, the advertising agency.

However, the company is being challenged by Esso, which has 20 per cent of the market, with a new, tailor-made campaign promoting its own convenience stores.

At present, Esso has about 650 convenience shops - designed by Sir Terence Conran - but is planning to increase the network to 1,000 over the next two years.

The new campaign with a total budget running to several million pounds has been devised by the advertising agency J Walter Thompson, and is expected by industry experts to start in spring.

Separately, Texaco is also known to be expanding its Star shops format and could join the media fray. The company recently ran a national road safety campaign and is considering introducing forecourt road safety centres.

However, nearly all the major oil companies consider supermarket chains, which have increased their market share to about 12 per cent from scatch within five years, as a prime threat.

Led by Tesco, they have encroached on the oil companies' patch by offering cheap, own-label petrol that can be up to 15p a gallon cheaper than branded petrol.

Oil companies have hit back by offering better 'top-up' shopping facilities round the clock. By promoting their shops, they also hope to differentiate their own brands from rivals'. Richard Little, Texaco's advertising manager, said: 'Our aim is partly to attract more customers into forecourts with improved convenience shopping facilities.

'We are also trying to differentiate our products from others. In addition, we are also responding to competition from supermarkets. One way of doing that is not to take them head-on, but by offering what they can't'

(Photograph omitted)