BP loses drive for supermarket gas

By KARYN SCHERER

Petrol giant BP has pulled the plug on a joint venture with supermarket chain Woolworths, which was to have seen dozens of petrol stations converted into mini-supermarkets.

BP confirmed yesterday that it was abandoning its joint BP/Woolworths outlets in Herne Bay and Henderson in Auckland, and turning them back into BP Express stores.

While both companies insist the trial was a success, BP now says it wants to try another format.

The trial, which began a year ago, was seen by BP as a way of boosting profits in an increasingly cut-throat petrol market. The stores are open 24 hours a day and offer around 3000 products at supermarket prices.

BP claimed yesterday that it was happy with the trial, but had decided it wanted to pursue "a path more in line with the rest of the BP world."

It has ruled out another joint venture and is believed to be eyeing new formats already being used in Europe and the United States.

Managing director Peter Griffiths said yesterday that the company intended to announce its new plans later this year.

Woolworths admitted it was disappointed by the decision.

Marketing director Des Flynn said the company was happy with the stores' sales and profitability.

"Much to our dismay and grief, BP have decided to pursue a different option."

Mr Flynn said he expected the stores would close sooner, rather than later.

"If the divorce clause has been invoked, then it's best to get on and get it over with."

Around 60 staff are affected by the decision. When both companies announced their plans a year ago, they predicted the joint venture would provide several hundred jobs.

According to Mr Flynn, Woolworths was now "actively looking at other options" and was not ruling out continuing to compete with dairies and petrol stations by opening its own mini-grocery outlets.

However, petrol stations were also continuing to fight for the convenience market.

Over the past three years, Caltex has opened five stand-alone grocery stores under the Star Mart brand and has plans to open at least 10 more this year.

In the meantime, Woolworths plans to open more of its existing stores 24 hours a day. Three of its Auckland stores are now open around the clock, a trend that is likely to be extended to other main centres this year.

While the decision to end the joint venture has upset some customers, not everyone is disappointed.

The Ardmore Dairy in Herne Bay, which is regularly voted as Auckland's best dairy by Metro magazine readers, is delighted at the decision.

Dairy owner Sultana Bhamji said yesterday that retailers all along Jervois Rd had been affected by the new store.

"It was a very competitive year for us but we have some good loyal customers who have stuck with us and helped pull us through."

Meanwhile, Woolworths has already started work on a new supermarket in nearby Grey Lynn.

The store will be on the site of the old Sleepyhead factory on Richmond Rd and is expected to be completed by the end of the year.