Local ownership key to Shell chain's relaunch

A Shell concept station trialling different food opened in Waiuku, South Auckland, last week. Photo / Supplied

The owner of Shell service stations is on track to relaunch the chain around the middle of the year with emphasis on its local ownership.

Greenstone Energy chief executive Mike Bennetts said research the company had commissioned since buying Shell a year ago showed New Zealanders wanted substantial changes from service stations.

He would not comment on whether the Shell brand would remain but said the New Zealand ownership of the 230 filling stations and its trucks, boats and aircraft fuels business would be emphasised in the revamp.

"We'd like to have that more at the forefront of people's minds when they make choices."

Last year Wellington-based Infratil and the NZ Super fund paid just on $700 million for Shell's assets, excluding its "upstream" exploration business.

In its first six months under Greenstone, the fuel business returned a net profit of about $26 million, ahead of expectations.

The past two months - when fuel prices have matched records set in 2008 - resulted in more difficult trading conditions with customer resistance starting to be felt.

Bennetts said the company had surveyed 17,000 customers through a variety of research in one of the biggest projects of its type in the past decade.

Company veterans had been surprised by the survey findings, which had turned some industry paradigms on their head.

"New Zealanders have moved on, the consumer of today has less time, is less fussy in certain areas and more fussy in others."

Because of Shell's strong position, with an estimated 30 per cent of the market, it could not market itself in a "hokey" way or paint itself as the little battler the way Kiwibank has, he said.

He would not be drawn on whether the two-year lease of the distinctive Shell logo would be extended. Greenstone pays a "hefty" fee for use of the brand, which could be extended.

Shell filling stations will sell more fresh food and coffee and fewer groceries after the relaunch.

A concept station trialling different food opened in Waiuku, South Auckland, last week.

The stations attract 65 million customers a year but are playing catch-up with BP in fresh food and coffee.

Bennetts said forecourt service was also under review.

"We're thinking about how to make ourselves distinctive in that area and that's a story we'll tell over the next two quarters," he said.

"The consumer has said they're not going to pay for the way it was but we're going to give them some choice around that sort of thing."

The changes and substantial infrastructure development will boost capital spending - between $80 million and $90 million in the coming year - up from $30 million spent last year.

Under its former owners, Shell typically spent $20 million to $25 million on reinvestment in the business, he said.

"We're putting our money where our mouth is. We're saying the industry needs to have investment, particularly in infrastructure, and we're willing to stump up on that."

Major rival BP is also making a substantial investment redeveloping its Wellington fuel terminal.

Bennetts said the Christchurch earthquakes had cost Greenstone between $5 million and $10 million, which would be offset by insurance.