The Challenge
Preem Petroleum is the largest oil company in Sweden and operates a retail petrol and convenience stores across Sweden in addition to its refinery operations. Fierce petrol price wars in Sweden since September 2005 had eroded the price of petrol to the point that a bar of chocolate had a 40% higher margin than a litre of petrol. By 2006 margins had fallen to below break-even cost for staffed Preem sites. Environmental costs made it too expensive to close the petrol stations and in an over-saturated market finding a buyer for the business would have been challenging.
The Brief
Preem Petroleum needed to change from being a petrol retailer into a convenience store retailer with a petrol offer. Landor was briefed to review Preem’s retail offer, create a distinct look and feel based on the existing identity, redesign the forecourt and store environments and serve as brand guardians. Ultimately, the aim was to bring Preem’s retail business back into profit, with objectives over a five year period including increasing turnover by 40%, margins by 35-40% and delivering higher sales per customer.
The Design
Sweden has one of the highest populations of working women in Europe. Preem was already attracting more female customers, so the stores were designed to deliver ‘exactly what women want’. Forecourts are more brightly lit so that women feel safer on short winter days. The toilets feature full-length mirrors and softened lighting and the front of the store has a new glass fascia and coffee bar area. Colour is used to separate the two offers, with orange identifying the petrol offer and white highlighting the convenience store, which offers new fresh and healthy food ranges.
The results With a design investment of over £100,000, the new concept was launched in May 2006. Two pilot sites have seen a 30% increase in turnover, shop margins increase from 26% to 38%, a 20% increase in customer numbers and 8% higher sales per customer. Preem’s market share is the highest it has been in four years, with a significant upturn starting just after the launch of the new store concept. The company is now investing in the retrofit of 37 further sites.
