Page 3: Market opportunities
Murco was suffering from having its market positioning redefined by competitor activity. Consequently, Murco consulted with Elf and Gulf to explore the possibility of a merger. However they concluded that the required economies of scale would not be forthcoming.
The alternative was to develop the nonfuel income of the existing stations to a much higher level. To do so required an entirely new shop format, one capable of generating higher sales than Murco’s local convenience stores. Murco was aware that grocery shopping habits had been radically altered by two developments:
- the relocation of the supermarket from the High Street to the edge of town
- changes in the profile of the average household.
Shoppers found the new supermarkets to be very attractive due to the range and quality of the meal solutions they offered, the depth of their fresh and chilled food sections, and the ambience, although they did not necessarily wish to shop there more than once a week.
This indicated a market opportunity for Murco, if it could provide competitive solutions to customers’ needs right on their doorsteps. While shoppers inevitably would do their weekly purchasing at the large supermarket, they might be enticed to fill mid-week gaps by ‘topping up’ at neighbourhood stores. By developing its forecourt shops into stores capable of intercepting this midweek shopping, Murco could generate high levels of income. It required the stores to be rebuilt and re-launched with a range meeting the high standards of fresh and chilled foods offered by the superstores. They would also have to develop and maintain an acceptable pricing policy, and to provide an ambience shoppers would associate with the trusted superstores.
Creating a winning partnership
Murco understood it would require further expertise to carry through such a plan. Its alternatives were:
- to invite one of the established supermarket groups to develop and operate stores at the service stations
- to seek an alliance partner capable of assisting Murco in choosing the right locations, planning developments, equipment and control systems in addition to merchandising, pricing and promoting the stores.
The chosen partner would also have to have a logistical system that could maintain supplies of fresh and chilled produce, develop attractive meal solutions, and be capable of training Murco’s locally recruited self-employed retail proprietors – key players in the concept.