State-run Bharat Petroleum Corporation Ltd (BPCL) is planning to expand its fuel retail outlets with food courts, cinema halls and provision stores in Haryana, Punjab, Andhra Pradesh and Tamil Nadu.
The company already operates two such fuel retail outlets in Gujarat, at Ahmedabad and Baroda. It says it views this format (allied retail business) as more profitable and would expand in this area. During the last financial year, BPCL's Allied Retail Business grew by 18 per cent, with a turnover of Rs 359 crore (Rs 3.59 billion).
Cinema halls will help us boost our non-fuel revenues. We are doing a survey in some markets where we would like to expand this format. So far, our pilot outlets in Gujarat are working well. The occupancy at the theatres is good and the internal rate of return is around 15 per cent," a senior BPCL executive told Business Standard.
It has ambitious plans of commissioning over 800 new outlets in 2010-11, with an investment of Rs 700 crore (Rs 7 billion). This includes revamping of some retail sites, too.
Setting up a large fuel retail outlet with focus on allied retail business costs BPCL around Rs 4 crore. Setting up an average fuel retail outlet costs the company between Rs 50 lakh and Rs 1 crore (Rs 10 million).
During the last financial year, BPCL commissioned 304 new retail outlets. Public sector oil companies together commissioned 1,557 outlets, as compared to 116 outlets commissioned by private companies.
According to the company's annual report, this format made BPCL not only the largest non-fuel revenue generator in the oil industry, but also one of the leading retail networks in the country, offering a basket of services ranging from C-stores and Quick Service Restaurants, to financial and travel-related services.
With a view to increasing its non-fuel revenue stream, BPCL tied up with Cinemata, a film distribution unit of Sony Entertainment Television in 2007, to set up cinema halls at its 300 fuel outlets on highways across the country.
Each cinema hall will have a seating capacity of 150 to 200 and the films in digital format would be beamed at fuel stations.
The feedback to 'Ghar Dhaba', the food court at its outlets, has been witnessing good footfalls at both the trucker and motorist dining areas.
The network of 235 In and Out stores is by far the largest organised convenience retailing proposition in the country and recorded a sales turnover of Rs 146 crore (Rs 1.46 billion), said BPCL.
As part of the alliance management strategy, 332 ATMs from multiple banks are currently operating at BPCL outlets.
The In & Out e-Traveller, the e-ticketing or e-booking facility for rail, air and hotel accommodation, is presently available at 190 outlets.
