Istvan Kapitany looks after a global network of around 43,000 service stations, where half a million staff members serve 25m customers across 70 countries every day. “It’s a mind-bogglingly high number,” says the self-dubbed Budapest boy, thumbing the silver Shell pin that sits on his lapel. “This is one of the biggest retail networks in the world, with more stores than Starbucks or McDonald’s.”
An interview by Laura Davidson of the Daily Telegraph, extracts of which follow, reveals that every quarter Kapitany spends a day working at a petrol station, not just “smiling and giving advice”, he says, but doing a proper 12-hour shift from 6am to 6pm. “We don’t have any customers in the office building where I work,” he says, gesticulating at the space around him. “It’s very difficult to see the real issues if you sit inside an office.”
Kapitany has certainly climbed his way through the ranks since joining Shell in 1987 as a petrol station manager in Hungary, his home country. “Many of us here at Shell are so-called lifers! We’ve worked for the company a long time,” Kapitany says. “You don’t forget where you started, even if you get a bigger portfolio.”
Shell does not disclose the financial details of its retail business, except to say that it processes more than $6bn worth of convenience retail transactions every year, Its total revenues fell by 37pc last year, however, earnings from Shell’s downstream operations, which includes its retail business, tripled in 2015 to $10.2bn.
Alternative fuels
Kapitany, who is also Shell’s lead director for its Brazilian joint venture Raizen which produces ethanol from sugar cane. Last year, Raizen produced more than 2bn litres of ethanol from Brazilian sugar cane, which emits 70pc less CO2 than conventional petrol. “We are the number one company in biofuels in the world. We sell more biofuels than anyone else,” Kapitany claims. “We are also at the forefront of hydrogen innovation.”
Shell is part of a joint venture with Daimler and others to commercialise hydrogen gas for powering hydrogen fuel cell vehicles, which are electric cars that have a range nearer that of conventional cars than battery-powered cars. The Berlin-based joint venture has eight sites and plans to have hydrogen-fuelling pumps at 400 locations across Germany by 2023.
“There are areas where it’s clear that there i a growing demand for battery electric cars particularly in California and parts of Holland, so we’re working on developing supercharging technology, too,” Kapitany says. While the forecourt of the future will most likely sell alternative fuels to power vehicles, Kapitany also expects renewable energy to play a bigger part in the operation of the stations themselves. Shell is running trials in China to generate all the energy needs of a site from solar panel canopies.
Reimaging is the key
Reimagining the purpose of the forecourts and increasing the convenience they offer consumers is at the core of Kapitany’s attempts to future-proof Shell’s retail business. In today’s digitally connected on-demand economy, retailers must work harder than ever to attract customers. This is particularly true for petrol stations, where price and location have always been more important than brand loyalty, amid intensifying competition from supermarkets.
Kapitany pinpoints this development as the key to the forecourt of the future: service stations need to attract customers even when they don’t need to refuel. “We are seeing a huge number of people coming to service stations who are not filling up their cars. They are coming in to buy breakfast, to get a cup of coffee, to get their car washed. Their need for convenience retail is more frequent than their car’s need for fuel.”
Shell is experimenting with different ways to lure customers into its stores and encouraging them to spend more time there. The company has two sites in Bangkok that sell only V-Power, Shell’s highest quality fuel, alongside a luxury cafe. Each customer gets two attendants – one to serve them and one to service their car. In Luxembourg, Shell operates the world’s largest petrol station, servicing up to 25,000 customers per day.
Driverless cars
Increasing the retail offering of service stations will become even more important as cars become more efficient, needing to refuel less frequently, and driverless cars become commonplace, Kapitany says. “Autonomous cars do not mean, of course, that humans are not there. The cars are still taking people from A to B, so it’s very important that service stations are suitable for those type of cars – but also remain relevant for the people who are sitting in them.”
Despite the many uncertainties surrounding the future, Kapitany feels convinced that there will be a place for petrol stations. “I imagine that we would offer additional services to consumers going forward that for the time being we are not even aware of, ones that might be developed in the next couple of years,” he says. “We do not know how the world will be in 20 years’ time. If I knew this, I wouldn’t be sitting here doing this job. I would be a very rich man.”
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