Shell's Z rebrand will save royalties

An artist's impression of one of the new Z branded petrol stations - formerly Shell. Image supplied

Rebranding Shell service stations as Z will cost about $35 million but its owners will save about $7 million a year in royalty fees to the oil major.

Greenstone Energy - now known as Z Energy - will change the look of 226 service stations in one of the country's biggest rebranding exercises.

Z's chief executive, Mike Bennetts, said Shell had been understanding about his company's move.

He would not detail annual fees paid to Shell, but said royalty spending would be recouped within five years.

The change - which has been criticised by some brand experts - came after more than 17,000 people were surveyed in one of the biggest consumer studies in a decade.

Bennetts said one of the world's most prominent brands would be replaced "by something entirely Kiwi". He said it was not a gamble but an informed decision.

"We arrived at Z because it's short, sharp and to the point. It reflects our national identity and our commitment to New Zealand. To us, Z is all about New Zealand."

The name also had to be easy to spell and pronounce - Zed.

Those surveyed said they could not identify Shell as being a New Zealand company while it had the multinational's branding.

"Our national identity is changing fast. We've shifted away from the number eight wire Kiwi battler stereotypes to a more confident and assured sense of our place in the world."

Last April, Shell sold its fuel business to the New Zealand Superannuation Fund and Wellington-based infrastructure investor Infratil for $695 million. Shell sold other downstream assets to Greenstone, including its stake in New Zealand Refining.

Bennetts said the change in brand would be pointless without a change in culture and improved service, including forecourt staff from 10am to 5pm.

Z would introduce food and coffee to stations where margins on fuel were slim - about 2c a litre - but non-petrol sales were profitable.

Ten pilot sites would be rebranded from next month and it was expected the full rebranding would be complete by the middle of next year.