Challenge targets more independents

Photo / NZ Herald

The operator-owned Challenge service station chain hopes to lure more independents from big oil companies during the coming year as more change looms in the sector.

During the past two years the rural-focused chain has added 11 filling stations to its network, taking total numbers to 89.

Chairman of the Challenge dealer group Simon Bratton said with changes in the industry and the possibility of more majors selling out, his group had more prospects in its sights.

"We're working on a number of independents. There are about 15 live inquiries and we hope to have eight or nine signed up by the end of the year."

The chain, which was a Fletcher company when it started in the 1990s, now uses farmer co-operative Combined Rural Traders to buy fuel. CRT is a farmer based co-operative out of Dunedin, with about 55,000 farmer members that grew out of an amalgamation of farmer groups.

Bratton said the co-operative turned over about $1 billion a year, with about a third of that fuel. At present it has a supply deal with Chevron.

"We see it as an alternative for marginalised independents. We're a trading block with 130 million litres of fuel [a year] and we can now negotiate supply from anyone."

Like their rivals, Challenge stations in cities had experienced a drop in petrol sales this year. However, diesel sales were up in rural areas because the farm economy was strong.