Petrol, Oil and Antifreeze - UK - June 2007

Table of Contents

• Issues in the Market
• Definition
• Five key themes
• Market in Brief
• Rising oil prices drive value of market upwards
• Declining usage of oil and antifreeze
• Trading up achieves mixed success
• Competition is intense with the focus on price encouraging the development of own-label
• Suppliers focus efforts on non-price methods of promotion
• Environmental concerns are becoming more important
• Internal Market Environment
• Key points
• Expanding UK car parc bodes well for continuing market development
  • Figure 1: UK car parc and new car registrations, 2002-12
• Rise of two-car household should encourage increased purchases
  • Figure 2: Household ownership of cars, 2002-06
• Rising popularity of diesel set to change complexion of fuel market
  • Figure 3: Engine type (only car or most recently obtained car), 2002-06
• Rising number of older vehicles on the road may prompt greater need for consumables
• Length of ownership
  • Figure 4: When obtained (only car or most recently obtained car), 2002-06
• Growing consumer environmental consciousness
  • Figure 5: Agreement with attitudinal statements on the environment, 2002-06
• Mileage driven
  • Figure 6: Average mileage driven per year, 2002-06
• Milder weather has been challenging
  • Figure 7: Average winter temperature, 2001/02-2005/06
• Broader Market Environment
• Key points
• Regulatory Issues
• Taxation and Fuel Duty
• Regulatory moves expected to drive forward use of bio-fuel
• Pay-as-you-drive -- coming to a city near you?
• Or will it be nation-wide?
• Crude Oil prices
  • Figure 8: Price of Saudi Arabian crude oil prices in US$ per barrel, 1998-2007
• Consumers disinterested in car maintenance themselves
  • Figure 9: Agreement with attitudinal statements on cars, 2002-06
• Do-it-for-me
• Changing demographics
• AB socio-economic status growing
  • Figure 10: Changes in socio-economic status, 2002-07 and 2007-12
• Least interested in car maintenance issues...
• ...but the most concerned with the environment
• Ageing population
  • Figure 11: Changes in the UK demographic profile, by age, 2002-07 and 2007-12
• Competitive Context
• Key points
• Longer service periods mean consumables lasts for longer
• Better engine efficiency
• Movement away from use of fossil fuels
• Competition from public transport influencing the decisions of some
  • Figure 12: Agreement with selected attitudinal statements, 2002-06
• Strengths and Weaknesses in the Market
• Strengths
• Weaknesses
• Market Value and Forecast
• Key points
• Increasing demand and rising raw material costs
  • Figure 13: Total UK consumer expenditure on petrol, diesel, oil and antifreeze*, 2002-07
• Petrol and diesel dominate the market
  • Figure 14: Breakdown of consumer retail expenditure on petrol, diesel, oil and antifreeze, 2002-06
• The Future and Forecast
• Market set to continue to expand
• Forecast for petrol, diesel and oil
• Petrol consumption grows steady
  • Figure 15: UK retail sales of petrol/diesel and oil, by volume, 2002-12
• Rising international oil prices
• Declining usage of oil
  • Figure 16: UK retail sales of antifreeze, by value, 2002-12
• Trading up
• Declining usage of antifreeze
• Environmental concerns will grow more dominant
• But which alternative fuel will win through?
• Bio-diesel or bio-ethanol?
• Or will fuel be required at all?
• What is for certain is that consumer barriers will dissipate
• Factors used in the forecast
• Segment Performance
• Key points
• Petrol and Diesel
• Value growth outstrips rising volume sales
  • Figure 17: UK retail sales of petrol and diesel, by volume and value, 2002-07
• Diesel moves to increase share of volume sales
  • Figure 18: Volume retail sales of petrol and diesel, by type, 2002-06
  • Figure 19: Value retail sales of petrol and diesel, by type, 2002-06
• Premium unleaded fights off threat of super variant
  • Figure 20: Volume retail sales of super and premium unleaded petrol, 2002-06
• Stripping away duty reveals the full impact of global price rises
  • Figure 21: UK consumer expenditure on petrol and diesel, excluding duty, 2002-06
• Price rises at the pump lag those at source
  • Figure 22: Average price per litre of leaded/unleaded petrol and diesel, excluding duty and tax, 2002-06
• Ways of overcoming price in the market
• Oil
• Volumes record a fall while value of market surges ahead
  • Figure 23: UK retail sales of oil, by volume and value, 2002-07
• Synthetic oils move to become major variant
  • Figure 24: Oil market segmentation, by volume, 2002-06
• Higher price of synthetic oils significantly boosts value
  • Figure 25: Oil market segmentation, by value, 2002-06
• Semi-synthetic dominates
• Mineral oils are declining
• Car manufacturer demands for longer-life oil segments market further
• Antifreeze
• Stable sales illustrate lacklustre market performance
  • Figure 26: UK retail sales of antifreeze, by value, 2002-07
• Premium sector gradually increasing share of sales
  • Figure 27: Antifreeze market segmentation, by value, 2002-06
• Use of colour helps in effort to differentiate
• Market Share
• Key points
• Petrol and Diesel
• Well-established companies tend to dominate
  • Figure 28: Petrol and diesel retailers' brand shares in the UK, 2002-06
• Supermarkets are growing
• Tesco achieves dominance in fuel as it does elsewhere
• Smaller operators are falling
• Leading oil brands
• Major brands come under attack from supermarket own-label
  • Figure 29: UK retail brand shares of motor oil, 2002-06
• Leading antifreeze brands
• Own-label also making good progress in antifreeze market
  • Figure 30: UK retail brand shares of antifreeze, 2002-06
• Companies and Products
• Key points
  • Figure 31: Leading forecourt operators by brand/fascia, 2006
• Major Oil Companies
• Esso
• BP
• Shell
• ChevronTexaco
• Total
• Other Oil Companies and Fuel Retailers
• Jet
• Murco
• CPL Petroleum
• Gulf
• Supermarkets
• Tesco
• Morrisons
• Sainsbury' s
• Asda
• Others
• Halfords
• Tetrosyl
• Brand Communication and Promotion
• Key points
• Promotional support fluctuates but demand is down
• Opportunities for brand support are limited
  • Figure 42: Main monitored media advertising expenditure on petrol/diesel, oil and antifreeze, 2003-06
• Expenditure on engine oil collapses
• Antifreeze receives virtually no support
• Global petrochemical companies dominate promotional support
  • Figure 43: Main monitored media advertising spend on fuel, by advertiser, 2003-06
• Below-the-line promotion continues to be important
• Channels to Market
• Key points
• Petrol and Diesel
• Outlet numbers dwindle as competitive pressures intensify
  • Figure 44: Number of petrol filling stations in the UK, 2002-07
• Forecourts are increasingly looking at alternative ways to generate income
• Retailing of other fuels continues to expand
  • Figure 45: Alternative fuel sites in the UK (LPG, biodiesel and bioethanol sites), 2006
• Engine oils
• Garages and supermarkets benefit from changing consumer practices
  • Figure 46: Retail sales of engine oils, by type of outlet, 2002-06
• Antifreeze
• Supermarkets also making good progress in antifreeze market
  • Figure 47: Retail sales of antifreeze, by type of outlet, 2002-06
• The Consumer 1 -- Fuel -- Petrol and Diesel Purchasing Behaviour
• Key points
• Petrol and Diesel
• Diesel consumption grows strongly against a backdrop of sluggish petrol sales
  • Figure 48: Purchasing of fuel (petrol/diesel) in the last 12 months, 2002-06
• More cars on the road driving fuel usage
• Diesel usage is growing
• ABC1 family and full-time earner groups are most important purchasers
  • Figure 49: Heavy* usage of fuel (petrol/diesel), by gender and Mintel' s Special Groups, 2006
• Standard fuel blends remain popular with most drivers
  • Figure 50: Types bought most often, 2002-06
• Supermarket own-label records upward growth
  • Figure 51: Usage of branded and supermarket own-label fuel, 2002-06
• The Consumer 2 -- Engine Oil and Antifreeze Purchasing Behaviour
• Key points
• Engine Oil
• Decline in purchases mirrors fall in sales
  • Figure 52: Purchasing of engine oil in the last 12 months, 2002-06
• Non-users are rising
• Broad spectrum of purchasers with males especially important
  • Figure 53: Purchasing of engine oil, by gender, age, socio-economic group and two full-time earners, 2006
• Top-up vs. topped up
• Competition from supermarkets is growing
  • Figure 54: Where engine oil is usually bought, 2002-06
• Sales strong influenced by seasonal factors
  • Figure 55: Purchasing of antifreeze for cars in the last 12 months, 2002-06
• Males C2D consumers are key purchasers...
  • Figure 56: Purchasing of antifreeze for cars in the last 12 months, by gender, socio-economic group and presence of children, 2006
• ...as are young families
• Appendix
• Abbreviations
• ACORN
• Advertising data
• Abbreviations
• Internal market environment
  • Figure 57: New cars registrations and UK car parc, 2002-12
  • Figure 58: UK new car registrations, by fuel type, 2001-05
  • Figure 59: Type of car (only car or most recently obtained car), 2002-06
  • Figure 60: Engine size (only car or most recently obtained car), 2002-06
  • Figure 61: Registration year (only car or most recently obtained car), 2002-06
  • Figure 62: Agreement with attitudinal statements on the environment, by gender, age, socio-economic group, marital status, lifestage, presence of children, Mintel' s Special Groups, working status, tenure, region, ACORN category, technology usage, household size and car ownership, 2006
• Broader market environment
• Attitudes towards the car
  • Figure 63: Agreement with the statement ' I' m interested in the car' s mechanics (engine etc)' , by gender, age, socio-economic group, marital status, lifestage, presence of children, Mintel' s Special Groups, working status, tenure, region, ACORN category, technology usage, household size and car ownership, 2006
  • Figure 64: Agreement with the statement ' I am possessive about my car' , by gender, age, socio-economic group, marital status, lifestage, presence of children, Mintel' s Special Groups, working status, tenure, region, ACORN category, technology usage, household size and car ownership, 2006
  • Figure 65: Agreement with the statement ' For me my car is like a second home' , by gender, age, socio-economic group, marital status, lifestage, presence of children, Mintel' s Special Groups, working status, tenure, region, ACORN category, technology usage, household size and car ownership, 2006
  • Figure 66: Agreement with the statement ' I do small repair jobs on my car' , by gender, age, socio-economic group, marital status, lifestage, presence of children, Mintel' s Special Groups, working status, tenure, region, ACORN category, technology usage, household size and car ownership, 2006
  • Figure 67: Agreement with the statement ' I' m not interested in the car, and I have as little as possible to do with it' , by gender, age, socio-economic group, marital status, lifestage, presence of children, Mintel' s Special Groups, working status, tenure, region, ACORN category, technology usage, household size and car ownership, 2006
  • Figure 68: Agreement with the statement ' The car is essential for me to make the most of my leisure' , by gender, age, socio-economic group, marital status, lifestage, presence of children, Mintel' s Special Groups, working status, tenure, region, ACORN category, technology usage, household size and car ownership, 2006
  • Figure 69: Socio-economic status, by gender, 2002-12
• Consumer 1 -- Petrol and Diesel Detailed demographics
  • Figure 70: Purchasing of fuel (petrol/diesel) in the last 12 months, by gender, age, socio-economic group, marital status, lifestage, presence of children, Mintel' s Special Groups, working status, tenure, region, ACORN category, technology usage, household size and car ownership, 2006
• Petrol
  • Figure 71: Purchasing of petrol in the last 12 months, by gender, age, socio-economic group, marital status, lifestage, presence of children, Mintel' s Special Groups, working status, tenure, region, ACORN category, technology usage, household size and car ownership, 2006
• Diesel
  • Figure 72: Purchasing of diesel in the last 12 months, by gender, age, socio-economic group, marital status, lifestage, presence of children, Mintel' s Special Groups, working status, tenure, region, ACORN category, technology usage, household size and car ownership, 2006
• Consumer 2 -- Engine Oil and Antifreeze -- Detailed Demographics
• Engine Oil
  • Figure 73: Purchasing of engine oil in the last 12 months, by gender, age, socio-economic group, marital status, lifestage, presence of children, Mintel' s Special Groups, working status, tenure, region, ACORN category, technology usage, household size and car ownership, 2006
• Antifreeze
  • Figure 74: Purchasing of antifreeze for cars in the last 12 months, by gender, age, socio-economic group, marital status, lifestage, presence of children, Mintel' s Special Groups, working status, tenure, region, ACORN category, technology usage, household size and car ownership, 2006
• Consumer 4 -- Further Analysis -- Detailed Demographics
  • Figure 75: Cluster groups, by gender, age, socio-economic group, marital status, lifestage, presence of children, Mintel' s Special Groups, working status, tenure, region, ACORN category, technology usage, household size and car ownership, 2006
  • Figure 76: Cluster groups, by agreement with the lifestyle statements, 2006
  • Figure 77: Cluster groups, by car ownership and average annual mileage, 2006
  • Figure 78: Cluster groups, by car ownership, 2006
  • Figure 79: Cluster groups, by intended next vehicle, 2006
  • Figure 80: Cluster groups, by purchasing of fuel (petrol/diesel) in the last 12 months, 2006
  • Figure 81: Cluster groups, by purchasing of engine oil and antifreeze in the last 12 months, 2006
  • Figure 82: Cluster groups, by agreement with additional lifestyle statements on cars, 2006
  • Figure 83: Cluster groups, by agreement with attitudinal statements on the environment, 2006