Shell Philippines to open Adidas and Starbucks stores in its gas stations

Pilipinas Shell Petroleum, the publicly listed Philippine arm of Shell Plc, plans to have retail shops and restaurants in a third of its gasoline refilling stations by 2025 as its seeks to boost revenues beyond fuel.

That could drive non-fuel retail earnings to grow at least 15% a year and build an income stream that provides a quarter of sales, CEO Lorelie Quiambao Osial said in a Bloomberg interview. Shell wants 550 of its 1,300 to 1,400 stations in the Philippines in 2025 to have retail offerings that range from convenience stores to restaurants and shops like Jollibee, McDonald’s, Starbucks and Adidas.

“We are transforming what you’d normally call petro retail stations into mobility destinations,” said Osial. “Before it’s motorists-driven. Now, it’s something for the passengers to enjoy as well.”

Pilipinas Shell’s push to grow its non-fuel revenue while aggressively expanding its gas stations gained focus after it closed its refinery in 2020 and shifted to buy fuel supplies from abroad. The refinery’s closure made earnings more predictable and freed up resources to fund projects with higher yields, like building up its gas station footprint. Currently, a quarter of revenue is from non-fuel retail, Osial said.

The five-year strategy, which started in 2021, costs about 3 billion pesos ($52.3 million) to 4 billion pesos annually. It calls for adding between 40 to 60 stations a year, to bring Pilipinas Shell’s network to up to 1,400 outlets and five mid-range oil terminals by 2025. The plan is a bet on rising personal income and petroleum demand in the Philippines, and expectations that the country’s “low motorization rate” will catch up with other markets, Osial said.