BP's Independent Gas Stations are Hurt by the Spill

Business is reported to be down about 20% at some BP stations. This is even more severe than after the Exxon Valdez accident when Exxon lost about 5% of its business, some of which it has never regained. As a result, reputation experts began to estimate that reputation was worth about 5% of revenues on an annualized basis. It actually could be worth more, depending on the severity of the reputation damage that is done.

Among the victims of the BP disaster are the owners of BP gas stations. In the US,virtually all of the dealers are independent owners and operators--they have no relationship to BP other than selling gas under the BP brand. They are suffering and taking flack from consumers. Gas stations are being picketed.

A consumer has only three ways to show their disgust with BP: 1) they can urge their member of Congress or Senator to punish the company, 2) they can boycott BP gas, or 3) they can divest themselves of BP stock, if they hold it or urge their company to divest the stock from its portfolio.

This is a situation in which there is no upside for the dealers. They have a business relationship with a bad actor. As a result, the diminished brand equity and reputation of BP will continue to hurt them. They can scream and explain themselves all they want, and we can all feel sorry for them, but they are collateral damage. If consumers continued to buy BP gas they would not only be supporting the gas station owner, but also directly benefiting BP. I feel sorry for the station owners, but there is no way I am going into a BP station.

We've seen this situation in other markets. Toyota dealers are independent of the company, yet they were suffered great damage during the Toyota recalls for acceleration and brake problems. Most car dealers are independent. What can they argue? "Buy a car from me because I have nothing to do with making this lousy car"? Sorry, but brand associations are what lead you to make your purchase of the dealership in the first place. You linked yourself to the brand, for good and for bad. You are now suffering the impact of that brand association. We need to remember that there is truth in what our Mother's always told us: "we will be judged by the company we keep".

So, we can feel sorry for the independent BP dealers, but they benefited from the great reputation that BP had for so long--I'm sure that is why many of them wanted to own BP stations. They chose wrong brand association. Life is not fair.