An instant 4% profitability boost for major Swedish fuel retailer

17 June, 2019

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Preem is Sweden’s largest fuel company, responsible for 80% of the country’s refinery capacity, and exporting half of its petroleum overseas.

The retail side of the business provides gasoline, diesel, and heating oil to consumers, through a nationwide network of 570 retail gas stations.

Preem’s challenge

Preem’s pricing team did not have any software in place to monitor local market prices, so the collection of data was a slow, manual process – with dealers checking nearby competitors’ prices and calling them in.

Most of Preem’s competitors were following the same process themselves, which left every retailer in a similar stagnant position.

Preem was looking for a way to elevate itself above the competition and decided that faster, fact-based price changes would be required – what Preem termed “sustainable pricing” internally – to gain fuller control over margins and volume at each fuel outlet.

Our task

To gain an edge over the competition, Preem approached us to help them implement an agile, sustainable pricing strategy that would…

  • Improve operational efficiency
  • Increase profitability

What we did

We supplied Preem with a fully integrated fuel price management platform, featuring high levels of automation and an exception-based approach – enabling rapid response to competitor activity and market volatility.

This new setup also gave the retailer the freedom to exchange data between field offices and head office, which meant price adjustments could now be reviewed and authorized quickly at local level when required.

Crucially, the automation of processes allowed more time for Preem’s pricing analysts to leverage the power of prescriptive analytics and focus on the sort of high-value analytical decision-making that would deliver long-term competitive advantage.

Preem’s results

  • An immediate 4% increase in profitability
  • Market share growth from 9% to 12%
  • Insight to close 50 non-performing sites
  • Consistently optimized pricing performance

“We now have the ability to drive local markets by implementing uniform pricing throughout a city, which we couldn’t do before. We’re able to take greater responsibility for margins and avoid local price deterioration – which, in the past, would have led to losses.”

Marcus Larsson, Pricing Manager, Preem

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