Forecourt Trader - 30 years at the heart of the fuel retailing community

Investing in growth

Many dealers continued adding to their estates in 2016, driving up demand, and therefore the value of sites fuelling continued optimism and investment in the fuel retailing sector.

Clive Sheppard, director of Top 50 Indie Chartman:

"2017 promises to be our most exciting year yet. Ongoing investment by the forecourt industry in quality developments and refurbishments will further enhance our image with the public, and build on the trend for millennials to shop for convenience, location and food for today. Operators who embrace change and development will be the main beneficiaries of these changing spending habits. Simple steps like being able to offer contactless payment already give us an advantage over some of the major grocers. The wider picture shows increasing interest in the sector from outside, attracted by the strong cash flows generated, and which seems likely to underpin property values. Opportunities will arise through new profit centres, such as forecourt launderettes and e-commerce participation such as deliveroo, both of which Chartman is currently pursuing. One possible challenge could be higher inflation, where a particular threat would be significantly higher fuel prices."

Ramsay MacDonald, retail director, Certas Energy:

"We are excited by the prospects for the UK's independents in 2017 with talented entrepreneurs raising industry standards through investment in people, facilities and the development of state-of-the-art forecourts and stores.

"The focus on food will continue with fuel providing the footfall driver while the search for differen-tiation will develop further as new roadside offers, with High Street origins, become commercialised. The consumer revolution will continue with more people than ever considering a filling station to be their 'local shop'. It's been a fantastic turnaround and it's hurting the supermarkets so we must all be ready for the backlash."

Brian Madderson, chairman, PRA:

"The next year is going to be a busy one for dealers and the PRA. We expect UK pump prices to continue upwards propelled by further weakness of Sterling versus the dollar and strengthening oil prices due to the recent OPEC and other producers output agreement. UK average retail fuel prices could be heading towards 125ppl to 130ppl by the second quarter. The upside of this is that government worries about Brexit, the economy and inflation, plus robust lobbying by PRA, should encourage the Chancellor to cut fuel duty by 3ppl in the April Budget.

"Ultra Low Emission Vehicles (ULEVs) will continue to be heavily promoted but actual usage on UK roads will still be minimal.

"With oil companies, importers and retailers declining to take up the challenge of introducing E10 as it reduces mileage performance and is non-compliant in certain engine designs, the government will not mandate the introduction."

Andrew Cox, director sales & marketing, Valero Energy Ltd:

"2017 promises to be a very positive year for the independent forecourt sector. We have seen volumes growing on a like-for-like basis over the past few years and the convenience market is buoyant. Forecourts are ideally placed to capture this growth and the retailers who continue to invest in their locations and provide excellent customer service will maximise this opportunity. During 2016 we saw significant consolidation and I see that continuing, albeit at a slower pace, as the larger Indies look to acquire more locations. Meanwhile, Valero continues to invest in its infrastructure and provide the best fuel delivery system to ensure continuity of supply.

"While smaller sites may feel pressure in 2017 from the larger retailers, there will still be great opportunities for those that look to build their business by investing in their locations and aligning with key brands."

Mary Wolf, managing director, UK & Ireland, Phillips 66:

"If the shift towards higher numbers of independently (rather than company) owned sites continues, this will create more opportunities for ambitious dealers and dealer-focused suppliers, such as Jet, provided that their dealer offers and supply contracts are transparent. Dealers understand their customers and their local market better than anyone else, so are more likely to turn to those suppliers who offer compelling retail service choices and a range of image options, rather than 'one size fits all' mandatory contractual clauses.

"On the consumer side, we anticipate increased demand from discerning consumers for quality product, whether that be premium or normal grades. But forecourt retailing in 2017 goes far beyond fuel alone: operators have to offer something unique, go the extra mile, or make their forecourts an indispensable part of their local communities.

Ultimately, the 'winners' of 2017 will be those who can deliver on the fundamentals of fuel supply: quality and competitively priced product that is delivered in the right timeframe to a well imaged site. Only then will additional initiatives or incentives produce any real value for the dealer."


News Review of 2016

January
Intrepid independents are followed by the supermarkets in cutting diesel and petrol to just less than £1 per litre. MFG pilots Morrisons convenience stores on its forecourts.

February
US private equity giant Lone Star buys the UK's biggest independent service station owner and operator MRH. Essar Oil UK says it hopes to have 100 sites under its new retail brand by the end of the year.

March
While growth in Forecourt Trader's Top 50 Indies means they now account for 25% of UK sites, supermarkets' share of the fuel market falls for the first time in 15 years.
April
Turnover at Applegreen plc tops 1bn in its first set of full-year results following its flotation. BP rolls out Ultimate which it describes as its biggest fuel launch in the UK in 10 years. Asda's diesel is still 99.7ppl but other prices are edging up.

May
Gerald Ronson celebrates 50 years in roadside retailing. Tenth-ranked Top 50 Indie MPK sources £14m to fund growth. MFG strikes deal with Booker to supply 300 shops and rebrand them Londis or Budgens.

June
Asda signs deal to build six new sites. Park Garage Group agrees a supply deal with Bestway. Former Tesco superstore chief Richard Baker joins MFG. Rising oil prices drive average fuel prices up about 3ppl in a month.
July
Forecourt retailers say it's business as usual after the UK votes for Brexit. US conglomerate Dover signs $780m deal to buy Wayne Fueling Systems. Euro Garages bosses Mohsin and Zuber Issa win international retailing award.

August
HMRC wins appeal in duty deferment case. BP agrees logistics deal with Hoyer. Jet unveils Snacks on the go concept for dealers. RAC accuses retailers of using Brexit as an excuse for not cutting prices.

September
MFG buys two Top 50 Indies Synergie Holdings and Roadside Group adding 29 sites. Applegreen reveals plans for its first motorway service areas on the UK mainland. Consultation on E10 fuel is delayed.
October
Sewell on the go is crowned Forecourt Trader of the Year. OPEC strikes deal with Russia to limit production in bid to boost the price of oil. Dealers brace themselves for the results of revaluation of business rates.

November
Euro Garages starts trial of six Sainsbury's Local stores on its forecourts, and merges with Continental operator EFR to form group with 1,450 locations. Giles Taylor and John Diviney replace Bill Ahearn and Micheal O'Loughlin as managing directors at Rontec and Applegreen.

December
Rontec pilots Morrisons convenience stores at 10 locations. BP dealers complain of fuel shorts after Hoyer takes over fuel deliveries.

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Weekly Fuel Prices 26 June 2017
RegionDieselLPGSuper ULUL
East116.3455.90124.84115.31
East Midlands115.68126.68114.83
London116.0057.57125.95115.31
North East114.7059.90124.65114.44
North West115.84125.61115.03
Northern Ireland114.85122.73114.35
Scotland115.9949.70122.05114.98
South East116.4558.90125.91115.57
South West116.13124.79115.18
Wales115.4656.90124.56114.28
West Midlands115.8457.40125.93115.11
Yorkshire & Humber115.56127.20114.93

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