After MFG got approval for its huge takeover of MRH in 2018, the market was bracing itself for an even bigger deal in 2019, with Sainsbury bidding to take over Asda to become the UK’s biggest fuel retailer by volume. But while the Competition and Markets Authority was willing to allow the first deal after MFG agreed to sell 38 sites, the supermarkets’ plans were deemed a step too far and the rest of the market heaved a sigh of relief as the CMA put an outright ban on the deal.

And while the proposed deal cast a shadow over the first part of the year, the fuel retail sector has continued to thrive, with strong competition for any sites that have come on the market. Ascona Group pulled off the biggest single acquisition of 2019, finally closing the deal for Cornwall Garages’ 17 sites in December, 15 months after they were put on the market. And if any competitors had hoped MFG might take a step back from acquisitions while it absorbed MRH it proved otherwise as it stepped in for two more Top 50 groups, Simon Smith and Symonds Retail.

Other retailers found alternative ways to grow their businesses, such as Kay Group opening three more new-to-industry sites this year, and the Co-op investing in substantial refurbishment of its existing sites. Eddie Jenkinson, national fuels manager, Co-op, commented: "Our refurbishment programme to Co-op-branded sites has seen approaching a half of our petrol estate relaunch with our new look. It was a proud moment when our Broadford, Isle of Skye, filling station was recognised in the 2019 Forecourt Trader Awards, and illustrates how our investment supports and creates value in our communities delivering what our members and customers want and need, conveniently."

Looking ahead, Steve Rodell, managing director retail at specialist business property advisor Christie & Co, commented: "We fully anticipate that the market will remain buoyant throughout 2020." He advised that any concerns about electric vehicles should be limited to the very long term. "Even if the forecast rate of EV take-up is met over the next few years, it will take a very long time to replace the UK fleet of 38 million internal combustion engine-powered vehicles. There will a strong market for conventional petrol filling stations for the foreseeable future, driven by fossil fuelled vehicles."

An indication of the strength of the market, he said, was the number of closed sites being recommissioned. "They may have closed at a time when sites were unprofitable and leased out as car washes or cars sales plots. Where the site size and location permit, it is often now viable to recommission the site because the fuel margins and retail offer enables a positive return on investment."

Looking at the wider issues affecting the market, PRA chairman Brian Madderson detects upward pressures on pump prices, even before the latest tensions in the Middle East.

He explained that the latest changes to the Renewable Transport Fuel Obligation (RTFO), which came into force on January 1, would add at least 1ppl to wholesale prices, and added: "A government determined to back climate change policies will either freeze or increase fuel duty rates in the March Budget. So add in the Middle East tension and I don’t see pump prices coming down any time soon."

He also feels the government has put too much emphasis on development of the EV market in its bid to reduce emissions, and urges it to take a neutral technical position on alternative fuels. He said: "Full consideration by all parties, including vehicle manufacturers, should be given to gasses such as CNG, GTL, LPG and also hydrogen as well as synthetic fuel."

The forecourt sector’s legitimate car wash activities have suffered years of decline due to being undercut by non-compliant, rogue hand car wash operations, but the next decade is looking promising for this side of the business. Years of lobbying have paid off with government, industry, church and charities taking effective action to curb the criminals involved in human trafficking, modern slavery and many other illicit activities. Madderson said: "There will be a much-improved outlook for automated car washes and compliant hand car washes."

News review of 2019

The PRA slams proposals by a group of MPs for ’Pumpwatch’ an independent fuel price watchdog.
Ascona Group grows to nine sites with purchase of Mossdale Service Station.
Kay Group opens fifth new-to-industry site.
MFG rebrands 110 of its shops from Spar to Londis or Budgens.
Christie & Co predicts oil companies will come back into the market to acquire sites.
Essar acquires BP assets to strengthen its capacity for supplying service stations.
Jet unveils a new image prototype at Jet Abbeyside in Selby, North Yorkshire.
Government announces new rules for pump labelling will be introduced in September.
Shell replaces Drivers’ Club with Shell Go+.
BP offers dealers the opportunity to install 150kW ultra-rapid EV chargers.
Gulf gives visitors to the Forecourt Show a preview of new image.
MRH founder Graham Peacock agrees a deal with Texaco to supply 21 of his new sites.
The Competition and Markets Authority blocks a planned merger of Sainsbury’s and Asda.
MFG signs a five-year 1blpa fuel supply contract with BP.
Shell HQ is vandalised by climate change protesters.
Number of public EV charging locations exceeds number of forecourts.
BP replaces Nectar loyalty card with BPme Rewards scheme.
Essar’s network grows to 70 sites with addition of MPK Chester Road.
Award-winning Top 50 Indie Smon Smith Retail is bought by MFG.
Certas Energy adds to company-owned estate with acquisition of two sites in Haverfordwest.
Booker’s Steve Fox joins MFG as managing director, retail.
MPs urge government to introduce E10 to save UK’s bioethanol industry.
Ford and Centrica join forces to offer new electric car service.
Esso’s Nectar promotion notches up two million users since its launch in June.
Applegreen launches low-price fuel at Welcome motorway service area.
Sewell on the go buys freehold of six sites it was renting.
Certas appoints Spar as convenience partner for its 35 sites.
Garner Group wins Forecourt Trader of the Year for second time.
Former forecourt owner Darren Chapman jailed for selling illicit fuel.
ASA rejects Shell and Esso’s complaints about BP Ultimate adverts.
Harvest Energy strikes deal to bring back Total brand to UK market.
MFG acquires fellow Top 50 Indie Symonds.
Rontec extends partnership with Morrisons.
Kay Group opens 7th new-to-industry site.

UKPIA calls for support from new government.
BP Chargemaster claims to be most used public charging operator in the UK.
Hydrogen refuelling service opens at Shell’s Gatwick site.