FT - Refuel Big Debate

Industry experts have told independent fuel retailers to continue to invest in their business, despite constant vilification by the media and other agencies who are pushing the public to go ‘electric’.

Chairing a panel of well-respected industry faces at the recent Refuel UK networking event in Windsor, Michael O’Loughlin, with 25 years retail experience in the industry, including at Applegreen and MFG, said: “This is about championing our industry and looking at the positives. We’re in this for the long haul – 2030 is just a number.

“We hear all about the electric side of the business - the problems and challenges, and everyone is blue-sky gazing into the future and trying to wonder what’s going to happen. But today we have 8,500 wonderful locations in the UK, with big traffic flows, on very valuable pieces of land.”

When considering the options for petrol filling stations operators, the message was ‘stay and invest’, but make sure you have a plan.

“Whatever the size of your business - if you have five sites, 10 sites, two sites - you should have a 20-year business plan for that,” stressed O’Loughlin. “It might be to trade for 10 years, and it might be to partly decommission your sites; or to sell - Christie & Co say there’s more buyers than sellers at the moment.”

He dismissed the view he’d heard from an oil company executive who said that petrol stations would be deserted in 10 years’ time: “It’s complete rubbish. Maybe we will start to see fuel volumes fall away, but we can put airlines on islands – car tyres will still need air; cars will still need to be washed.”

He also questioned the merits of installing electric vehicle charging equipment for many dealers and to look at what the ‘big guys’ are doing.

“All the electric vehicles sold up to now – 600,000 of them – they’re all in the driveway, charging up at night-time while their owners are asleep. So I would be very suspicious about installing EV on your forecourt and going to the expense of that.

“The supermarkets are all in fuel for the long haul. Morrisons are re-lining the tanks on one third of their estate at the moment – they want to be in that business.”

He was sceptical about the BBC’s view that ‘the revolution has begun, everyone is moving to EV’, but said 39% of all electrified cars sold were hybrid, “so they’re still on your petrol stations buying fuel every week”.

Looking at the latest new car registrations figures and predicted rate of growth, he estimated there would be less than two million EVs on the road by the end of the decade – “so we have a long time in this game”.

The expert panel featured PRA chairman Brian Madderson; Steve Rodell, managing director of retail at Christie & Co; Richard Cox, managing director of Top 50 Indie the Kay Group; and Ed Wheeler, managing director of Europump, event sponsor.

They considered the challenges: the growing cost of staff, fuels transition; as well as the opportunities - shop; drive-thru, car washing, alternative use - in a stimulating debate.

Key advice

*Stay as you are and invest – consider EV, develop shop, improve facilities and future proof infrastructure (tank lining); add food service, improve valeting, self-scan epos

*Sell – market experts maintain there is still a strong demand for forecourts.

*Go unmanned – remove low-volume shops and replace with automated car wash (no staff required).