There has been a lot of coverage of the drive-off problem in the media recently thanks to Forecourt Trader’s investigation of the scale and cost of the issue. According to Hugo Griffiths’ excellent report here on Forecourt Trader, the losses to site operators exceed £6.5m in the past five years alone, with an estimated 505 incidents per week. These are truly shocking figures – at least to anyone unfamiliar with the fuel retailing industry.
At the same time the national media have (again) been running articles on the tide of shoplifting that is engulfing all forms of retail business in the UK; much of it involving violence against retail staff. And what is becoming clearer is that both of these issues are believed to involve organised crime. In other words, these are not simply incidents where any retailer can somehow take individual action against anyone caught in the act – even if they manage to identify and/or apprehend someone. It’s become too dangerous for that.
Unfortunately, neither problem is new. As far as the drive-off issue is concerned, I would certainly agree with Hugo’s comments that the figures which he uncovered are very likely to under-state the true scale of the activity. In the 40-odd years that I’ve been involved in fuel retailing, I have known a great many retail operators who simply gave-up reporting drive-offs to the police. In most cases for the simple reason that they rarely received any kind of follow-up from their local constabulary, other than perhaps a crime number. The only exception seemed to be that if they happened to have security TV recordings which featured a person or number-plate already of interest to the police, then officers might receive a visit to request a copy of the video – not that any subsequent activity would result in actually recovering the amount stolen.
And during those 40 years I also noticed a change in how retailers accounted for drive-offs. In the early years many retailers recorded each amount in a specific ‘cost’ line within their accounts – these were predominantly the retailers who would report each event to the police. As time went on, most retailers adopted the practice of simply writing-off a drive-off against fuel sales in their accounts, usually without splitting that between petrol or diesel. The practical effect of that was to make it more difficult to actually determine the true cost of drive-offs from their accounts – you had to run a report from either the POS or back-office software.
As with shoplifting it’s not fair to blame the police for a lack of action. They do what they can with the resources available to them, amongst an ever-expanding range of demands. These are societal problems, and what is required is a fundamental re-think, followed by retailers making changes – which are likely to be painful to some, and expensive for all.
Stick to drive-offs. The solution has been around for decades: Pay at Pump. Invariably this has always been dismissed because it will supposedly decimate shop sales. That’s logical, although perhaps unproven. Somewhat ironically, fuel retailers are already being forced into that by the ever-growing need to provide EV-charging points at sites, which as mentioned last month are all basically pay at pump anyway. In practice, sites wishing to survive the advent of EVs are going to have to expand in area, simply to accommodate EV customers taking time to charge their motor cars. Adding more parking spaces for petrol customers wishing to actually use the site shop(s) would allow those customers to pay for their fuel at pump, and then use the rest of the site facilities without clogging up fuel pumps.
That all requires investment. And it would still leave the possible issue of losing impulse buy sales – although again I’d suggest that this has not been quantified anywhere recently. But the EV revolution is already heading in that direction, so why keep expecting someone to do something about drive-offs when they are really becoming a legacy issue which can be addressed now, if the will is there?
- Jan Mikula represents nationwide franchise accounting company EKW Group – ekwgroup.co.uk
