Expect more of the same when it comes to accusations of profiteering in the sector in 2025. However, from disruptive investors to all-electric forecourts, the industry could witness plenty change over the next 12 months, says commentator Jan Milkula in his new year outlook.
According to one dictionary definition, ‘Prognostication’ is “a judgment or the act of making a judgment about what is likely to happen in the future”. As a general rule, when it comes to looking at a whole year ahead, this column tends not to do too much of that – long experience has shown that the old crystal ball is a bit unreliable in a world where things happen, and change, so rapidly. But since someone asked – what might we expect for the forthcoming year as far as petrol retailing is concerned?
One thing that this industry can rely upon is that it will always be criticised for the price of fuel. Regular as clockwork. Someone notices that the headline ‘oil price’, whatever that really means, has dropped, and you’ll be told that you haven’t reduced your prices far enough or quickly enough. If the oil price rises, you’ll be told that you raised pump prices too soon. Heads they win, tails you lose. It’s the rules of the game. So, expect more of the same for 2025 and you won’t be disappointed.
Another near certainty for the coming year is that at some point our old friends at the CMA (Competition and Markets Authority) will issue yet another statement decrying what they perceive as ‘weak competition’ in this industry, and the consequent need to do something about it. As discussed last month, they and their predecessors have been doing this at regular intervals for at least the past 40 years, so why should 2025 be an exception? Who knows what solution they might propose next time around: perhaps some revolutionary new idea from Elon Musk that involves fuel prices being sent to every mobile phone once an hour using AI, without the option to turn off the alerts. It’s the kind of thing that would appeal to politicians: a mixture of high-tech and compulsion.
But that does bring us to the more interesting possibility of some change to the ownership of retail networks.There are always rumours in this industry of someone selling off large numbers of sites, and of potential new entrants into the market who will shake it up. Usually they’re just that, rumours, which come to nothing. But over the past few years there has indeed been some re-shuffling of the pack, with long-established alliances ending, and groups of sites being swapped between the few real network owners. In that sense it is reminiscent of the pub industry a few years ago. Now given that the industry is dominated by a few major players, any further consolidation would inevitably result in a drawn-out investigation by the CMA, but what if there really is some new investor with a desire to enter the market big-time?
Something else we can expect to see in the next 12 months is more petrol stations going all-electric: both new-build and knock down rebuilds where hydro carbon fuels are either completely removed, or left as a token legacy line with just a couple of pumps around the back somewhere, while the rest of the forecourt is given over to row upon row of EV chargers. Add a coffee or hot-food takeaway to the shop and welcome to the fuel retailing site of the future. And the future is already here.
Also there could well be a little ‘back to the future’ in 2025. For years we’ve seen dirty and expensive to handle cash slowly fading out of all retail sectors. And most retailers have been glad to see it go, all waiting for the day that contactless payments are used for just about every purchase. Hence, it’s not exactly a pleasant surprise when the British Retail Consortium put out a report saying that usage of cash has been increasing for the second year running. Surely a good chance that we’ll see that continuing this coming year.
It’s tempting to sum-up the prospects for 2025 in a few words: there might be something new, but in general expect more of the same, but worse. Happy New Year!
- Jan Mikula represents nationwide franchise accounting company EKW Group – ekwgroup.co.uk
