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

The brand plan

06 April, 2006
A well-known name above your door could work wonders
Page 27 
As profits from fuel have steadily decreased, oil companies and independent fuel retailers alike have increasingly sought to boost their businesses by focusing on the forecourt shop.
Joining forces with a well-known grocery brand or food-to-go provider has proven an invaluable tool in driving footfall, and over the past year such alliances have continued to develop, with oil companies linking up with major retailers and more independents signing up to the symbol groups.Undoubtedly the biggest brand alliance of 2005 was that of BP linking up with Marks & Spencer Simply Food. Currently running on eight trial sites, the joint venture has brought M&S' popular, high-quality, fresh food and grocery lines into the forecourt arena, and has attracted much speculation, including claims that it could be rolled out across BP's entire Connect network of some 300-plus sites.Greg Hodge, global forecourt analyst at Planet Retail, says that although such predictions are somewhat premature, the format has been a big hit with consumers and he expects it to be expanded over the next year."We can safely say that BP is benefiting immensely from the brand alliance with M&S, as the retailer's superior quality is very attractive to convenience shoppers," he says.In another trial, BP launched its first franchised Connect stores in December, incorporating its popular Wild Bean Café concept. Two existing Connect sites, in Wigan and Ashton Under Lyne, were sold to independent group Motor Fuels Limited, run by Sailesh Sejpal and Sharad Raja - known as Sej and Raj.The Wild Bean Café format was particularly attractive to Sej, who was well aware of the impact of a successful brand. He said at the time: "We believe this is the way forward for us as independent retailers."It's a very successful food-to-go operation. Where office workers go to Starbucks for their coffee first thing in the morning, motorists use the Wild Bean Café." He commented that he was also keen to see how the BP and M&S 'marriage' would develop.Meanwhile, Planet Retail's Hodge says that BP is expected to have around 20 franchised Connect sites by the end of 2006, and he believes other oil companies could follow suit with their store formats."By opening up the brand to franchisees, BP will be able to increase its influence across the country without investing too heavily in new sites," he says."By operating the Connect concept as a franchise, BP will also be able to set up fuel agreements with operators that may have formerly used a rival as a supplier."With Esso looking to expand its On the Run format across the south east, Hodge believes it is likely the company will also turn to a franchise arrangement in the future. "For the oil majors, the franchising of their store concepts enables them to gain access to more retail sites and increase their market presence," he says.Symbol groups have maintained a strong presence in the forecourt sector, with more independents signing up to their fascias.Leading convenience chain, Spar, now has 423 stores on forecourts. Budgens currently has 42 independent forecourt stores but has plans for further developments. These will include a new store with a BP dealer in Honiton, Devon, due to open this month and a second Budgens store with Forecourt Trader of the Year 2005, Susie Hawkins at the Simon Smith Group's Monmouth site.Joining a symbol group allows the independent retailer to benefit from increased buying power and improved supply chain networks.Retailers also have access to regular support and guidance to help them develop their stores.Mike Fitton, head of retailer support at Budgens, says: "We work with retailers from the outset - as soon as they find the site we are there to help them through it, from store planning, to merchandising and staff scheduling."Budgens entered the independent arena in 2000 and has built a strong reputation, with two Forecourt Trader of the Year winners - Susie Hawkins and Jonathan James - operating Budgens stores. Fitton confirms that the company always aims to recruit progressive retailers who will uphold the Budgens brand."We're looking for retailers with potential high turnover sites. They will already be doing - or have the potential to do - a weekly turnover of £25,000. However, we're not just in it for the turnover. We want quality rather than quantity. We want the right stores, in the right locations, with the right retailers," he says.The most obvious advantage in joining a symbol group is the branding association of a recognised fascia."The everyday customer who is unfamiliar with the store set-up will associate the branded fascia with other sites they have visited before," says Planet Retail's Greg Hodge. "As long as the customer has had a pleasant experience on their previous visit they are likely to enter the store and purchase goods."For fuel retailers, such branding is particularly important when it comes to the shop. According to the Institute of Grocery Distribution's (IGD) report 'Opportunities for Growth in Forecourt Retailing', the sector still suffers somewhat from poor public perception of what a modern forecourt store can offer.The problem is that historically food and fuel retailing have not gone hand in hand. As a result, forecourt stores are still not always seen as automatic top-up shopping destinations and may lose out to more traditional c-stores. This is despite modernisation and their many benefits, not least of all, easy parking. Having a well-known grocery brand above the door can definitely help."Having a branded fascia gives the consumer the confidence that when they walk in the door they will find what they want," says Mark Dallinson, symbol general manager at Palmer & Harvey (P&H). "The oil companies have got very powerful petrol brands but some have not got such powerful shop brands - so the consumer confidence is in the fuel rather than the shop offer. What we and other symbol groups can bring is consumer confidence in the shop. "Joining a symbol group gives the retailer a distinctive corporate style and a recognised brand. We then provide a structured marketing and support programme, which will hopefully develop the store and ultimately increase its profits."Palmer & Harvey's Mace fascia was relaunched last year with a new-look logo. It has now been fitted to 103 stores, the majority of which are new sites. Some of these were acquired when P&H took over the Mace brand in Scotland last summer. "That was a big boost for us," says Dallinson. "It means that we've now got the fascia for the whole of the UK."The Mace brand can now be found on 220 forecourts across the UK, making up almost half of the 451-strong Mace estate.The majority of these forecourt stores are branded as Mace Express, a format that was developed specifically with the forecourt sector in mind.Dallinson adds: "Of the 103 stores we've fitted with the new-look fascia, 49 have been forecourts. Just under 50% of our new members are coming from the forecourt arena. Forecourts are extremely important to Palmer & Harvey in general. We currently service many of the major petrol companies."Key Lekkerland's KeyStore fascia has also been updated in the past year, along with its package of internal graphics and marketing support material. New store designs have also been introduced to cater to retailers' different trading demands.There are currently 346 member stores of which around 25% are forecourts. Phil Marsh, owner of Clerkenleap Service Station in Worcester, opened a new KeyStore on his site in December and saw sales go up by 35% in the first two months of trading. Phil has more than 20 years' forecourt experience, running BP licensed or franchised sites in the south west. He felt that joining a symbol group would be the right move to kick-start his business.The once awkward, narrow, 450sq ft store has more than doubled in size and now has a clean, bright feel. Phil has increased his product range and added new categories, including alcohol. Sales from the extended hot food-to-go offer are up by 25%.With food-to-go continuing to be a growth area for forecourts, more retailers are investing in branded in-store fixtures.According to the Energy Institute's UK Retail Marketing Survey 2006, 341 sites are now operating such a fixture - an increase of 71 sites over the past year. Planet Retail's Hodge says: "With foodservice items offering a much higher profit margin than traditional grocery goods, forecourt operators are looking to increase their forecourt provision. With many operators having experienced teething problems in terms of running their own foodservice counters, they are now turning to the likes of Subway for franchise alternatives."According to Hodge, the UK is mirroring the US where teaming up with third-party foodservice operators such as Costa Coffee and Subway or joining one of their franchise schemes is already very common.Good coffee, in particular, he says, can be crucial for attracting repeat visits from customers. BP and Esso have already tapped into this potential and Hodge believes coffee is set to become a major battleground for forecourts in the future.Subway's fresh sandwich franchise offers an attractive fast-food solution for forecourts, with no need for grills or fryers. The Subway concept aims to keep franchisee investment low and the operation simple, with a minimum floor area of 300sq ft required.The chain has ambitious expansion plans, with franchises currently operating on 11 forecourt sites in the UK and Ireland and another 30 in development. Five of the existing stores are in Spar outlets, with another six due to open this year, the majority of which will also be on forecourt sites.Country Choice also provides a complete branded foodservice solution for forecourts with Bake & Bite. Some 755 forecourts have now adopted the Bake & Bite brand - 450 of these have branded equipment solutions in-store, while a further 305 just sell Bake & Bite products.The Bake & Bite brand was re-launched last year after much consultation with retailers and consumers. The bold new imagery is instantly recognisable, with every aspect of the package designed to project a professional in-store feel, which not only looks good, but also helps instil confidence and trust in the consumer. The brand is versatile enough to fit any outlet, and Country Choice can provide everything, including an ever-increasing range of products, a complete range of branded equipment solutions, packaging and free point of sales material. There are even branded staff uniforms, as Country Choice's research found that this raised customer perceptions, indicating that there was a dedicated employee in charge of it.PLAY YOUR CARDS RIGHTModern forecourts are expected to carry an increasing variety of stock and Card Connection can help retailers to do this, providing a range of greetings cards and branded merchandising solutions, without any initial financial outlay through its consignment approach.Card Connection franchisees develop relationships with retailers across their specific regions and supply product ranges to the sites on a 'consignment' basis. This is one step beyond sale-or-return and means the stock is installed free of charge to the retailer. Unlike sale-or-return, shop managers don't have to purchase the product up-front - they only pay for the stock they sell to their customers.Display equipment is often available on free loan and franchisees will visit sites on a regular basis to update the range, bringing new designs to maintain fresh and enticing displays.



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Weekly retail fuel prices: 15 January 2018
RegionDieselLPGSuper ULUL
East124.9460.90131.85122.27
East Midlands124.34132.31121.54
London125.0662.90132.42122.10
North East123.94133.63121.07
North West124.1658.50132.51121.18
Northern Ireland123.4169.90128.40120.85
Scotland124.5774.90130.88121.33
South East125.1561.40132.52122.48
South West124.73130.24121.91
Wales124.44128.57121.19
West Midlands123.7465.23132.27121.20
Yorkshire & Humber123.9161.90132.74121.12

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