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

The dark side

06 August, 2007
Every silver lining has its cloud....
Page 14 
Last month we observed that on the usual indicators of shop efficiency, the forecourt shop had seemingly come of age and was a paragon of success. Surely even the most hard-bitten and cynical petrol retailers had something to smile about? The response from some readers and clients was slightly more sanguine. "Yes," they said. "We're all working twice as hard as 10 years ago - but for the same money."
There's no doubt that the continuing growth in forecourt shop sales has been impressive. Look at May's figure of £61,600 (exc VAT, remember) then look at corresponding results from previous years.In May 2003 we recorded £50,249; in May 2000 it was £39,420; and way back in 1997 it was £31,245. Basically in 10 years we have seen a virtual doubling of shop turnover, albeit with a little help from inflation. Actually, quite a lot of help from inflation - if we strip that out then the real growth in 10 years has been exactly 50% - but why quibble, the results are still pretty healthy. In terms of fuel volumes, May '97 recorded sales were 329,000 litres whereas May this year was 441,000 litres - an increase of 34%.As far as the rewards are concerned, our historic figures show that net profit in May 97 was £1,318 whereas in May 07 it was £2,672. So in 'cash' terms the increase is 103%, and in 'real' terms it's 54%. In other words, to be strictly accurate, the average forecourt trader has seen real shop sales go up by 50% and real net profits go up by 54% in 10 years. So why do they feel that they're running twice as fast just to stand still? There were several recurring answers: first, there's the customers. The perception is that many of today's customers are more trouble than they're worth. Not necessarily in terms of anti-social behaviour - although many clients mentioned the overall increase in aggressiveness - but more in terms of spending little on site but taking up space. This is perhaps a reflection on the customers who use the site simply as a place to use a cash machine, make an electronic payment or get a mobile top-up. Retailers recognise that in theory all of these services provide some direct income and they should also encourage customers to spend some money elsewhere in the shop, but the overriding impression is that these 'customers' actually buy next to nothing while their cars are left parked on all available fuel pumps. Some retailers are also convinced that these service facilities provide opportunities for distraction thefts by organised 'mobs of yobs'. One or two will argue with cashiers about their phone top-up while another couple help themselves to whatever they fancy from the shelves.Secondly, and again linked to the modern forecourt as a place offering multiple services, was a complaint about how little money there is from operating all of these facilities. Retailers remembered that when the mobile phone industry wanted to kick-start the take-up of the pay-as-you-go mobile, it offered retailers around 10% of the sales price as an incentive. Today, the same retailers are lucky to make 2.5% from these services. Another gripe related to this subject was that 'services' ranging from the Lottery through to payment terminals generated large volumes of cash which took a lot of time to count and bank, posed a security risk on site, and cost a fortune in bank charges.Third on the list of complaints was the issue of 'security' itself. Many retailers simply expected to lose a minimum of £50-£100 of fuel a week through drive-offs and nobody would do anything about it. The oil companies and network operators were apparently not interested and the police have 'more serious matters to deal with' these days. On a more topical note was the weather. Not flooded forecourts as such, but the sheer unpredictability of any 'seasonal' demand. Retailers tell us that no matter how detailed their stock order and sales records over the past four or five years, they are struggling to predict just what to order and when.So, while sales records continue to be broken, perhaps we shouldn't assume that everything in the garden is rosy. It would be interesting to conduct a formal controlled survey among the people actually running sites today to see whether the anecdotal evidence that we keep receiving is actually typical, or whether we've simply offered one of our usual services to our clients - agony aunt/uncle.



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Weekly retail fuel prices: 2 October 2017
RegionDieselLPGSuper ULUL
East120.5363.90127.17119.00
East Midlands120.03127.76118.80
London120.3757.90128.81118.85
North East119.80129.71118.46
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Wales120.0459.90126.47118.61
West Midlands120.0865.90128.12118.84
Yorkshire & Humber119.73127.02118.57

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