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

2005

01 January, 2005
As the New Year gets under way we speak to both retailers and oil companies to discover their thoughts and concerns for 2005
Page 14 
PAUL SYKES
MD Shaw Petroleum“We’ll see more sites closing in 2005. The supermarkets have been investing heavily, throwing money at our industry but they really don’t know what it’s all about, so there will probably be opportunities to take over some of these sites. We’d like to expand but only at the right price.Our Hazlewood Group recently had a disappointing meeting with Shell – the company sounded just like Esso did in 1997. Their pitch was to match the supermarkets on price wherever they are – they didn’t seem to have any sort of rational marketing campaign.As for chip and pin, nobody seems to have considered forecourts with their night pay windows – where it’s really difficult to get the terminal to the customer to enter their pin. I think we should have had wireless chip and pin terminals like they do in France, which would be much easier to use. Also lots of people still don’t know their pin numbers and a lot of card companies haven’t issued pin cards.”MARK BRADSHAWCEO Garagewatch“The whole chip and pin system is backfiring. I think they should have retained the need for a signature as well as the pin number because we’ve had customers come in saying it’s their boyfriend’s or girlfriend’s card and they know the pin number for it. What I want to know is who is liable if there is a problem with these transactions?Also people openly tell us their pin number when there’s a queue of people behind them. I read an article where two undercover reporters got hold of 40 pin numbers each by just listening to people at tills. Now there are gangs out there listening out for pin numbers then grabbing the person’s handbag when they leave the shop. In time I expect the general public will realise this is happening, but it will be too late for many. A four digit pin number is far too easy to memorise, I think they should have retained the signature and put a photograph on cards too.Also retailers have had a problem finding chip and pin machines capable of taking fuel cards – they’ve got them now, but it’s all been a bit late in the day.On fuel there’s still a problem with two-tier pricing where independents are being charged a lot more than the majors and the supermarkets.GRAHAM SIMSRetail Director, BP retailThe issues facing the oil industry in 2004 are likely to continue into this year especially around fluctuating prices of crude. Site closures we expect will continue along the same lines as last year. There will be people moving into the industry opening sites, but there will also be sites closing both in the dealer and company owned businesses as competition continues to remain strong and margins are stretched and profitability declines. Some 800 to 1,000 sites closed this year nationwide.On a positive note BP last year signed up several independent dealers as they recognise the strength of offer given by BP and this will continue in 2005.BP Retail has successfully implemented chip and pin across its company owned and dealer networks – BP Retail was the first oil company to implement chip and pin last year.One of the great success stories for BP Retail has been Wild Bean Café – it has grown from strength to strength in its customer offer, and 2005 will see BP developing that offer. The BP Connect format will continue to be rolled out.PATRICK HUDSONDealer Business Manager, JetThe introduction of chip and pin in January will demand a great deal of commitment from retailers not only in staff training but in the training of customers in how to use the new processes successfully and efficiently. It will be very much in the dealers own interest to get to grips with the issues around chip and pin as it is they who will bear the cost of fraud when handling transactions outside the process. We at Jet have introduced our own chip and pin solution to our dealer network, using a highly efficient ‘single box’ terminal which will handle credit card transactions, our Smile loyalty programme and e-top-up payments. The package comes with very competitive credit card charge rates, which have proved very attractive to our dealers.On fuel prices the only thing we can rely on is that the market will remain very competitive and that the international pressures on prices are unlikely to change. This will mean that retail prices will remain volatile and margins will stay under pressure.In terms of dealer opportunities it appears likely that site closures at the lower end of the dealer network will continue but there is an upside with the continuing divestment of many company owned sites by the larger oil companies. These sites can be made to pay by efficient independent dealers. This is an area where Jet has grown rapidly in the past year.PHIL RICHARDSONMD Park Road GarageI think the New Year will bring more of the same. I’m buying product on a Platts basis so when margins are good, I enjoy it.When Asda, or Morrisons, or any of the hypermarkets drops their price, it’s because they’ve got the margin to do so. I don’t think there’s a need to match the hypers anymore, and I think that will continue this year. People are pretty busy and often they don’t want to queue for ages at a supermarket, so we’re starting to see some differentiation in the market and the realisation among dealers that they don’t need to match price. We will have to continue monitoring prices because price is an eye catcher, but people are prepared to pay an extra few pence to get on and off theforecourt more quickly. Dealers can live away from hyper pricing and make a healthy profit. There is profit to be made as long as we don’t try to match the hypers.One problem is that a few of the oil companies are matching the hypers and undermining their own dealers, so I hope this year will see the oil companies being more responsible.I think we will lose more petrol stations in the coming year. Last year there were lots of sites disposed of by oil companies – I acquired two myself – but this year I don’t think we’ll see so many people acquiring sites. However I think there’ll be more investment – more people investing in older property and not building new ones. We’ll also see a lot of investment in environmental protection devices as underground systems continue to age. Personally, I will be investing to protect what I’ve already got, as well as investing in new car wash equipment.I don’t see any more oil companies pulling out of the UK because there is too much profit to be made here at the moment with oil prices being so high. And I think price will remain high for the foreseeable future, but it would be nice if the oil companies would give some of that back to their dealers.JOHN LYNNVP Marketing Europe ChevrontexacoLast year was an exceptional year, with the high crude oil price meaning good upstream margins for oil companies. Refining margins were also healthy, reflecting strong global demand for refined products. In the UK, marketing margins were subject to a continuing volatility in product and pump prices, but by and large, were more robust than those in recent years. However, with crude prices now falling back, 2005 is likely to see a reduction in pump prices but sustained demand-led volatility.We’ll also see further reductions in the number of service stations in the UK though, on the plus side, the remaining, successful outlets will have higher fuel volumes and increasing store sales, especially in areas such as hot food and snacks. Service stations will also need to boost income from new non-fuel sources.I think the relationship between oil companies and retailer-owned outlets will continue to get stronger as the oil firms vie for the best retailers to carry their brand with the potential for better communications, and improved marketing support and negotiated discounts from dry goods suppliers.On the legislation front, the Government has stated that it wants sulphur-free fuels to be widely available at some stage in 2005/6, though discussions are ongoing between the industry and the Treasury about the level of fiscal support needed to put this in place.One of the big events for retailers this year is the introduction of Chip and Pin card technology. Although the responsibility for financial fraud shifted from bank to retailer on 1 January 2005, not all cards were changed over to Chip and Pin by this date so it could be a few months before things settle down.Overall, I am confident that 2005 will be a good year for the majority of petrol retailers, with nimble and entrepreneurial operators getting most of the success.



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Weekly retail fuel prices: 3 December 2018
RegionDieselLPGSuper ULUL
East133.90135.04125.01
East Midlands133.47136.01124.11
London133.76135.49124.09
North East132.51132.59122.24
North West133.2957.70135.66123.62
Northern Ireland131.65130.90123.81
Scotland133.4252.70133.20123.35
South East134.1956.90136.13124.89
South West133.5169.90134.52124.50
Wales133.0079.90131.10123.40
West Midlands132.92136.49123.81
Yorkshire & Humber132.84135.91123.48

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