Forecourt Trader - 30 years at the heart of the fuel retailing community
Retail » Money talk

Money Talk: Following the demise of P&H, is it back to the cash and carry?

For anyone involved in forecourt retailing over the years, the news of Palmer & Harvey's collapse late last November is likely to have been more than a shock more like the end of an era. Unless you're old enough to have worked in this industry for longer than say 20 years, you probably can't remember a time when P&H wasn't the default supplier of just about everything in the forecourt shop, bar newspapers.

Money talk: Blink and you missed it: the 2017 (Autumn) Budget

In the last days before the Budget there had been speculation regarding a specific hit on diesel users with some people suggesting a possible increase in fuel duty on diesel of as much as 2-3ppl which was quite alarming to both the haulage industry and millions of ordinary punters, since pump prices had already gone over the 120ppl mark at many sites across the country.

Money Talk: Deposit Return Schemes - green values or just more red tape?

Depending on your politics possibly the most interesting topic to have emerged from this autumn's round of party-political conferences was the discussion regarding proposals for the introduction of some type of Deposit Return Scheme (DRS) on sales of various bottled or packaged products. It was interesting not least because the subject was raised by Environment Minister Michael Gove who is generally considered to be somewhere on the 'free market', right wing of a party which makes much of its anti-red tape/pro-business stance. Although the recent publicity has concentrated on Mr Gove's intervention, many commentators seem unaware that the Scottish government had already commissioned a detailed study of such a scheme earlier this summer and they have the power to introduce legislation without needing to wait for Westminster to produce a version for England and Wales.

Money Talk: Renting out all or part of your site? Stop and consider this...

Visit many forecourts today and you're likely to come across a familiar sight: parts of the premises sub-let to smaller 'independent' businesses renting some space from the owner to carry out their own activities. The most common, of course, is the hand car wash. In other cases it may be a used-car sales operation or workshop activity. And, in some cases, the actual shop itself is completely separate from the fuel part of the operation.

Money Talk: Make sure you're really paying the National Minimum Wage

The embarrassment must be a PR person's nightmare. Imagine: you represent a very large national retailer; one that continually advertises on TV, radio and in magazines and newspapers. Then comes the press release from HM Government across all the news media your client has just been included in the latest 'name and shame' list as the largest of 233 employers across the country who've failed to comply with National Minimum Wage (NMW) regulations. Not only does the company have to repay some £1.5m among 12,000 staff to cover underpayments going back four years, but it also admits that the underpayments are more widespread. Oh, and don't forget the £800,000 fine imposed by HMRC for the original offence. Even if you don't usually have much time for PR-types, you might feel a little sympathy imagining them trying to put some positive spin on this sort of story.

Money Talk: When it comes to sub-letting, it's usually 'see no evil, hear no evil'

In common with many other sectors of the economy, the petrol retailing industry has seen a quiet, persistent, trend over the past couple of decades: call it 'out-sourcing', or 'contractingout', or just 'sub-letting'. The owner of a business or premises feels that some activity isn't producing the financial returns that they feel it should. The question then is what do you do with the problem area or activity? If it's a whole business say an entire forecourt one obvious answer would be to sell it. But often it's not quite so simple.

Money Talk: If forecourt crime is such a problem, why isn't more done to prevent it?

BOSS's Forecourt Crime Index has just appeared in the news pages again, this time because it shows forecourt crime at its highest-ever level during Quarter 1 of this year.

Money Talk: We're back to 'business as usual' - inflation and falling demand...

With hindsight it now seems strange that just a few years ago it looked as if we were entering a period that few retailers had previously experienced deflation whereby retail prices were falling month-on-month. And if you've been watching the news recently and caught the most recent release of inflation data from the ONS, any mention of 'deflation' must seem even stranger. It was therefore interesting to receive a copy of an independent report*, which concentrated specifically on shop price trends to April 2017. Interesting not least for the reason that it was headlined "Four years of falling prices but change in sight". It confirms that as far as purely retail shop prices are concerned, we have indeed been living in a deflationary environment for the past few years but that this period of deflation is now showing signs of ending and is very likely to change to inflation again in the coming months. Their overall result for 'all shop prices' showed a decrease of 0.5% in the 12 months to April 2017 compared to the corresponding period to April 2016 with the commentary that this was the lowest rate of decrease since November 2013. That overall decrease was then split down between food (where price inflation was +0.9%) and non food (where price deflation was -1.4%), which corresponds with anecdotal evidence from shoppers and retailers.

Money Talk: Forecourt crime is more than just drive-offs and no means of payment

Interesting to see that BOSS (the British Oil Security Syndicate) has launched a 'forecourt crime index' to help retailers gauge their own experience against a national benchmark. It's a good idea, and one not to be dismissed, however, the real limitation is that the index appears to relate specifically to drive-offs and NMoP (no means of payment) incidents as if they were the only elements of forecourt crime. Some with long experience in the industry might beg to differ. That's not to suggest that these two problems are insignificant. Assuming that the estimated £30m-a-year cost of these incidents is accurate, that works out at an average of around £3,500 per site nationally.

Money Talk: Selling up and getting-out - there are several ways of valuing a business

Last month we looked at valuing a business for potential sale using its most recent balance sheet and noted several good reasons why any prospective buyer might not take even an accurate and up-to-date balance sheet at face value. In particular, that the figures are at historic cost, and that there may be potential liabilities that are difficult to quantify and show.

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Weekly retail fuel prices: 4 November 2019
RegionDieselLPGSuper ULUL
East Midlands130.73139.73126.64
North East129.5562.90137.10125.31
North West129.9963.90138.40126.48
Northern Ireland128.05133.57124.33
South East131.4566.90139.66127.42
South West130.7674.90137.94126.68
West Midlands130.4059.90137.63126.57
Yorkshire & Humber130.02139.47126.29

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When a major car manufacturer like Ford predicts that sales of its electrified cars will outnumber petrol and diesel models by 2022, does that ring alarm bells about the possible speed of change for forecourts?

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