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

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.

Money Talk: Selling up your site and getting out...

In the course of any business there comes a time when the owners think about selling up. If the business is successful they might want to get out at a reasonably early age and enjoy a long retirement somewhere sunny. If the business is very successful, someone may come along out of the blue with an offer to buy them out before they've even thought about retirement. Usually it comes down to age and/or personal circumstances. Nobody really wants to work until they drop especially in a hard business like petrol retailing. Eventually the question that most operators ask themselves is "How much is my business worth?" Usually the next person they ask is their accountant.

Money Talk: Petrol versus pub

How's trading been so far this year for you? While it's too early for any figures, conversations with retailers in both the petrol and hospitality sectors (regular readers will know that at EKW we've had a foot in both camps for many years), suggest that the recent post-Christmas 'quiet period' has been quieter than any they can remember.

Money Talk: Looking for a light in the January darkness

Welcome to January, the bleakest of months what with the darkness and the bills arriving after that little self indulgence at Christmas. And that was just in the good times. Following the events of 2016 (think Brexit, Trump, US interest rate rise, etc), the economic outlook is the most uncertain since the financial crash of 2007/08 and the forecourt retail industry won't be immune to whatever happens to the wider economy.

Money Talk: Autumn in the wilderness

If there wasn't really much drama around the Autumn Statement that the Chancellor delivered on the 23rd of November, there was at least a little of the flavour of pantomime: this was to be the last 'Autumn Statement' because in future the 'real Budget' will move to autumn; so what we used to know as 'The Budget' will be in the autumn, and in its' place we'll have a 'Spring Statement' although the name won't actually change until after the 'Budget' due next March (2017). Confused? Maybe they should just call it 'Springwatch' and 'Autumnwatch'.

Money Talk: Interesting times...

The new Chancellor Philip Hammond, in case you hadn't noticed is due to deliver his first mini-Budget, more formally known as the Autumn Statement, in just a few weeks time on November 23. As these things go, there seem to have been remarkably few hints or leaks as to what might be in it. In fact so few, that some cynics are wondering whether he's going to simply make it up as he goes along on the day, much like other government policy since July.

Money Talk: Make sure you take time to take stock

Sometimes it comes as a bit of a shock to end up discussing something as basic as stocktaking with a retailer. We all tend to assume that the principles of stock management including knowing how much stock is really there are so fundamental to any sort of retail activity as to be beyond the need for explicit discussion. Yet it happens typically when we've just produced a set of accounts using the first real stock figures after months (sometimes many months) of book or system stock values.

Money Talk: How hard are you sweating your assets?

In every business there comes a time when major expenditure is required just to be able to keep that business going. In the world of petrol retailing that could be new tanks and underground plumbing (maybe every 20-25 years); new pumps or rollover washes (maybe every 15 years); new canopy, fascias and lighting (maybe every 10 years or sooner if the site changes supply or branding); or new POS and EFT equipment (again, perhaps every 10 years).

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Weekly retail fuel prices: 20 January 2020
RegionDieselLPGSuper ULUL
East133.4167.40141.10128.52
East Midlands132.93141.67128.44
London133.0565.90142.23128.80
North East131.55139.57126.67
North West132.1066.90140.54127.58
Northern Ireland129.82134.61125.46
Scotland132.65139.08127.50
South East133.80141.93129.03
South West132.9567.90139.13128.12
Wales132.1064.90137.03127.13
West Midlands132.7866.57142.07128.26
Yorkshire & Humber131.9963.90141.14127.34

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