Just as the ink was drying on this year’s Top 50 Indies report, the sector demonstrated how dynamic it is when the number two ranked MFG agreed a deal to take over its bigger rival MRH, which was occupying the number one spot. The deal will create a company with more than 900 sites, more than twice the size of its nearest UK rival EG Group, which has 375 sites in the UK but can also point to a much larger estate in Europe.
Overall the number of UK sites run by the Top 50 Indies grew again last year up by 54 sites to 2,276. But the numbers show a continued slowdown since last year, which saw an increase of 99 sites compared with 300-plus growth in 2015 and 2016.
The reduction in the rate of growth should not be seen as a loss of appetite however, but an indication of a shortage of available sites to satisfy a hunger for expansion. Most members of the Top 50 are on the look out for new sites, but many are reporting frustration in that search.
Another trend from last year that has continued is the top two buying up fellow Top 50 members to fuel their growth. Even before its swoop for MRH, MFG came out top this year in terms of Top 50 acquisitions, snapping up nine sites from Manor Service Stations and a further 14 from Golden Cross Group as it grew its estate by 34 to 439.
This closed the gap slightly on first-placed MRH which bought Top 50 Chartman’s 10 sites and finished the year with 491, for a net gain of 11. Applegreen accounted for another Top 50 Indie, Carsley Group, and a fifth member of the Top 50, Retail Fuels, was acquired by Harvest Energy.
Applegreen was the second-fastest grower in the list, adding 19 to increase from 72 to 91. Its acquisitions included seven sites from the Carsley Group deal and it also completed eye-catching service area developments at Spalding in Lincolnshire, and Spaldwick in Cambridgeshire.
By the standards of recent years, third-placed EG Group grew very slowly in the UK with a net gain of just three, moving up to 375 fuel forecourts. However, it has established itself as a major European player with about 3,600 sites, and in February it agreed a £2.15bn deal for 762 sites in the US.
Having been the biggest grower last year, fourth-placed Rontec Roadside Retail made no major additions this year, and finished the year with a net fall of one to 240 sites. Outside the top five, the biggest grower was seventh-placed Penny Petroleum, which added eight sites and now has a total of 48, just one behind sixth-placed Park Garage Group.
With the shortage of available sites there has been no change in the Top 10. The highest-placed movement was in 11th position, where Kay Group’s strategy of building new-to-industry sites has seen it climb one place, with the gain of two sites taking it to a total of 20.
With five Top 50 members being taken over by other companies, and Rusdene slipping just under the Top 50 after selling a site to BP, there are six new entries in the listing this year.
Two of the new entries, Park Road Group and George Hammond plc, have been in the main listing in previous years, and Jos Richardson & Son was in the Bubbling Under category last year. The three groups new to the listing KT Investments/Goldline Petroleum, Pearl Forecourts and NTS Retail have been under the radar rather than suddenly growing into the Top 50, but are welcome additions and we are always pleased when we find companies eligible to join the Top 50 Indies.
With growth through acquisition proving difficult, the Top 50 Indies have been trialling partnerships with a range of retailers and food-to-go brands to drive sales, but not all of them have worked out. MFG had been the first to trial a partnership with a major supermarket, opening Morrisons Daily stores on a handful of sites, but their partnership was terminated in March last year. And MRH invested in some trial sites with the Co-op, but this too has ended. EG Group was involved in another trial with a major supermarket when it converted a handful of its Spar stores to Sainsbury’s Locals, but in February the two companies announced it was being halted and the sites would return to the Spar format. Meanwhile, Rontec’s partnership with Morrisons has gone from strength to strength with the expansion from an initial 10 Morrisons Daily shops to 38 sites.
Another brand set for growth on Top 50 forecourts is Budgens. MFG has been expanding its relationship with Booker’s Budgens and Londis brands. And when MRH ended its Co-op deal, it announced a supply deal with Booker for 370 of its stores, and agreed that Budgens would become a retail partner. Several other Top 50 Indies are also adding Budgens sites.
Entrepreneurial retailers like the Top 50 Indies are always looking ahead for potential opportunities for their businesses, so the issue of electric charging is something many have been investigating this year. While some are waiting for more clarity or simply building the infrastructure into KDRBs and new sites, others have fully committed to installing chargers on their sites. At the head of the Top 50 list, MFG has made the biggest commitment, signing a partnership deal with ChargePoint Services with agreement for 200 charging points by the end of 2018. Meanwhile, MRH has joined the Ionity partnership with Europe’s biggest manufacturers aiming to develop a network of chargers across the Continent and UK.
At the other end of the Top 50 Westmorland has introduced Tesla Superchargers at its Tebay South site and has a programme to roll out and upgrade its electric charger installations. And in the Bubbling Under category Rusdene has installed its first chargers and is rolling them out across its network.
The willingness to invest by the Top 50 Indies demonstrates their confidence in the future of the sector. It will be interesting to see whether the focus MFG will have to devote to integrating MRH will open up opportunities for other Top 50 members over the year ahead.