This time last year Pump Hill Service Station in Clacton, Essex, was in danger of becoming yet another statistic in the growing toll of forecourts that have gone out of business in recent years.
A Tesco superstore with a high-volume forecourt had recently opened just four miles up the road and had taken a heavy toll on the business. Two other service stations in the area were teetering on the brink and have since closed.
Fuel sales on Pump Hill’s sizeable forecourt had slumped from 35,000 litres a week to just 12,000. Shop sales of around £4,000 a week - from a 450sq ft store - were disappearing at the same rate, sometimes languishing around the £1,200 mark.
"We were in the mindset of giving up," explains Patrick Pandya, who has owned Pump Hill Service Station for 10 years. "We didn’t know what to do. When you have a business that you love, and believe in its long-term potential, it is a very difficult situation to face."
Patrick and his wife Nirmala (their son Jigar also helps with the business) spoke to their Gulf area manager Steve White, and he put them in touch with Tony Bailey, director of Instore Profits, a specialist shop consultancy with more than 20 years experience in solving problems in shop retailing - including forecourts.
Instore Profits is Gulf’s recommended route for all things shop, a relationship which, according to Steve White, has flourished with the improving shop performances of Gulf dealers across the UK.
However the Pandyas were initially hesitant about making any commitments in terms of developing their store, because they were concerned about money.
"Gulf had identified the shop as a potential revenue stream, but despite our strong relationship with the Gulf personnel, we had been reluctant to get them involved thinking that it would involve major investment," says Pandya.
"We eventually took ’the plunge’ and are ecstatic with the results."
Realising their hesitancy, one of the first things Tony Bailey did was to reassure the Pandyas that improvements could be made without heavy investment.
"When Gulf called us, it was evident that we needed to make changes and make them very quickly," recalls Bailey, who has specialised in retail all his career, including a stint as general manager of Cook Petroleum for 10 years running a network of sites.
"Patrick’s business is typical of many smaller sites that are not maximising shop potential and are reluctant to make changes, either because they feel that it will require a significant investment or they cannot see the benefits of change.
"We needed to give Patrick the confidence to move on. He’s like a lot of retailers I’ve come into contact with, they agree with what you’re saying - they’ve thought the same things themselves and know something needs to be done - but it’s not until someone from outside the business comes along that they have the self assurance to go ahead with the necessary changes.
"Pump Hill Service Station is in an area of high footfall and clearly had the potential to improve from its 2006 position - a weekly shop turnover of just £1,500. It was a process of identifying first of all where the site was at and where it wanted to be. The first thing I did was a survey of the area, to see what the competition was like, and how Pump Hill could maximise its strengths.
"As a result of that we’ve extended the range throughout - grocery, drinks and so on - adding more than 200 lines. We got an alcohol licence so that we were able to introduce wines and spirits to the site. And we put a merchandising format into each department and left Patrick with the top sellers to order, which we came back and merchandised."
Restoring the site’s business to a successful level was a process undertaken during about four or five visits over 12 months - with Instore Profits setting up the layout, leaving instructions, then coming back later to see how things were going. It was an evolution rather than a revolution.
The only significant investment Instore demanded of Patrick was in time, and a more disciplined approach to shop management. Instore created a new layout and a fresh shop image, introduced planograms, stock control procedures and new lines.
"We introduced pet food and it has become one of our strongest lines with a 60% margin," says Patrick.
"Our shop looks more inviting, stock moves more quickly improving cash flow and our turnover is now exceeding £7,000 a week, and fuel volumes are back to 35,000 litres."
From a target of £5,000 that at one point seemed pie in the sky, Patrick is now so enthused with the success he has enjoyed that his next target is to get the shop to £10,000 a week. And his occasional visits to the local cash and carry have now become a daily event. He has even introduced leaflets giving information about all special offers, many of which match or are better than the supermarket, which has helped encourage trade.
"Patrick didn’t have any offers before," says Bailey. "But we introduced an offer into every department. The increase in sales has also been about instilling discipline - taking things out of boxes, keeping the shelves filled and so on. It was a bit of a fight with Patrick to begin with - making him understand the importance of these things. But Patrick has become a model retailer, following our instructions to the letter."
A key aspect of the changes was the shop front, which now advertises the special offers in-store, and gives a clear indication to customers of what products and services are available. "Because people are so familiar with their own site, they often don’t notice the obvious things that are missing - they know what’s in their store, but they’re not communicating it," explains Bailey.
The success at Pump Hill shows that retailers don’t need to have a full-scale rebuild in order to give their business a boost. Much can be achieved in any store by sticking to the basics, stresses Bailey. These include cleanliness throughout the shop and adherence to planograms to help maximise trade. "And build the business slowly," says Bailey. "Develop the store as you go along - it doesn’t happen overnight. You need to trial things and if they don’t work try something else."
Meanwhile Patrick is more than happy with the results so far: "We follow the plans and our instruction booklet like a bible and our improved understanding of sales and trends has made us more confident in trying new products and lines," he says.
"For minimal outlay we are now profitable, our enthusiasm is back and the future looks healthy."