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

Jos Richardson & Son

Joseph Richardson had been happily living in the city and working for a big corporate company as a graduate, but the potential expansion of his dad Tim's forecourt business proved enough of a draw to take him back to his Yorkshire roots.

From 1978 until the mid-noughties, independent retailer Jos Richardson & Sons operated one petrol station Glews Garages in Goole along with Vauxhall and Peugeot car dealerships. But when Tim got wind of a site in Primrose Valley on the East coast coming onto the market, he used the opening of a new forecourt as a way of tempting his son to join the family business.

"Dad used that as a bit of bait for me to come back," recalls Joseph. "It was something away from the business in Goole where I could cut my teeth, make some mistakes and not get under his feet. I knew that I was never cut out for the big corporate world, long-term. Nothing happens quickly enough, decisions are too slow, and there's too much politics and work avoidance.

"I'd seen the family business when I was growing up so it was natural to have an inkling for that anyway. That made it easier to step away from the corporate world. But this is a lot of hard work. I've made plenty of mistakes, like not ordering the fuel correctly and running out. I can laugh at that now. I couldn't make decisions quickly enough because I didn't have the experience, but as you do the job your confidence goes up."

In January 2005, the company completed the purchase of Total-branded Primrose Valley Service Station and, at the end of 2006, took on Esso-branded Filey Service Station, five miles away. Having joined the business in 2004, Joseph knew that convenience was the way forward for forecourt retailing, and he set about redeveloping the shop in Goole under the Spar fascia. Not only did shop sales go up to £22,000 a week in the first 12 months (they're now at £30,000), but the development added two million litres to the site's volume, making it a 14.5mlpa site within one year.

After getting a taste for convenience retailing, he added Spar stores to Primrose Valley and Filey, and saw shop sales head in the same direction as Goole's. Come 2009, Joseph switched the two newest sites to Jet, while keeping Glews as Shell.

Last August the group purchased BP/Costcutter-branded York Road Garage in Escrick, and in November 2011 bought Longs Corner Service Station in Howden. It knocked down and rebuilt the latter, opening on March 30 with BP fuel and a Spar store. "We had been in negotiations with the owners of Howden since the start of 2011," says Joseph. "The site had been on the market for over a year before anyone approached them so we got a good deal."

The old 1930s petrol station had a kiosk for a convenience store and an adjacent workshop, but on a big enough plot to redevelop into a modern forecourt with 2,400sq ft shop. "We were surprised that no one had taken a look at it before us," says Joseph. "We weren't interested for a while but then we had second thoughts. We talked to a few people about volume projections and they ranged from 2.8mlpa to 5mlpa so we had to take a bit of a punt on where we saw it going. Initial figures are good. You've got to give it a full 12 months but we hope it does 4-5mlpa."

Fuel volumes across the Jos Richardson network have been relatively stable, with fuel sales at Goole increasing thanks to the Euro Shell card. "There's no doubt we've lost a few retail sales at Goole, though," says Joseph. "Primrose Valley volumes are up year-on-year because Tesco built a supermarket in the middle of Filey but no petrol station. People were going to Morrisons in Scarborough or Bridlington before but now they can stay more local to get their weekly shop.

"We're quite competitive on price because we're with Jet and only 1p or 2p above Morrisons. People wouldn't go out of their way to get fuel there. Volumes at York Road are down slightly because we have had to put the price up making us a lot dearer compared to the supermarkets in York. But we're not severely affected like city centre sites are."

Jos Richardson has more development plans for the network. First will be a new Spar store at York Road. "We're doing £24,000 a week out of a 1,000sq ft Costcutter so the potential there is tremendous," says Joseph. "We need to do some forecourt improvements, including new pumps in the next 12 months. We also want to develop Goole. The store there could be bigger. It's now 2,000sq ft but I'd like something nearer 3,000sq ft."

Adding more forecourts is also on the agenda. "We're always looking for more sites but we're quite proud of the fact that we do more than 30mlpa from five sites. I'd rather have five sites totalling 30mlpa than 10 doing that amount. I'm not overly bothered about taking sites for sites' sake. We do like to look at each one thoroughly in terms of the financials. Like any business, you have to look at its retail value if you want to get out.

"We've had expressions of interest in all of our forecourts over the past two years so we know we've got sites that wouldn't be difficult to sell if needs be. We've got no plans to sell though if anything we want to add more sites. Our aim is to have more Spar stores in forecourts."

But the group is particular about the type of site it wants to operate. Joseph isn't interested in sites with less than 4mlpa and doesn't want to get into locations where supermarkets are driving the price down. He's happy to operate out of market towns and rural locations because supermarkets make it almost impossible to make anything from fuel in some areas, he says.

While business is booming, Joseph is not without some concerns. "It's very worrying how few forecourts are left and it's very worrying how unchecked the supermarkets are in terms of their ever-increasing dominance. They have 50% of the volume from about 20% of the sites that is worrying and that's why we believe you've got to offer a complete service. You need a good valeting offer, a good convenience store offer, good food to go, and hopefully be trading in areas that aren't too beaten down on price. Even in hard times you can't accept poor performance. You've got to try new things and not rest on your laurels.

"Fuel prices could go higher to 160ppl," he adds. "Customers still don't understand how the market works. Blaming retailers for rising prices has stopped but people don't understand why supermarkets can charge less than us, or why sites of the same brand a few miles apart can charge different prices. We have difficulty explaining why we're 3/4/5ppl dearer than the next site. Predatory pricing and supermarket promotions shouldn't be allowed it's loss leading in one industry and off-setting with another sector."

Joseph says the next five years will be an interesting period for the petrol retailing trade. "I'm a bit worried about the potential lack of suppliers to the market," he says. "Total is still up in the air, Shell is quite strict with its minimum volumes for dealers, and Esso isn't as strong in the North. Jet is very strong here and we've got a good relationship with them but the brand isn't nationwide. There are going to be a lack of options."

The group is not ruling out the possibility of one day arranging its own fuel deliveries, but losing out on fuel card business by moving away from a major brand is not an option, says Joseph. "I wouldn't feel confident about putting our own name on the pole sign because of the fuel card business, but if someone answers the question of how we can replace that volume and have our own brand I'd be interested. I think we will see more retailers collecting their own product from the refinery, but fuel cards are the last piece of the jigsaw for me."

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Weekly retail fuel prices: 4 November 2019
RegionDieselLPGSuper ULUL
East130.9367.90138.13126.75
East Midlands130.73139.73126.64
London130.73139.60127.04
North East129.5562.90137.10125.31
North West129.9963.90138.40126.48
Northern Ireland128.05133.57124.33
Scotland130.6059.30137.24126.23
South East131.4566.90139.66127.42
South West130.7674.90137.94126.68
Wales129.84136.06125.42
West Midlands130.4059.90137.63126.57
Yorkshire & Humber130.02139.47126.29

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