As the mobile phone lying on the desk suddenly erupts into the theme from the film ’Mission Impossible’, its owner - Ron Haacke, who runs Petrol Express Ltd - chuckles: ’Mission impossible - that’s the game I’m in."
An amiable fellow, Ron is not usually one for outbursts, but in last month’s issue of Forecourt Trader he certainly made his feelings known about Shell’s pricing strategy, branding it "crazy".
"The challenge in this market is making money where people are giving product away," he asserts. "Shell and a couple of the hypermarkets are spoiling the party."
His wrath, however, is particularly directed at Shell, because he doesn’t consider the hypermarkets to be direct competition: "Hypermarkets target the type of people who’re prepared to go off the road, and manoeuvre around the car park to get to the fuel. They expect the fuel to be cheaper.
"But there’s no need for that on the high street. No need whatsoever."
The strategy at Petrol Express is very clear: "Our position is that we will try to be competitive, but we will not open a forecourt at a loss. With proper promotions, a decent image and good facilities, we can still run a good profitable business.
"Tesco Express is competition, but we don’t really mind that - its forecourts get so congested! Tesco itself is a wonderful image and it draws people in wherever they see the name. Tesco is the best. But it’s also much more realistic on fuel prices."
But Ron has seen it all before. He knows how cyclical the industry is.
"Shell will change," he predicts. "There will be a new regime eventually. Look at Esso. Ten years ago it had Pricewatch. There’s new management now and a different structure - one that suddenly wants to be friendly with dealers."
There’s also something ’cyclical’ about Ron’s own career. In 1975 he was the first-ever employee of Thames Rico Service Stations - which is now a wholly-owned subsidiary of Petrol Express. "I was there for 10 years," explains Ron. "I started as office boy and left as managing director. I moved on in 1985 and got involved in the property business, then following the property crash in the late ’80s I joined Proteus, where I was md for several years, working with Victor Gauntlett. I had a lot of fun there because Victor was such a huge personality - very entertaining to work for.
"It was very sad when Proteus was sold to Texaco in 1999. But there wasn’t much choice. We had to get out of the market. A lot of our business was supplying dealers - the smaller ones in particular - and they were closing, squeezed out by Pricewatch."
Due to exclusivity clauses Ron then spent two years pursuing other business interests, unable to work in the petrol-retailing sector. But at the start of 2002, Dennis Woods, founder of British Benzol Plc and chief executive of Petrol Express, approached him to join the company.
"I was delighted to get the invitation to come back into the industry and work for Petrol Express," he enthuses. "I knew some people here, and the offer came at the right time."
Petrol Express is a subsidiary of Global Natural Energy Plc (formerly known as Middlesex Holdings), which acquired an initial minority stake in Petrol Express in November 2001. About the same time, the founder of Petrol Express, Rikki Hunt, left to set up the now-defunct Fuelforce.
"There was a big job to do when I came here," says Ron. "We totally restructured the organisation. We wanted people out in the field. At that time we had 50 sites - the Thames Rico sites, a package of sites bought from Shell, and from Alan Pond’s Oakstead group. We also had about 300 staff.
"We spent the first year getting people in the right places. My attitude to running a marketing company is that people have to be in the field, not in the office. So I promoted people who had been with the company a long time, moving them to field positions. One had been employed as a cashier when I first joined the company in 1975 and he is now the operations manager!
"We had a wealth of experience and commitment from within the company, and everyone out there was delighted to see people they knew being given a position of authority. I’m pleased to say I brought no one in from outside. We have four area managers, a shops manager, a security manager and an operations manager."
Ron believes the great strength of Petrol Express is that it is the biggest company running direct operations. He therefore puts great emphasis on marketing and communications.
"One of the benefits of having all field management being promoted from service stations is that they can talk to cashiers and managers, on a like-for-like basis. They understand the business - the problems, the pressures.
"Motivating the staff is about communication as much as anything. The industry can’t pay top rates, so we have to make our service stations a nicer place to work. The only way we can do that is to encourage people to communicate, and to listen to them.
"I also want people to give me another perspective - to knock me out of my habits. We don’t want to do something just because we’ve done it for the past 10 years. With 500 staff, there are a lot of different opinions. We do have a disciplined structure, but we always encourage people to speak up."
Following his arrival, Ron also spent a lot of time reviewing the network. "We’ve been getting rid of the smaller sites that we couldn’t see a future in, and investing in bigger and better sites," he explains. "They were sold mostly for alternate use, and we used that money to invest in five ex-Save sites. We also bought the Copes Group in the Midlands (five sites), and 15 sites from Texaco. Over the past five years our portfolio has grown to 63 operational sites. The network is located in South Wales, London, the South coast, the Midlands and towards the North West. But we’re always looking for opportunities to expand."
A programme of investment in the Petrol Express network has been set in motion. It can vary from a simple redevelopment of the shop to something much more radical - anything from £5,000 to £300,000.
"What we’re aiming to do is to get 50% of income through non-fuel," explains Ron. "To do that, each site has got to have a lot of potential in terms of car washing and a good convenience store. The Petrol Express directors and Plc owners are well aware of this and are very supportive."
To that end the company is actively looking for a major food supplier to help develop the shop offer, and has recently signed a deal with Costcutter for the 15 sites bought from Texaco.
"We’ve been looking for a sharp, upmarket image that the general public will have confidence in," stresses Ron. "We have a number of shops that currently average around 800sq ft and plan to develop them to 2-3,000 sq ft. A full convenience offer is absolutely the way forward.
"We’ve also developed two café formats which we are currently trialling. We have one, called Café Express, on a site near Heathrow targeting chauffeurs. We are encouraging them to visit the site by installing screens displaying teletext so they can keep tabs on flight times. It has some seating, good quality coffee and beverages, and Cuisine de France providing freshly baked bread and quality food. The other trial is on a site in the Midlands, called Express Grill. It’s aimed at HGV drivers, with the emphasis on things like bacon butties and food-to-go."
On the fuel side Petrol Express is predominantly supplied by Texaco, of which Ron can’t speak highly enough.
"We’re very happy with the relationship. The Texaco aftersales is superb, and the people are great. The company offers things like training, mystery motorist, and the WE.O.U promotion. The nice thing is there is always someone in management at the end of the phone."
On the future of petrol retailing Ron has firm views: "It is a solid business, but you have to have your own strategy and follow it. You cannot follow the changing strategies of the oil companies - you can’t compete with that. You’ve got to be strong enough to make money despite everything that is going on around you. There will be more site closures in the industry. Some retailers are not able to compete, and some will get a better return by selling their sites for alternative use. But for anyone owning a number of service stations, it’s got to be good news - the less sites there are, the greater the value of the survivors.
"Investment is key. You can’t stand still. You’ve got to be open-minded and flexible. That’s why I love the business - there are always problems, but they are not always the same. The market next year won’t be the same as this year. It keeps us all on our toes!"