As usual during February, we’ve been busy collating all of the data from last year to arrive at the definitive picture of 2003 for the ‘typical’ fuel site. The result can be summed-up by saying that for those who survived, it was a very busy year indeed. Just how busy can be judged from our Annual Comparator table, which shows the 12-month values for 2003 and 2002.
In sales the year showed the now-expected increases in both fuel and shop performance. Our average fuel volume is now more than 4.75 million litres, but there was a cloud to this silver lining in that the annual average wetstock loss was the highest we’ve yet seen, at minus 0.46 per cent of volume sold. Given that over the previous seven years we had shown an average of minus 0.16 per cent this result was something of a shock – and the sites in the database are spread across the country and supplied by virtually every major fuel supplier, so whatever we’re seeing wasn’t just a ‘local’ effect. While many readers have their own (strong!) views on the subject, perhaps the results are not unconnected with the apparent cutbacks in routine site maintenance that a number of retailers have remarked upon over the past few years?
Shop performance continued to grow: our ‘average’ site managed to record sales of just under £600,000 during the year; not bad considering that the £400,000 level was only reached in 1999, and the £500,000 barrier in 2001; and remembering that we live in an era of low inflation. Seeing shop sales grow by 11 per cent in a year when retail prices generally only rose by 2.9 per cent can be said to be a ‘good result’; managing that while increasing gross margins (from 19.8 per cent to 20.1 per cent) might be described as ‘very good’– many other retail outlets are only maintaining sales growth at the expense of gross margins. Now consider this: much of the ‘sales growth’ that the big supermarket chains use as a sign of their virility is the result of continuous expansion of the number and size of their sites; when it comes to measuring ‘like-for-like’ sales (those from the same square metre of shop that was there a year earlier) those rarely show any sort of double-digit growth. It is a fact that the number of petrol retail sites in the database is not increasing, and although we don’t have figures immediately available to prove it, we’d also suggest that there has not been a dramatic increase in the size of the forecourt shops either. So perhaps a real increase in sales of over eight per cent in a year is actually ‘bloody marvellous’ – even by the standards of the supermarket chains?
Those who believe that the glass is only half-full will notice that as well as the wet-stock losses mentioned earlier, we’re also showing a large increase in ‘Cash Shorts’, from £440 to £700 in a year. Now it may be that we actually are living among a nation of thieves; or it may be that there is more than one explanation for the increase. Most fuel retailing sites (let’s exclude MSAs, since they don’t figure within the database anyway) have one, perhaps two points of sale. As we’ve already seen, shop sales are growing all the time, and petrol retailing is still predominantly a ‘cash’ business. Now add the difficulty of recruiting, training and keeping reliable staff. Result – even with patient customers queuing for their tenner’s worth of fuel and a sandwich, people will start to make mistakes, drive-outs don’t get noticed, everything ends up as an eventual ‘cash loss’.
While we’re on the subject of staff, yes, they get paid. Our average wage cost rose by almost eight per cent over the year; part of this is due to straightforward wage increases, and part is likely to be due to increased staff numbers – remember that many oil companies now expect retailers to run multiple sites almost as a matter of course. If you have two or three sites to run, you can’t be in all of them all of the time; inevitably that means that a variety of ‘assistant managers’ have become common on sites that used to depend largely on the site operator themselves being manager and cashier rolled into one. Hence more staff.
So as we’ve seen, there was some good news from 2003 and some not so good. If you have your own figures for each of our headings, compare them with ours and see just how typical you are. If you don’t have those figures for your own site, why not? They’re very basic but pretty fundamental to managing your shop and forecourt.