ANOTHER MARCH and another forecourt show. Well, almost. The days of a standalone forecourt show packed with exhibitors of forecourt equipment have, of course, long since gone, consigned to the memory of when there were 20,000 forecourts. So now we have the combination of forecourts and convenience stores, and entirely appropriate that is too.
AS I WAS SAYING LAST MONTH, I believe the days of profit growth just because we exist are well and truly over. So for those who have the resources, and the will power, the main source of an enlarged bottom line has to be increased investment. And as I see it, unless you have a lot of land, a very understanding bank manager and an awful lot of bottle, that means choosing between either a bigger shop or a beefed-up car valeting facility.
SO, WHICH SHOULD IT BE? Convenience store or equipment? Not an easy one to decide. Obviously, as with all retailing, the first thing to do is evaluate your location although sometimes the right decision still isn’t that obvious. If you’re in the middle of a run-down council estate the choice is convenience store and if you’re on a major trunk road with no chimney pots the choice is valeting (or a diner?). But what about town centre sites or those located in well-heeled suburbia?
SO THE NEXT STOP is assessing the competition in your area. What is there, how good are they and can you compete on a level playing field? Up to now we’ve had a pretty clear run at the convenience market. We were the ones with the long hours, the absence of double yellow lines and, to some extent, the more professional approach to finance and control. The advent of Tesco Express et al has changed all that. It doesn’t mean we can’t compete, it just means we’ve got to be very, very good in order to stand a chance - and there is definitely no level playing field!
ON THE VALETING SIDE there is no doubt the outlook is brighter vis à vis competition from the major players. Thankfully, car washing has not been seen as a priority by the hypers and, even where they have installed washes, their operation appears to repeat all the mistakes the majors made in their company-owned network. I recently went to a well-known hyper in order to look at a rollover they had installed some three months previously. Not only was the quality of wash crap (maybe they were using left over chemicals from their previous machine that weren’t of the right specification?), but the drying was rubbish (definitely due to a problem with the magic eyes that prevented one of the contour driers from operating) and the advertising material was from the old wash and the programmes that it used to offer. In other words, the management at the site couldn’t be bothered.
OF COURSE THE OTHER competition for valeting is from hand washes, either site-based or at car parks, but on this front I believe you have to take a long-term view of things. The great advantage of equipment is that you don’t have to pay it the minimum wage and, sooner or later, that proves to be the demise of most hand washes. As I said, the choice isn’t easy. But then if our business was easy everybody would be doing it.
ANY TIME NOW there should be a night of the long knives at BP. It’s ironic that the company, under Brasser, who first identified the need to drive their cost base down so that they could make profit at 3ppl Platt’s to pump, should now be so heavily over-manned. While no one can denigrate BP’s achievement in going from a long-way third place to clear market leader, this plethora of staff is surely a testament to the folly of believing they were experts in retailing combined with complacency borne from being the market leader. And that’s without the desire to create a market force in coffee retailing. Most of my BP dealer colleagues are fervently hoping that the expected cabinet reshuffle will lead to the demise of PM’s question time.