SO HOW DID YOUR December end up then? While the High Street as a whole had a late revival, discussions with my friends seem to point to forecourts having a pretty thin time of it all. Volumes and margins were OK, and once upon a time that would have been enough to make us happy bunnies. But that was in the days when your shop sales were the froth at the top of the glass. Now it’s the other way round and from all accounts most people’s shop sales were significantly down. The cause is not hard to find. It’s those bloody hypers again. Remember when we used to sell loads of confectionery selection packs, boxed chocolates, after dinner mints etc? Then there were all those extra soft drinks and crisps. More recently, those of us who had invested in alcohol had the added bonus of those last-minute cans and bottles of wine. When the likes of Asda, Tesco et al sell at prices at or below our cost levels, it becomes impossible to compete. Who’s going to buy a box of Milk Tray for nearly £6 when you can get a 1.2kg tin of Celebrations for £5? And with larger scale purchases, like two cases of beer for £16, the scope for last-minute top-ups diminishes – our customers are awash with the stuff.
MEANWHILE, FOR A PETROL RETAILER, January must be the month that provides the ultimate test of whether you truly believe in the power of positive thinking. What an absolutely miserable 31 days it is. Straight after the Christmas and New Year celebrations, all our punters are either skint or splashing what dosh they do have at the January sales. Fuel volumes are always crap – they seem to take forever before some level of normality is reached. To make matters worse, you nearly always enter the month with your tanks overfull as a result of the perennial fear that you will run out in the period leading up to Christmas. And, because volumes are so thin, you can just guarantee that the hypers will squeeze margins in a desperate attempt to grab every drop they can. About the only saving grace for this period of purgatory is that, sometimes, the weather comes to our aid on the valeting side. So you won’t be surprised when I tell you that I welcome February with open arms.
SO IS IT ALL DOOM and gloom then? Well, to some extent I think it is. Unless you are prepared to invest heavily in extra facilities or are lucky enough to have a nearby site close down, then I reckon the average site has hit its peak and is now on the slope of a gradual decline. The days of experiencing 10% average growth in our shops without doing much are over. The overall market for convenience shopping will keep on growing, it’s just that we won’t benefit from that growth because of… those bloody hypers again! Ignoring the question of Sunday trading hours, most hypers are already open 24/7 while their relentless drive into the convenience market means that if there isn’t a Tesco Express near you already, there will be one soon. That doesn’t mean we should all call it a day. What it means is that we’re going to have to operate even smarter just to hang on to what we’ve got.
THE DISADVANTAGE THAT most of us suffer from – not being part of a national chain – is also the advantage that most of us have. We’re local and can be flexible. Friendliness of customer service, constant availability of key lines and satisfying the quirks of local demand are the weapons we should utilise to the full. But above all else is speed of service. The convenience market is meant to be… convenient. It is for cash-rich, time-poor customers. Minimising the length of time it takes the customer to buy those top-up purchases is the key to our survival.
KEITH MOWBRAY WROTE and asked me if Euroconnex was really that bad. All I can say is that if you don’t mind spending 10 minutes to get a manual authorisation or still being overcharged eight months after a scheme has been set up then they’re the company for you. Phone the PRA, Keith.