Sainsbury’s has announced another round of fuel price cuts, which if previous such announcements are anything to go by, will trigger a chain reaction among rival supermarkets, with independent retailers caught in between.
Sainsbury’s said that from tomorrow (Tuesday 14 October), it will be cutting the price of diesel by up to 2ppl and unleaded petrol by 1ppl across its 295 forecourts. Avishai Moor, Sainsbury’s head of fuel, said: “We’re dropping the price of diesel by up to 2ppl and unleaded petrol by 1ppl at all our petrol stations. With winter fast approaching, we expect this offer will help families to balance their budgets over what can be an expensive time of year.”
Peter Cattell, fuel director for Tesco said: “From tomorrow, we’ll be cutting the price of petrol and diesel by at least 1ppl at all of our petrol filling stations. As Britain’s biggest fuel retailer this means more motorists can make real savings. We also offer Clubcard points and savings through Clubcard Fuel Save, which saves our customers up to 20ppl.”
Wholesale prices have been on their way down, and the supermarkets waste no time in promoting their fuel prices, reinforcing the perception to customers that they are always the cheapest.
However, real or not, the fierce competition from supermarkets has taken its toll on the indpendent sector over the years, with recent data from Experian Catalist showing that 886 sites had closed between 2008 and 2013.
PRA director Brian Madderson said he was particularly concerned with the 322 sites in rural locations which have closed, creating ’fuel deserts’ in those communities which rely on the service the most.
“Many of these rural sites have seen both fuel and shop sales dwindle as the more mobile residents are drawn to a supermarket for a weekly major shop where they also fill with fuel," he said. "These ’fuel deserts’ create problems for all rural residents but particularly for the elderly, those in ill-health and those without cars who rely very heavily on the services provided by local facilities."
However, the fuel-price wars are not necessarily good news for the supermarkets - the falling price of fuel helped to depress sales figures released earlier this year by Sainsbury’s.
In a trading statement for the second quarter of its financial year, covering the 16 weeks to September 27, it revealed that total retail sales for the second quarter were down 0.8% excluding fuel, when compared with the same period last year, but were down 2.3% when fuel was included.