Top 50 indie Peter Brough has called for independent retailers to join together to form their own fuel brand and cut out the expensive middleman – the oil companies.
In a presentation to a packed audience at the ACS Forecourt Seminar in Leicester last week, Peter – managing director of Cheshire-based Manor Service Stations, which runs 12 sites – said he believed the industry was going through its biggest fundamental change since the 1960s.
He said fuel volumes were falling on traditional sites because retailers were unable to compete with the supermarkets.
“Why are we in such a big mess in terms of volume? Fundamentally it is because we’re being outsold on price.
The reason is that supermarkets sell an awful lot of fuel. If they sell an awful lot of fuel, they can get it at a good price.
“But hang on a minute, there are 5,400 independent sites. That’s a lot of fuel. Oil companies – once they’ve sold their refineries – are just middlemen. The big difference between the prices paid by the supermarkets and the price we’re paying is the brand. We’re paying an enormous amount to a middleman for a brand.”
Peter said independents should seize the opportunity to set up their own brand together and cut out the middleman.
“Even if just 10% of independent garages – 540 – were to join, and commit ourselves to, say £10,000 a site – you’re talking about raising £5.5m, enough to create a brand. Three million pounds spent on TV is going to create a brand. We all know it – we’ve seen it happen with insurance companies. Use a meerkat and you’ve got a brand!
“We’d be big buyers and therefore even if we’re not getting the same price as Tesco, we should be getting much much closer. If we don’t do something the UK will end up like France – very few service stations and most of the fuel sold by supermarkets.”