It’s vicious out there, and it’s getting worse. Every retailer you speak to is seriously concerned about fuel volume and margins.
Some are quoting horrendous year-on-year fuel volume losses, and are spitting feathers about what they perceive as the unfair pricing practices of oil companies and supermarkets (see news extra, page 10). The retail network is buzzing with accusations of a two-tier pricing structure, with certain oil companies appearing to be heavily supporting their owned forecourts on fuel price, to the detriment of neighbouring dealer sites of the same brand which cannot compete.
Phil Richardson of Park Garage Group, said he was 42% down on one site following a running battle with a company-owned Total forecourt. Another of his sites was in competition with a Shell site which was running 5ppl below a BP site, and 3ppl below Phil. At that rate Phil was only making 2ppl. That’s if he sold any. "We’re not generating any volume because we’re way out on price," he raged. "I can sell at cost and still not compete." At one point he counted 14 cars on the Shell forecourt and none on his. He is seething and said the "pain is getting worse the speed of volume loss of late is scary".
If you have specific information of unfair pricing practices I suggest you send it to Brian Madderson at RMIP who is gathering evidence to poke under the noses of the powers that be.
Meanwhile supermarket promotions such as Morrisons offering a massive 6ppl off for a £40 purchase in-store, just turn the screw even more. It was interesting to hear what former Asda supermarket boss Andy Bond had to say about the view of the market from the other side (see feature, page 18). He is now part of the dealer fraternity having recently joined Top 50 indie Euro Garages. He believes that the shop side of forecourts is one of the most "under-potentialised" sectors in retail. As fuel sales wane, some hope for the future?