The forecourt sector has shown it can adapt and is likely to come out of the crisis in better shape than many others, according to Arthur Renshaw, UK & Ireland manager for Experian Catalist, writing in the latest Fuel Market Review in the June digital issue of Forecourt Trader.
Prior to the coronavirus hitting the UK, the previous 12 months for the retail forecourt sector had been pretty good - volumes were generally holding up and fuel margins had been great, he reported.
“The retail forecourt sector was looking in good shape to move forward in 2020,” explained Renshaw. “In conjunction with convenience shopping, retail forecourts had been the best- performing sector from a property valuation perspective and with failures few and far between. The sector is still attractive to the private equity market and there is money available to buy and develop sites.
“The industry response to the pandemic once forecourts were designated as ‘essential services’ has seen many forecourts re-opening very quickly with distance measures and safety procedures in place,” he said. “Adapting their forecourt shops to service the local communities with delivery options (Just Eat/Uber Eats etc) has appeared to work well and many sites are likely to get some positive hangover effects once the situation starts to return to ‘normal’.”
In the previous year before the pandemic struck, there had been 38 new-to-industry sites (NTIs) come into the market which, if nothing else, demonstrates a high level of confidence in the retail forecourt sector, according to Renshaw: “Twenty seven of these sites were in the dealer sector – more than in any previous year and compared to 17 in the previous year. Overall, across all channels, we have seen a net reduction of 15 sites down to a new total of 8,385 sites in 2020.”
He said government reports from the Department for Business, Energy & Industrial Strategy (BEIS) and HMRC indicate that road fuel volumes used in the 2019 calendar year was less than 1% down on the previous year - 2018 - at around 46.5bn litres.
“The government has stopped reporting road fuel volumes by sector and the 46.5bn includes HGV diesel which we estimate at about 10bn litres, leaving motor fuel volume through the retail network of 8,385 forecourts at 36.5bn litres for 2019,” explained Renshaw.
The report also reveals that 88% of sites have a forecourt shop of some form, with sales totalling £4.5bn a year.
“There are now 2,530 sites with c-stores (up by 100 sites from 2018), and they retail 60.2% of the forecourt shop sales. The average c-store turns over £22,000 a week from a 141sq m store,” said Renshaw.
The comprehensive report includes an in-depth review of the activities of the fuel retailing sector in the past year, including comments from oil company bosses; listings of fuel suppliers with a breakdown of their networks; plus graphs and stats showing the structure, size, store activity and market share across the sector, covering dealers, oil companies and supermarkets.