They’d had their eye on it for eight years, and finally last December the Cheema family acquired their first forecourt.
They bought a Texaco site just over a mile down the road from their award-winning Costcutter convenience store in Tile Hill, Coventry. It was sold to them by Top 50 Indie Petrocell, whose chairman Dermot Dowling has received high praise for his assistance in the site’s handover.
"Without Dermot we’d have been lost," says Paul Cheema, director of the family business known as Malcolm’s Store, set up by his parents Malcolm and Baljit Cheema when they opened their shop in Tile Hill nearly 30 years ago.
"On the day we took over December 17, 2013 Dermot and his business partner stayed with us until 5pm to make sure everything was in order. How many vendors would do that? He wouldn’t let us open the doors until all the credit card transactions had been cleared and were in our name, and then he tested them. We had a nightmare with the existing epos provider because we were moving onto the Costcutter system. Everything we weren’t sure about on the day and for a few days following Dermot was there to reassure us."
"And he is still acting as a mentor to us, giving guidance on buying fuel and pricing, because we are new to the petrol side of the business. For example, we’re about 5ppl adrift from the Tesco supermarket which is 1.5 miles away, but Dermot told us not to drop the fuel price. We’re working on a decent fuel margin of 5-6ppl, and he pointed out how many thousands of litres we would have to sell to make the margin back."
Paul is also extremely thankful to the assistance provided by other forecourt operators such as Jonathan James of James Graven & Son, Patrick Sewell of Sewell Retail and Michael O’Loughlin of Petrogas, who he met through his role on the independent retailer board of the Association of Convenience Stores. He is also quick to praise the knowledge and support of his store manager Katie Mythen, who was retained along with the rest of the staff when the business was sold.
"It has helped make the process of moving into the fuel business less scary," stresses Paul, who with brother Pinda, is having to come to terms with a whole new raft of responsibilities and considerations such as tank testing, fire officers and fuel deliveries. He is also clearly miffed by the discrepancies in business rates between forecourts and convenience stores welcome to the world of petrol retailing!
However there are no regrets, and clearly from day one the Cheemas have made an impressive impact on the 1400sq ft store, which has been converted from a Londis to a Malcolm’s Costcutter, the own brand the family developed jointly with the symbol operator, which features a striking black and lime green livery.
"We had hoped to fit out the shop for £30,000, but in the end we spent twice that much," explains Paul. "The fridges were expensive, but we’ve also invested in a new operating system from HTEC great tool, big cost! But we want to develop it further so that receipts can be emailed. We would also like integrated EFT because we’re currently printing off a tree in fact our biggest bugbear in fuel is that our supplier Valero won’t change to modern technology.
"We’re pleased we stayed with Texaco though we’re riding on the back of Petrocell’s weekly Platt’s deal, which has two and a half years to go. A lot of people come here because of the Texaco Star Rewards loyalty card, and we discovered that some of them leave their cards here behind the counter to ensure they’re always to hand!"
The store is impressive smart, bright, immaculately tidy and clean with its comprehensive convenience offer including an attractively displayed range of fresh meat, fruit and vegetables, extensive chilled and frozen offering, Jack’s Beans coffee dispenser, plus an off licence. An additional 1,200 SKUs have been packed onto the shelves under the new ownership.
As specialist convenience store operators the Cheemas were Convenience Retailers of the Year in 2013 the store is the focus of much tweaking by family as they try to maximise the layout and offering for their customers, who will now include time-pressed motorists looking to pick up items quickly.
"It’s a different pace selling fuel there’s not the time to chat as in a local c-store, but you still need to offer good customer service," says Pinda.
Parking is also proving to be something of a headache on this small 1.5mlpa forecourt, set on a prime neighbourhood location at the junction of two busy roads, where space is at a premium.
However, with sales on the rise, the Cheemas are extremely pleased with progress so far: "Shop sales were £14,000 per week, now they’re more than £22,000. Fuel sales are averaging 38,000 per week," says Paul. "I said all along that we weren’t buying the site for the fuel, we were buying it for the store. But we now realise that’s a separate business out there. You get your delivery once a week, keep the forecourt clean and well maintained. You haven’t got to do anything with it once the fuel has arrived just sell it."
Hence the family would be keen to buy another forecourt. "It creates a lot more opportunity," says Pinda. "Before I would have said you need newspapers to drive a convenience store, but now I think the convenience store of the future needs fuel to drive it."