The ’Park & Shop’ forecourt convenience brand, successfully developed and implemented by the Park Garage Group across more than 50 forecourts, is now available to operators through the UK as the company looks to further extend its involvement in petrol convenience retailing. Recognised by the industry as a ’Top 30’ grocer and listed at number three in the 2012 Forecourt Trader ’Top 50 Indies’, the £200m turnover family-run business is eager to share its success and buying-power discounts with other dealers.
"We were the first dealer group in the UK to introduce its own convenience brand and have always enjoyed sharing advice and expertise with other forecourt operators," enthuses chairman Balraj Tandon who, with brother and managing director Sunil, took over the running of the company from their father in 1984. "Now that the Park & Shop concept is proving its value on forecourts of all shapes and sizes, a roll-out beyond our own network seems a natural transition." First launched in 2006, Park & Shop has had a profound impact upon the Croydon-based forecourt’s operator its annual shops’ turnover now exceeding £40m. "The objective of Park & Shop is always to utilise the best available expertise from within the grocery trade and mould this to fit seamlessly within a traditional forecourt environment," explains Balraj. "Refining and refreshing the proposition is ongoing. We have a constant flow of special deals, encourage cross promotions between the shop, the forecourt and car wash and offer a growing range of high-margin own brand products. We expect any dealer working with us to add 25%-plus to turnover and 3% on margins."
Park & Shop is now available on two-tiers, based around the type of business, floor space and projected shop turnover. Both are set up to maximise income and profit with minimal outlay. "We are always looking at new opportunities but not at any cost," continues Sunil. "We will only introduce a new revenue stream if we can see a clear profit opportunity.
"Coffee is an example where too many people rushed in and caught a cold. It isn’t a licence to print money and won’t work on every site. There is a clear set of criteria to assess the potential success of such a venture, starting with a good throughput!" Balraj suggests a similar situation exists with the introduction of forecourt pharmacies: "There is a momentum gathering, it’s an interesting concept but should be viewed with caution. A site should be open at least 100 hours a week and the dealer must understand the legal framework and be very clear of the overheads involved. One of the first questions to ask is can you justify £50,000 in pharmacist wages?"
As its credentials as a grocer grow, so does the ease with which the Park Garage Group can negotiate directly with many of the UK’s leading confectionery, snack and drinks’ brands.
"Going directly to the manufacturers is proving very advantageous in the deals we strike, although maintaining a strong and dynamic working relationship with Palmer and Harvey remains essential to the operation," confirms Balraj. "Together we are able to bring our collective experiences and skills to very good effect." That collective approach is an important part of a business ethos that extends to both supplier and staff relationships. Nothing emphasises this more than the Park & Shop proprietary training model, introduced by the brothers alongside its convenience shopping brand which allows staff to develop their talents and expertise through the study of a dedicated NVQ.
"We are especially proud that 28 people across our network are currently studying for their NVQ," exclaims Sunil. "They have our full support and encouragement. It is part of our culture that we put great emphasis upon personal relationships and the nurturing of people," says Sunil, who recently turned 50. "We are interested in the wellbeing of our staff and after almost 30 years in the business, have worked alongside the parents, now the siblings and, just to show our age, a third generation is just starting to emerge!
"As fuel volumes decline and costs escalate, today’s petrol retailer has to maximise shop profitability and exercise even greater innovation to survive. We are particularly concerned about utility costs, Allstar and rateable values. Current rateable value rules are a major worry and we are appreciative of the work of the PRA to highlight the unfairness of the system. We would also wholeheartedly support a concerted PRA effort to force Allstar to reduce its costs.
"Something needs to be done, if not by Allstar, then by dealers to find an appropriate alternative, but the current costs are completely out of kilter. It is not realistic to expect a dealer to take a loss or break even on the fuel card purchase in the hope that the difference can be made up in the shop."
Another issue deeply concerning Park Garages is the cost of utilities. These are spiralling and becoming a major headache with no apparent end in sight, according to Sunil: "Keeping a tight lid on utilities is not easy in our business but it most definitely warrants time and resources to reduce them. For a group it is not an insignificant cost, for a singleton operator, it can be crippling."
Thankfully for Sunil, one area that is no longer cause for sleepless nights is the car wash: "Three years ago there was a real concern that the decline was terminal, exacerbated by the economic slowdown and hand car washing. Things then plateaued and thankfully we have been able to grow this area of our business slowly but surely. It will never be back at its heyday, but nevertheless it remains a strong income base, though demanding much greater attention with investment and equipment maintenance. We now provide our washes with the same levels of attention as in the shop and all other parts of the business. Car washes lend themselves well to cross promotions with fuel and shops."
Recently the company decided to rebrand 11 of its sites to Gulf while also handing back 37 Total Cog-Ops to Rontec: "We had a mutual understanding with Rontec as we have with almost all of the major fuel brands," explains Balraj. "For 10 years we enjoyed a very close working relationship with Total, although the brand’s demise in the UK demanded change. Moving to Gulf was the natural transition. We keep many of the assets of the previous arrangement including the same field personnel that continuity was most important. In addition we have, in recent months, been impressed by the actions of the GB Oils management team. The Gulf brand is going places, it represents a step in the future and we look forward to seeing the strategy put into action. We want our fuel suppliers to be active in the market place," he stresses. "That means targeting the consumer, establishing brand awareness and product differentiation. Where Gulf is already leading by example is in its interaction with its dealers. So many of the major brands have scaled back field staff and most of the interaction is done by email or phone or visits to HQ and not across our network of sites. That is not the way to understand the business and develop empathy with dealers.
"Running a forecourt is a roller coaster ride and you gain great confidence in knowing that your supplier understands the micro and macro issues. We feel enthused by the recent moves we have made they bode well for the future. You just can’t stand still in this business, you have to be always looking for the next opportunity. That’s why it demands a team effort which was what drove the business forward from its humble beginnings in Canning Town back in 1975 and remains at the very heart of our operation today."