Even in a less-than-perfect world, retailers and suppliers are meant to be on the same side. But when things go badly wrong, how can you salvage what’s left?
Ajay Gokani, who runs Empire Garages in Enfield, Middlesex bought a security system from Peter Forde at CCTV-Systems Specialists last November.
"It was recommended by a friend and custom-made to my requirements and I was very impressed," says Ajay, "but it had a lot of teething troubles which needed fixing. I paid several thousand for it but withheld £1,000, which I said I would pay once the recording system was working."
The problem arose when Peter Forde came to fix the system in February but ran out of time and tempers flared. He left the premises and took the recording system with him. "I know he has a lot of business at the moment," says Ajay, "but it has left me and my staff vulnerable. One of my staff was assaulted on Friday night and I don’t have the camera evidence."
I spoke to Peter Forde but he maintains that Ajay was very abusive to him and that he will not be going back unless he gets a written apology. "I’ve been in business for decades and no-one has ever withheld any money," he added.
I know that in the building trade it is recommended by the industry’s own code of practice, that the customer pays in tranches with the final balance settled on completion of the job to the customer’s satisfaction, so it does not seem unreasonable to me.
The fact remains that Ajay - the customer in this case - has paid £7,000 for a monitor with no recording attached and, as everyone knows, forecourts get incidents all the time. As the goods are not fit for the purpose then Ajay should be able to enlist the help of trading standards. His solicitor said he would have been better off paying by credit card and not clearing the amount until he was satisfied (that way, the credit card company still owns the equipment). Trouble is that ploy now falls into the ’with-the-benefit-of-hindsight’ category.
== Fuelling the price war ==
The price of fuel is an emotive subject. I know that advertising can pay off and you have that big display space up your pole but it can also backfire when the local supermarket starts handing out vouchers offering a few pence per litre off for spending a few quid more.
I had an interesting conversation with Doug Wardle, chairman of the Wardle Group of forecourts, who observes that, while customers may know the price of sugar and one or two other known-value items, they are actually being duped by the supermarkets into thinking they are getting a better deal on everything.
"Members of the public are often on TV or in the press bemoaning the fact that your petrol is 1p or 2p dearer than the forecourt down the road or your sugar is 3p per bag more expensive than the large supermarket. The average buyer purchases 20 litres of fuel a week and by driving further for a better deal saves 40p or saves 6p on two bags of sugar, but he more than pays for it with other items."
He believes that the supermarkets are trying to dictate the price of fuel by forcing it down on the pumps. "If a customer spends £100 in the supermarket and, let’s assume, gets 5p a litre off the fuel and then buys £50-worth of petrol, then they’ve had £2.90 knocked off their bill. The supermarket makes a gross profit of 25%, because they are able to drive down suppliers’ prices."
He adds that the enticement to spend more in the supermarket in order to get the apparent deal is clever because it always excludes low-margin lines like utilities, tobacco and lottery.
== Boom or bust? ==
I keep reading (in this magazine and elsewhere) that forecourt property values are not only on the up but are outperforming most other sectors. No doubt there are some of you who would say pull the other one but equally others will be wishing to cash in on the trend.
A retailer looking to take on a new lease rang me recently to see just what ought to be contained in it to safeguard his future. A lease is legal and it needs to be drawn up by a professional so I rang Mark Bradshaw at Garage Watch to see if the group recommended anyone. Mark suggested David Hunter at Adlers.
He says: "The acquisition of a petrol filling station is a complex matter and there are many factors which need to be considered. While location is of prime importance, the local catchment and competitors need to be considered and their effect on the long-term business considered.
"When this is taken in the light of the previous trading history, the basis of the fuels supply agreement either in place or available on the open market and consideration of the age and condition of the property and other pertinent factors, a full assessment can be made and the rent or freehold value calculated."
I can see it’s something that can’t be done over the phone.