How important is price? What a question to ask retailers. Owen McKay, who runs Smithy Garage at Warrington in Cheshire, thinks that image is important but that it is inextricably linked to price.
His business is quite comprehensive, offering car sales, MOT, bodyworks and a Londis shop. “People in this village judge all my prices by the price of petrol. I don’t make any profit on petrol – I don’t expect profit on petrol these days.”
About a year ago he decided he needed a smarter image too so he applied to Gulf for a makeover package. The reps promised competitive prices on petrol. One year on Owen is still a big fan of the brand and the image it projects. It does look good, in fact his forecourt, the first to obtain an off licence in his neck of the woods, features in the current Gulf recruitment advertisement.
But he has not been happy with the prices. “When they first supplied, everything was great,” says Owen, “but the second load was 2p higher. I had to negotiate with the area manager and then I got a competitive price again. But this became a pattern. They were always 2p a litre above everyone else so in the end I only bought three loads from them. I shopped around and found I could get it cheaper elsewhere.”
Most recently he says he was paying 71ppl for diesel from Carlton Fuels whereas Gulf wanted 72.9p for it. He trades just a quarter of a mile from a BP station and feels he must sell at the same price but if he had to pay Gulf’s prices it would mean selling at a loss.
This buying around of course did not please Gulf and he has had a couple of visits from reps since. But the situation was not resolved and both have decided to call it a day. He has offered to change the logo and pay for it and this has received verbal agreement.
But he is still ticked off that the deal originally offered did not prove to be ‘competitive’ as he was promised. “I’ve been in the petrol game for 40 years and I’ve dealt with Esso, Petrofina, Jet, Chevron, you name it. Gulf looks great but it misrepresented the deal to me.”