It’s been more than a year since Ramsay MacDonald took charge of the GB Oils fuel retailing business as retail director. His first duty was to bring a sense of order to the retail network in the aftermath of acquiring the Total and Pace dealer operations. His next and continuing duty was to develop the Gulf brand in the UK.
Meeting in London before Christmas, MacDonald was feeling very "chipper" about some fantastic stories of volume growth within the network. One site in Surrey is up 50% on volume within three months of moving from Total to the Gulf brand: "The Total image was looking tired so the site has been brightened up," explains MacDonald. "The retailer has also been doing a few pricing tricks, but to hear that kind of volume improvement is amazing.
"An Esso site we acquired Carronvale in Larbert, Scotland has shown a 20% increase in volume. We’ve worked hard at it, doing all the things we preach about to get standards right. We’ve introduced a Londis shop, redone the canopy edge and lighting, canvassed local accounts and so on."
MacDonald says these successes show the potential for the brand but there’s still a lot of work to be done.
"We’re still at about 1,200 sites, accounting for about 22% of UK dealer volume. We put on about 40 sites and lost about 40 a mixture of some we wanted to lose, some we didn’t. There was quite a bit of bad feeling on the Total cogop sites we walked into quite a few of those early on.
"But I’m quite encouraged now as I think we’ve got a good band of supporters behind us that we’ve demonstrated trust to. We’ve had 60 re-signs in the past year, either re-signing to Total (11) or going to Gulf (49), so it’s been a very busy year. The critical mass of Gulf signings came after we held three roadshows in the summer. We’ve really been pushing the Gulf brand since then."
MacDonald is very pleased with the progress made in 2012: "The key goal was to stabilise the business, complete all the dealer novations which we did very quickly by the end of February we had 95% of those complete. We had to demonstrate to the dealer community that we were very serious about petrol retailing that we could deliver. When we first arrived there was a lot of confusion. People would say ’who are these guys, where are they from, what’s their commitment?’ I think we’ve demonstrated our commitment.
"The roadshows one each in York, Birmingham and Windsor, attended in total by about 60 retailers were very effective for getting our message across and we had fantastic responses to them. One dealer stood up and gave us a round of applause! I wouldn’t say they were disgruntled retailers, but they’d had 18 months of not knowing what the future might hold."
The past 18 months has also featured removing back-office systems, moving the office from Watford down to Egham, dealing with the fuel panic in April, the integration of Pace, and then the big challenge of sharing the Rontec fleet and bringing it into the GB Oils distribution network at the end of September.
"That went much better than anyone could have expected both from our side and the customer’s side and, by and large, that’s working well. In 2012 we also did a retail restructure, integrating all the GB sales forces, and we’ve taken on some new people as well."
On top of all this, the Superstation competition was launched. "It’s an appearance standards competition," explains MacDonald. "It’s all about sitting down with customers and marking the site on a series of criteria with a view to seeing from a customer’s viewpoint what can be improved. The serious aim is to say ’how can you pinch business from your competitors’."
Other developments have included offering new PRA membership to all new Gulf dealers; integrating the Butler operation; and the acquisition of Scottish Top 50 Indie Calanike, which had gone into receivership. "That was very sad, we wanted to keep the business going," says MacDonald. "There’s a great bunch of people on those sites, there was a lot of loyalty to the business and they had nine torrid months of being in receivership.
"We looked at the business in several ways we could sell some of the sites and put them back into the independent sector; and we could build some brand presence. At the moment they’re all BP and Esso branded. Next year we’ll certainly move a proportion over to Gulf. We’ve now got 18 company-owned sites 17 from Calanike plus Carronvale. They give us a great opportunity to test our brand ourselves, showcase the sites to dealers and test things out. Everything’s being done with a view to how we can enhance our dealer offer.
"Already we’re having much richer conversations with the symbol groups, the pump manufacturers, and suppliers. Having the co-owned sites means you can see the whole process ’soup to nuts’.
"For example, in terms of looking at symbol operators we can offer more help to retailers than "it has a pretty fascia". We can find out how the invoicing works, how easy it is to implement price changes, how the online system works, what kind of margins can be made detailed stuff that suddenly makes you much more proficient at describing and discussing and giving better advice."
MacDonald says he wouldn’t rule out buying further sites. "But ideally I think we might look at selective acquisition to build brand presence in certain areas. But it can’t be a distraction from the dealer focus." To that end the company is looking at enhancing and developing its entire fuel card and polling package. "We’re obviously looking to push the Gulf fuel card, but as the generation of equipment that needs to be PCI compliant for credit and fuel cards comes to an end, dealers will need to get some new form of credit card acceptance package, and we’re looking to develop that across the whole network. Fuel cards can be key to getting control of local business, and that’s got to be a good thing. We have a new fuel card company Fuel Card Services, and we’ve done a lot of work already."
A major project for the New Year is to commission some research to discover what end users (motorists) feel about Gulf what areas they like, what areas they’re not sure about, with a view to understanding the brand’s position in the market. Then the findings will be discussed with the dealers.
"One area we really want to make a push on is group conversions. We have started making inroads most recently we signed up Park Garages with 11 sites. But we want to win groups off our competitors as well."
Consignment stock model Trial in 2013
Ramsay MacDonald is looking at trialling a consignment stock model for dealers: "Instead of selling dealers a tanker of fuel, and suddenly they’ve got to find £50,000 from day one to pay for it, we would retain the title to the stock in their tanks, and they would remit the payment to us as they sell the fuel on a daily basis. You’d need a good fuel monitoring system such as the Fairbanks system we’re installing on the Calanike sites.
It would considerably smooth out cashflow peaks and troughs for the retailer. We have a couple of retailers in mind that we’d like to progress it with. It’s very much on our hit list for 2013. It would work well for the smaller guy but some of the larger groups don’t particularly want their managers ordering fuel. For those guys there’s the ability to do automatic replenishment if they want to. There’s more a need for it now than ever. The arrangement fees the banks charge for bank guarantees or property charges are only going in one direction. This would help those fantastic retailers who just can’t access funds; and benefit retailers across the volume range."