Forecourt Trader

Look on the brightside

01 February, 2005
It could be worse - you might be an ordinary 'retailer'...
Page 18 
For the past few months we’ve seen our Database figures looking fairly depressed in terms of sales and profitability growth, and anyone listening to the big High Street names reporting their ‘disappointing’ Christmas season (which these days seems to cover anything between the beginning of September and the beginning of the New Year) results will hardly feel inspired. Yes, the retail trading environment in the UK appears to be somewhat difficult at the moment and petrol retailing is no exception. Or is it?
In the relatively short term, such as the latter part of 2004, petrol retailing isn’t entirely divorced from the retail sector in general; but looking over a longer period, it has consistently out-grown the rest – and by quite some way.Using historic-cost values (ie without any adjustment for inflation) EKW’s Petroleum Retailing Database figures show that between 1986 and 2004 ‘shop sales’ on our forecourts grew more than five-fold (by a factor of 5.37 to be precise). Over the same period, ‘all retail’ sales grew by a factor of only 2.4 times.Again, between 1986 and 2004 the ‘food retailing’ sector grew by a factor of only 2.7 times.Who says? Well, we do, but we have some pretty strong independent figures to use as a comparison between our own ‘petrol retail’ figures and those for the rest of retailing. For the technically-minded, the ‘all retail’ and ‘food retail’ figures are based on data published by the Office for National Statistics – if you’re really interested, look up their ‘EAFY’ and ‘EAFS’ Datasets. Their figures now use year 2000 values as a base, but go back to 1986, and we’ve simply re-stated those figures to make 1986 the base year to compare them with our internal data. In both our internally generated, and the ONS –derived, figures ‘2004’ is based on data up to end-November of last year.Just stop a while and think about it. ‘Food’ retailing is supposed to be one of the stars of the UK economy and shop sales on the forecourt have out-performed the rest of that sector to quite a spectacular degree over the past 18 years, which happens to be a period when forecourts have become predominantly ‘food’ retailers. Not bad is it? Give yourself a pat on the back! Now there’ll be some pessimists out there who will immediately bemoan the fact that over the same period the number of forecourts has dropped from over 20,000 to about 9,500 – and that despite that drop the average fuel volume in ‘our’ sector of petrol retailing is still only about 30% higher than it was in 1986. All of which is true, and some might say ‘sad’ – but so what? If you’re reading this, there’s a very high probability that you’re still actively working in this industry. You’re one of the survivors, so you still have it within your power to keep out-performing the competition!Of course, there’s no point sitting on your laurels; to keep ahead of the rest you have to look at what’s out there that might give you a competitive advantage and maintain tight control over your business. Rather than moan about the difficulties of something like chip & pin you’ll already be using the available technology and finding means to make it work smoothly. Rather than whinge about how many different shop lines you have to carry and how many orders there are to make out to different suppliers, you’ll be prepared to invest in stock management and control systems that allow electronic ordering and easy stock-checking. Instead of working in the dark on your sales, margins and costs, you’ll look for comprehensive management information systems that can show you results within weeks or even days. To stay ahead of the pack, you need to continue investing in your business – especially when others are simply thinking of savings, which tend to be the start of the slippery slope to quitting. Remember that you’re still here because you’ve looked ahead and overcome the obstacles, when others gave up!So, while the general economic environment may have been quite unfriendly over the past 12 months, it’s not all bad news. There’s a general election coming soon: even Chancellor ‘Prudence’ Brown isn’t likely to let that pass without some form of tonic for the voters – and already we’re hearing predictions that interest rates may start to fall again!Data supplied by EKW group