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Leader of the pack

30 June, 2009
A new autobiography reveals how Gerald Ronson changed the face of petrol retailing for ever as he opened his first site in the '60s merril boulton reports
Page 22 

Most people remember 1966 as the year England last won the football World Cup. But those in the fuel industry (at least those with enough grey hair to have been around at the time) will associate it with another significant event.

It was the year Gerald Ronson - a dashing young millionaire property entrepreneur - decided to go into the petrol retailing business, and instantly turned it on its head.

The revolution began on April 6, when he opened his first site, in Marshalswick Lane, St Albans, offering petrol at five old pence (5d) per gallon less than the major oil companies. By mid-morning there were long queues, prompting the arrival of police to direct traffic.

By the end of the day, the site had pumped 45,000 gallons. It attracted so much public attention it was reported on the evening TV news.

For Gerald, the founder and chief executive of Heron International, it was the start of an enduring passion for the petrol retailing business, which combined his property and his business expertise. In the early years his entrepreneurial flair led to some ground-breaking initiatives which have shaped today's forecourts. We're talking about cut-price fuel offers, customer reward programmes, the first self-service station, the first convenience store, spacious forecourts and a focus on American-style service in a quality environment.

Gerald has just celebrated his 70th birthday, and with a life story that sounds like a script for a Hollywood movie, it is now available for all to read in his newly-published autobiography 'Leading from the Front'.

"I didn't expect our first forecourt site to take off in that way," he says. "I thought we'd do well but I didn't visualise a queue that was two miles long. It was revolutionary because no-one in the UK had figured out that petrol could be discounted. Petrol retailing had always been a boring, conventional business controlled by the oil companies. They didn't like it when along came this renegade called Gerald Ronson.

"Oil companies were making 30d a gallon. They could buy out anybody and everybody and didn't want to supply anybody to change the pattern because they were making a fortune. It was a monopoly. That's why there was a Monopolies Commission report about that time that broke up the industry.

"That meant oil companies couldn't sign you up for more than five years on a supply agreement. Before that they could have you tied up for 20 years. But my plan to undercut their prices meant I couldn't buy a supply of branded petrol from them."

Undeterred, Gerald went to an old-time Texan oilman named Don Johnson, who was managing director of Phillips Petroleum. The supply deal was done on condition there was no brand. The fuel was delivered in grey tankers, and the forecourt was branded Heron. Within a year the company had opened the UK's first self-service site - in Heston, Middlesex.

"We got a Swedish company to manufacture a proper self-service pump, and again there were long queues when the site first opened," says Gerald.

In fact queues at Heron sites were a common occurrence because in the first week of opening, the offer would be one shilling-a-gallon off.

Gerald had opened 12 sites within his first year in the business, 25 sites the next, then 40. "We got to the point where we were opening and building one site a week," he says. "Ten per cent were green-field, new-to-industry sites, the rest we expanded, buying extra land. We changed the layout of the forecourts so there was room for passing lanes. Our sites had to be the best in the area."

In those days the forecourt 'shop' was no more than a - usually grubby - kiosk selling a few cigarettes and vital car accessories, certainly nothing like the grocery palaces of today. Gerald saw an opportunity to develop the entire forecourt offer.

"I could see it more clearly because I came in from the outside. Buying petrol is boring - it's invisible, expensive, you don't really like doing it, but you have to in order to drive your car.

"I wanted to change the whole experience of buying petrol. A lot of inspiration came from America - as in the size of forecourts; cleanliness; equipment; marketing - giving away glasses and stamps (hence the Heron Gold Stamp); dressing up sites with bunting. Our sites had the 'Service is our business' slogan, offering to wash people's windscreens and check their oil and water. We had pretty girls on the forecourts in the summer giving out promotional leaflets. It was exciting.

"We changed the whole pattern of buying petrol."

In the '70s Gerald saw the opportunity to sell food on the forecourt and sought the assistance of an American specialist who transformed the stores. "We put in fryers serving chips; we sold sandwiches, hot dogs, and many convenience items. We found that compared to a normal shop taking 3-4000 a week, we were taking double."

Gerald has built nearly 1,000 forecourts over the years and sold more than 900 of them to major oil companies. His organisation still operates 74 sites under the umbrella of Snax 24, and he continues to make his legendary Saturday tours of the network (about 40 a year) during which he can turn up unannounced on a site and scare the living daylights out of anyone who is not doing their job properly.

He's a stickler for detail and knows where everything in the store should be - because there is a predetermined place for everything. He doesn't suffer fools, but takes great pride in the many long-serving members of staff working at his London head office and out in the network, right down to the cashiers. Managing director of Snax 24, Bill Ahearn, for example, has been with the company for 35 years.

As for the future, even with all his considerable other business and charitable concerns, Gerald has no plans to get out of petrol retailing. In fact his organisation has just taken an interest in a company developing a large chain of forecourts in America.

"I have a passion for the petrol retailing business - I've been in it for 43 years, and it's been very successful. As a business it's loyal - it always performs. We've never had a year when we've lost money. And in terms of consistency of standards across a group, there is still no one to touch us. For the foreseeable future, I wouldn't sell it - although I do get offers. I know the business like I know the pulse on the back of my hand. I can feel it and I still enjoy it - although sometimes it's like going from the ridiculous to the sublime! But it's always been my baby - and it's part of my life. I call it my Saturday job."

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=== gerald's story - the good and the bad ===

Gerald Ronson left school at 14 to work in his father's furniture factory, starting at the bottom sweeping floors.

The family then moved into property and the company grew exponentially, becoming the second-largest private company in the country in the '80s. Under Gerald's directorship Heron (created from his father's name Henry Ronson) has developed 156 buildings in the key business districts of nine leading UK cities. His latest project is the iconic 46-storey, 202 metre-high Heron Tower, which will be the tallest building in the City of London. He has also raised more than 100m in his lifetime for charities.

He has suffered two major crises - the Guinness affair, the biggest financial scandal of the decade, in which he was found guilty and sentenced to six months in jail; and the Savings and Loan crash in the US in 1991, which cost him and his family nearly $1 billion.

He avoided bankruptcy by negotiating the first British version of a 'Chapter 11' bailout. He has spent the past 20 years rebuilding his reputation and his businesses.