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Going for gold

27 August, 2010
Stuart Giles and Lee Mohamed are looking for quality not quantity with their expansion plans. Linda Harrison reports
Page 18 

Not many people would wave goodbye to a stable job at one of the biggest oil companies in the world to take on the challenge of buying their own forecourt.

But that's exactly what Stuart Giles did after working at BP for more than two decades and rising through the ranks to fuel sales manager.

Three years ago Stuart decided to leave behind the life he'd built up at BP to cross over to the other side of the fuel business. And in July 2007 he bought his first site, Sedgemoor Service Station in Bridgwater, Somerset.

After leaving BP three months later, he flew off for a holiday in the sun and to think about how to develop the site.

And it was while he was relaxing during this break that he received a phone call that would take his new fuel retailing business in a completely different direction.

"I was on holiday in Turkey and my phone went and it was garage owner Lee Mohamed at the end of the line," says Stuart. "Lee was trying to get hold of some contact details for a guy I knew, a rep, and he asked for my help. I explained that I didn't work for BP any more and then we got into conversation."

After Stuart returned to the UK, he and Lee met up and decided to work together. "I've never looked back," says Stuart. "We've known each other for about 20 years and we work so well together."

Lee has always worked for himself and his ventures have included operating a chain of video libraries and running a printing business.

His link with the fuel retailing industry came through his brothers who were professionally-trained motor mechanics. The brothers all bought their first garage and workshop together as a family business Golden Cross Service Station in Slough.

"The workshop was the main focus, selling petrol was by the by," says Lee. "And our business just grew." Work included carrying out a knock-down-and-rebuild at Golden Cross Service Station and putting in a highly popular and successful HGV lane. More sites were added and Lee had a group of three forecourts and three workshops by the time he joined forces with Stuart.

Busy times

It's been a very busy period of expansion for the Golden Cross Group since the two got together.

In March 2008, Golden Cross Group bought Piltdown Bridge Service Station in Barnstaple, Devon, and then acquired another four sites from Core Service Stations in the Midlands in September of that year. The group now has a total of nine sites eight BP and one Esso. All nine forecourt stores are Spar branded.

Lee says: "All our sites are developed and have good shops. And the fuel volumes are pretty high at every one of our forecourts."

Golden Cross Group was formed in 1990 but it remains largely just a name for the collection of sites to operate under the forecourts more or less all trade individually.

The group is looking to expand further in the future and its aspiration is to have about 25 sites but Stuart and Lee are looking for quality and not quantity in any additions. Stuart explains: "We look for a minimum of 4.5-5mlpa at a site with a main oil company and shop sales of £15,000 or above per week. But if we found an opportunity with another site where we could improve and expand it, then we'd look at that too."

Lee adds: "The market has become quite hard and good sites are very difficult to find. That's put the dampers on our own expansion. We could have had 20 or 25 sites by now but we want the right sites. It's all about location."

Their sites are mostly located in the Midlands, home counties and the South West, but they say they are happy to look in other parts of the country.

Inside the shops, alcohol has been a big winner for the group eight sites have an off licence and run plenty of promotions associated with the category.

Looking after staff

Stuart and Lee also believe in training staff and, on average, they say they pay employees above the minimum wage. They proudly add that they have a very low staff turnover.

Staff training includes introducing higher customer service levels at every location, including making sure customers get service with a smile.

Some sites offer food-to-go and the majority have Coffee Nation. All have ATMs and most offer the National Lottery.

The fuel offer at all of the group's sites will be up for tender next year, so it's interesting to hear what the pair make of the recent headlines about BP and the oil spill in the Gulf of Mexico. "I don't think the UK has been hit like the US," says Stuart. "We haven't experienced our volumes being hit because of the BP Deepwater Horizon disaster. Where we are being hit in the UK though is with price from the hypermarkets that erodes our margins. BP is still a fantastic prime brand and a respected brand which has trusted quality fuels."


Facts

l Established by Lee Mohamed and his family in 1990

l Based in Slough, Berkshire

l First site: Golden Cross Service Station in Slough

l Stuart Giles buys his first site, Sedgemoor Service Station in Bridgwater, Somerset, in 2007

l The group has nine sites mostly located in the Midlands, home counties and the South West

l Oil brands: BP and Esso

l All the stores are Spar branded

l The group has about 140 employees including non-forecourt staff

l All sites use Fairbanks to monitor wet stock