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Pole position

03 October, 2005
Since taking prices down, Tony Barlow's sales are up
Page 34 
While there is growing debate among retailers about the display of polesign fuel prices, one man is not waiting around. Tony Barlow of Local Service Stations in Shrewsbury has taken them down – and hasn’t looked back.
“I took the prices down in May 2004 and very few people commented,” he says. “The volumes haven’t gone down – in fact they keep going up. The market has changed now – customers are buying from us because we’re local and convenient. Shrewsbury is a small town, with four supermarkets and about six service stations. People driving around these days are thankful to see a petrol forecourt.“Before the petrol crisis in 2000 we’d already lost the people that bought from us on price. They’re not going to come to us anyway. But we find that most people don’t know the price of fuel. They tend to buy in denominations of £5, £10, £20 and £30. People want to fill up and get home – they don’t want to wait in queues.”Tony was 21 when he first got into petrol retailing in 1964. He had a 13-year interlude at Kwik-Save and then went back into petrol. He rented a site in Shrewsbury in 1993 – Local Service Stations Sutton Farm; and five years later, rented out another about three miles away – Local Service Stations The Mount. Both sites feature workshop/car sales areas which he sub-lets, while he focuses on the forecourt business. He also now has a site on the Channel Islands – Alderney Fuel Services Ltd.“I had a supply contract with Butler on the first site, but when Esso’s Pricewatch campaign was launched the company bailed out of price support – they were really bad years. I came out of the contract in 1998 and decided not to have a contract with anyone and put the Local sign up. That’s what we concentrate on now – getting people to support their local independent forecourt business.”Up to the petrol crisis of 2000, Tony could sell his unleaded petrol at supermarket prices and make three pence per litre. But after the petrol crisis came the emergence of a two-tier pricing system operated by the oil companies through their subsidiaries and secondary suppliers. “I couldn’t buy unleaded for what the supermarkets sell at – and that is still the same today,” stresses Tony. “The supermarkets have adjusted their prices to 3ppl less than it was before the petrol crisis. In 2000, garages like this had no prospect of carrying on without the subsequent closures of other sites. But at least it was our decision whether to close down or not – other people had that decision made for them. Having two garages meant I could split the costs. My wife Nina and I worked solid for two years with no time off at all. That’s how we survived and it paid off for us.”Tony found himself displaying prices of 3ppl and then 5ppl above the supermarket, and he still wasn’t losing business. But while the price rises made sense in terms margin, he felt embarrassed. Therefore, he reasoned, if you don’t display them, there’s no need to feel embarrassed.The Mount site is an attractive forecourt with its colourful polesign and shopfront merchandise. It features a 40ft x 10ft Mace Express shop which is packed with convenience, impulse and promotional items. Tony has also captured a niche market in fuels, selling bio-diesel and 4-star – on which he makes 17ppl. He has two fuel suppliers – Bates & Hunt who are owned by Texaco, and Martindales.“Volumes here are 1.1 million litres,” says Tony. “On this road there is about 1.8mlpa. I could get that volume if I sold at supermarket prices, but make no money. So why not sell at 6.7ppl profit, and stick with the 1.1m?