The key to a successful independent forecourt network is embracing innovation and operational improvements, according to the Kay Group’s managing director Richard Cox.
Presenting at the APEA Live 2012 conference last week, Richard said an organisation such as the Kay Group – a Top 50 indie retailer with 11 24-hour sites – could not survive on high fuel volumes alone, and needed to attract and retain customers through innovation and excellent customer service.
“We have to be best-in-class and continually manage the profitability of the business to maximise income, while always looking to reduce costs,” said Richard.
“Every investment or change must improve the business financially or the asset value, and the utopia would be both. We try new things but make sure we count the numbers and be prepared to change quickly if it doesn’t work.”
Richard said staff played a huge part in the group’s success, and the management encouraged them to give customers an engaging, friendly service and uphold high presentation levels on the sites. The company has reduced paid hours, but reinvested part of the saving into increasing pay rates.
“We have reduced staff costs – which are 60% of the total costs of the business – by 9%, but better pay attracts better staff, which promotes speed of service and has dramatically reduced staff turnover,” said Richard.
The Kay Group has also put a particular focus on creating cost-effective site developments, with the latest being in Formby, Liverpool. “We include contractors at the design stage and aim to have no replacement costs for 10 years,” said Richard.
“We have tank farm and offset fills close to the pumps to reduce the amount of pipework needed and purchase most of the materials and labour directly from suppliers. We project-manage each development and virtually self build. By acting as a clerk of works in this way we achieve a 25% saving on more traditional build costs.”
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