For a long time, the forecourt market has involved running two businesses of equal importance, and with the help of both fuel suppliers and symbol groups, independent forecourts have a real opportunity for success both inside the store and on the forecourt.
The future of independent forecourts has begun to look a little brighter in the last year. While competition, and issues over pricing continue to have an impact on the sector, huge progress has been made on store standards overall, with more forecourt operators than ever before realising that they have to run two equally important businesses – that of fuel sales and convenience store.
They have been helped by an increased investment by both fuel operators and symbol groups. One such move saw Jet launch an initiative to give its dealers access to four bespoke levels of retail support.
To deliver this long-term programme, Jet has entered into a five year agreement with Spar UK, which means any new sites joining the network – will have the choice of four options and can select the support package that best meets their own shop needs.
These are:
- Symbol Partnership: aimed at larger convenience stores that would like to be part of the Spar brand with multiple retail formats. Dealers can choose from various branding options for both their forecourt and shop. Combined with a raft of Jet exclusive benefits, savings, and promotions this offer adds real value to dealers.
- Wholesale Convenience: aimed at dealers who would like to be part of the ‘Lifestyle Express’ symbol group. As well as benefitting from Jet exclusive rebates, dealers choosing this option will be offered support via retail consultancy from Make More Margin and receive industry updates via Jet’s membership of ACS.
- Wholesale: for those dealers that wish to retain their own shop brand but would benefit from a wholesale supply service. Dealers will benefit from Jet exclusive quarterly rebates offering potential annual savings of thousands of pounds, along with Jet’s support options via Make More Margin and ACS.
- Independent: for dealers that wish to operate their shops independently but could benefit from additional support, such as Make More Margin retail consultancy services, ACS updates and access to Jet exclusive deals, preferred suppliers and industry experts.
Euro Garages teams with Spar to launch first Scottish store
Euro Garages, the forecourt firm founded in 2001 by sibling entrepreneurs Zuber and Mohsin Issa, has opened its first Scottish site, in Dumbarton.
Lomondgate Service Station is a £2m investment and has created 53 new jobs for the local area. The site features an Esso petrol station with a Spar convenience store, a Subway, Greggs and Starbucks on-the-go concessions.
Ilyas Munshi, Commercial Director, said at the time of opening: “We would like to express our sincere thanks to West Dunbartonshire Council and CJ Lang for proactively embracing and supporting the inward investment on the A82. We will continue to work with local partners to service residents and business commuters, as well as the many tourists who frequent the area.”
Euro Garages is a firm believer in the power of branded partnerships with the firm working with Subway, Starbucks, Burger King and Greggs .
A major distinction of the business is that it owns, operates and manages the sites and various retail brand offers. Euro Garages operates an extensive network of forecourts, mainly across the North West England.
Stuart Cufflin, JET’s Transport and Retail Contracts Manager, comments: “Jet’s new convenience initiative has been over a year in development. The retail element of a forecourt has never been more important so we wanted to develop a programme that encompassed a range of retail support packages. We recognise that there’s no ‘one size fits all’ solution when it comes to forecourt retailing so this programme is all about enabling our dealers to strengthen their own unique retail offering and providing our dealers with choices to select the right solutions that will enhance their businesses.
Although other fuel suppliers have entered into arrangements with symbol groups, Cufflin believe this is the first time that this range of bespoke retail support packages is available to UK dealers. “We’re confident that dealers will see real value in the packages, particularly in terms of the consultancy support and the financial benefits of the rebates we have negotiated on dealers’ behalf,” he adds.
Finding the best option
Another symbol group showing real progress in the forecourt sector is Best-one. The company is showing strong growth overall, with sales up 30% in 2014. While some of this growth came from retailer recruitment, most has come from a 22% increase in like-for-like sales from existing stores, driven by an emphasis on mission shopping, an improvement in their promotional offering to members and the My Rewards retailer rebate scheme.
James Hall, Symbol Director, Best-one says “Forecourts are incredibly important for today’s shoppers. In the past forecourts were simply destinations for fuel but now forecourts that offer a good convenience offering can see sales increase dramatically as they provide solutions for lunchtime and evening meal trade. Including licensed and a comprehensive food to go provision will encourage additional sales and passing trade. We are now at a stage where some Best-one members no longer see fuel as the main traffic river to their forecourt.”
Thurso all set for Jet
Jet has secured its most northerly Scottish site following the signing of a five year contract to supply Ormlie Filling Station in Thurso. The site is owned by Simpson Oils, one of the largest fuel distributors in the far north of Scotland and a longstanding wholesale customer of Phillips 66, the international oil company behind the Jet brand.
The news comes on the back of a number of other successes for the fuel brand in Scotland, including the resigning of a contract with Springburn Service Station in Glasgow – a 48 nozzle site that is the largest in Jet’s Scottish network.
Jet was also the fuel brand of choice for Co-operative Food following a £5m programme of investment to overhaul its Aberfeldy filling station and supermarket.
The Ormlie site in Thurso, which had previously been both BP and unbranded, lay empty for four years before Simpson Oils bought it in 2014. Ormlie Filling Station is Simpson Oils’ first petrol station. Following a nine month redevelopment project, Ormlie Filling Station reopened to the public in early May. Significant investment sees a new 60sqm Lifestyle Express convenience store and greatly improved forecourt facilities including a jet car wash, air and water tower, 24-hour pay at pump and in-store cash machine. Kerosene and gas oil will be available on site.
Hugh Simpson, Director of Simpson Oils, comments: “We knew we had to choose a really strong fuel brand to compete with the two other forecourts in Thurso. With its competitive pricing, JET was simply the best solution for our local customer base. As a Phillips 66 wholesale distributor for over six years, choosing JET as our fuel brand also feels like a natural progression. We know the company very well and have an excellent working relationship. Security of supply was also a key factor in our decision-making process.”
Bestway Direct, the delivered arm of the group, already delivers in excess of £650m to its Best-one symbol and delivered accounts every year. The group’s latest initiative focuses on the introduction of a Lifetime Cost Benefit model allowing multi-site retailers to analyse their businesses with Bestway demonstrating the true cost of doing business with the group in comparison to their current suppliers. The Lifetime Cost Benefit model will factor in all the necessary considerations that will be levied against the operator’s business such as the cost of goods, investments, rebates, fees and surcharges. The model will then build a transparent report on how switching to Bestway Direct can add value while driving down operating costs for each potential partner.
Hall concludes: “We know that the Best-one model works – our figures over the past year are the best in the sector – and that’s why so many retailers are joining. And those members that are coming on board are benefiting from My Rewards – the average payout to participating members is more than £7,000 per annum – helping them to reinvest and become even better sites. With the introduction of the Lifetime Cost Benefit model, we now have a competitive solution to help all retailers from the largest multi-site operator to the professional sole trader the opportunity to realise the potential of the convenience sector.”
