Battle of the pumps

The petrol forecourt industry has seen plenty of battles over the years, however recent trends seem to suggest a settling down of this once volatile sector, and it appears that there is now room for the independents as well as the multinational oil barons.

Overall forecourt site numbers have dipped by more than a third across the UK in the last 10 years to below the 10,000 level, in addition the rate of decrease has fallen away significantly, leaving those still trading in a much stronger position.

There have been changes in the industry on the prime product of sale, namely fuel, as we see new types of cleaner fuel making it to the pumps, but then most users of the countries forecourts are swayed by price or locality, so it’s no surprise that the operators are trying to attract us with their grocery/convenience offer.

Tesco continues to develop this arm of their global business, now accounting for 13% of the market share in the sector, second only to BP on 15.9%, ahead of Shell and Esso. Morrisons too has developed a strong fuel business, now operating 278 sites at its supermarket premises, somewhat bucking the trend of the big 4 as they operate a larger fuel business than Sainsburys (244 sites) and Asda (167 sites).

The independent sector is currently showing resurgence, whereas in the early 1990’s it was these operators who suffered at the detriment of the big players, they are showing their resilience and have bounced back. The emergence of independent groups that are building their own networks of sites is the driving force behind this change, the most significant being the Malthurst Group, now operating 160 sites, up from 146 last year and is still looking to expand further. Other movers in the business are The Park Garage Group, with 87 sites, MPK another big mover on acquisition of recent times taking their portfolio from 26 to 60 sites and also the Motor Fuel Group developing from 27 to 70 sites.

Much of this growth has come at the expense of the big oil companies who have realised that they have limitations as retailers in some areas. Smaller sites have now been sold off in favour of larger transit locations, and others linked up with specialist food retailers like M&S, Sainsburys and Tesco to satisfy the demand for a broader convenience offer and capitalise on the prime locations to drive volumes on the food side of the business.

Smaller brands such as Spar, Mace, Costcutter and Budgens have all seen the merits of forecourt locations and continue to push themselves in to locations that suit their demographics and where they can capitalise on already established footfall.

Overall the petrol industry has seen significant changes and now supports formats and brands of all sizes and seems set for a successful period of trading with more development to come. What has been a difficult sector with many casualties along the way has generated a truly sustainable picture, one that supports traders of all all sizes and seemingly not monopolised by the traditional big 4.