Forecourt Trader - 30 years at the heart of the fuel retailing community

Powering into future mobility

Fuel cell electric vehicles will be the mainstay of vehicles going forward, according to Jon Hunt, manager of alternative fuels at Toyota. During an enthralling presentation at Forecourt Trader's inaugural Summit at The Belfry Hotel in Sutton Coldfield last month, he told delegates that Toyota believes "pure electrification is not the dominant route we should be taking, despite what your hear"

But he also stressed that this is not just Toyota's view a recent annual survey of global automotive executives by KPMG, revealed that 80% believe fuel cell electric vehicles (FCEV) will be the real break-through for electric mobility. "What we're seeing today is a rapid shift into battery, because in order to produce fuel cell power, you need to have an electric power train first, so that's where the development is occurring, before moving to FCEV. Notwithstanding that, there are many manufacturers who have huge issues of achieving their emission reductions to avoid fines, that means they have to have a certain proportion of zero emission cars. That is distorting the market... Early in 2021 will see our second-generation hydrogen vehicle, the Toyota Mirai... be sure that this sector is going to grow and expand."

Hunt said that Toyota, as an engineering company, had been working on various technologies for many years, and has sold more electrified vehicles than any other business... "so we have a great deal of experience and understanding". He stressed that batteries have massive constraints in terms of the considerable resources needed to go into them, relative to the power they provide. He said that when you look at the roadmap of developments, there will be a mix of solutions, but Toyota believes that in the heavy duty larger market, fuel cells will increase and expand quite rapidly, then drift down into the other markets.

Hunt told fuel retailers that he doesn't believe in a future where lots of big, fast chargers will be blocking up forecourt parking spaces: "A rapid charger could cost operators £120,000. To plumb it in maybe another huge sum.. you could spend hundreds of thousands of pounds on systems that can become quickly redundant. You need to be cautious about how you do that."

Bernadette Williamson

General ManagerUK Retail, Shell

Forecourts are morphing as businesses and should be regarded as 'mobility retailers', said Bernie Williamson, Shell's UK general manager. In her presentation on 'Preparing for the forecourt of the future' at Forecourt Trader's inaugural Summit last month she told delegates: "We're looking after not just vehicles, but people on their journey. It's more important that we talk about the services that we're offering we're serving really busy people on the go."

She revealed that on Shell's company owned sites, one in three transactions is for convenience retail only, which represents a massive opportunity: "The forecourt convenience sector is growing about 3% faster than the overall convenience market. But the market is set to be huge and still massively growing £8bn is out there and up for grabs by 2023 apparently. I think it's a prize worth going for."

Williamson also talked about the importance of trust and loyalty, referring to a survey that showed "more trusted companies can sell us three times as much as less trusted companies, and can charge a 13% price premium".

She also referred to another survey that revealed one third of people are disconnecting from companies they consider to be less ethical; while conversely more than a third are connecting with companies they consider to be ethical.

To this end Shell has undertaken several initiatives to reduce its carbon footprint. "Our service stations now have less than 50% of the carbon footprint they would have had two years ago, because we have now switched to completely renewable electricity in our company-owned estate," explained Williamson.

Last year Shell installed 70 new EV charge posts on its service stations. These were predominantly 50kW per hour, enabling a 30 minute/80% charge; but the company is now moving into ultra-fast charging enabling a 10-minute/80% charge for cars that can take it.

"We're also hosting three hydrogen stations we will do more and we're learning... "We're offering a mosaic of solutions for our customers, until the future becomes clearer."

Jamie Baker

Director of External Relations, UK Petroleum Industry Association

Low-carbon liquid fuels have the potential to play a big part in the government delivering on its 2050 carbon emission targets, stressed Jamie Baker, UKPIA's director of external relations.

"We think electrification has a large role to play in certain applications, but there are a number of areas that are very difficult to de-carbonise," he said, mentioning the 39 million or so UK vehicles on the road which mostly run on a liquid hydrocarbon. "The means by which the government is trying to reduce the carbon intensity of the transport system, by picking one technology over another in this case electricity over every other is not what we believe is going to be the way forward. We think there may be an opportunity to use the existing infrastructure the forecourts, the pipelines, the tankers to deliver in order to meet those de-carbonisation goals." Baker said the government was under pressure from various eco campaigners who want action today; who believe what the government committed to five years ago simply wasn't good enough. "They want to see actual change today. Perhaps the government has played to the crowd a little bit, in saying electric vehicles are zero emission so they're going to push those very hard to a difficult timetable."

Baker said low-carbon liquid fuels, which are not used in big numbers yet, could reduce total life-cycle GHG emissions by a considerable amount up to 80%. "And that's actually pretty equivalent to what you see in electric vehicles once you take into account the difficulty of building bigger batteries."

Brian Madderson

Chairman, Petrol Retailers Association & Car Wash Association

PRA chairman Brian Madderson was able to unveil a number of major victories in his other role as chairman of the Car Wash Association (CWA). The CWA was formed to lobby on behalf of operators of legitimate car valeting services who were being driven out of business by non-compliant hand car washes (HCW). After intense campaigning by the CWA and other organisations concerned about the criminality involved in the HCW sector, the new director of the Office for Labour Market Enforcement, Matthew Taylor, has stated that the HCW sector is "endemically non-compliant" and that a national licensing scheme for all hand car washes should be introduced within the next two years. Madderson said this was an important victory, but warned: "It is really critical for dealers who have allowed hand car washes onto their sites to make sure those hand car washes are legally compliant when the national licensing scheme comes forward. If they aren't, and if they are trying to buy or sell sites, this could be a big stumbling block to an effective transaction."

In his role for the PRA, Madderson urged caution for retailers considering installing electric charging, particularly on smaller sites. He said: "Frankly there are probably more interesting investments with a quicker return for you at the present time than putting in charging points." For dealers considering installing chargers, he advised: "There are three different guides which need to be read and understood the Energy Institute, the IET and PELG."

Steve Rodell

Managing Director Retail, Christie & Co

Will the Road to Zero impact the value of my PFS business, was the title of the presentation at Summit 2020 delivered by Steve Rodell, managing director retail at Christie & Co. "If you thought Brexit was taxing then try deciding when the onset of alternative fuels will have an impact on the value of PFS when the Road to Zero could bite," Rodell said. He explained that last year Christie & Co advised on around 5,000 retail businesses, which included around 900 PFS and sold around 60. "In January we launched our Business Outlook and I made a statement in there that PFS will remain relevant for the foreseeable future because that's the sentiment I was getting from the marketplace and, from everything I have read, that's what I believe." He explained that there are only two variables that affect value: income from operation or income from rent.

He said the only factor at risk is to a forecourt's fuel sales. "Even if fuel does tail off in the long run, people have still got a load of reasons to visit a PFS's retail facility such as the convenience and food to go offer..."

Arthur Renshaw

Major Account Manager, Experian Catalist

Esso is set to overtake BP as the most numerous brand on UK forecourts, according to Arthur Renshaw, major account manager, Experian Catalist. He explained: "In terms of supplier brands BP has the most sites in the UK with 1,223, but only five behind them is Esso with 1,218, the closest they have been in years. Esso put on more sites in 2019, thanks to the efforts of Greenergy, than any other brand. They put 32 sites on and are very much trying to overtake BP. I fully expect Esso to become the number one retailer in the number of pole signs this year." Meanwhile, he said the dealer sector was down 49 sites to 5,421, but he said it remained strong: "Dealer sites are in demand, good margins are available and there is a queue of potential purchasers."

Sarah Coleman

Project Manager, HIM/MCA Insight

Forecourt convenience store sales are set to grow 3.8% to £2.9bn in 2020, well ahead of the 3.2% growth forecast for the overall convenience retail market, according to exclusive research from the HIM & MCA Insight UK Forecourt Market Report 2020. The report highlights that retail sales from all forecourt shops (excluding fuel) are set to reach £4.6bn in 2020, and forecourt c-stores are set to make up over three fifths of this.

The evolution of shopper behaviour has forced forecourt retailers and operators to invest in their stores in order to make their sites a destination for shoppers and not just a petrol station. Only 19% of forecourt shoppers cite fuel as their main reason for visiting and nearly a quarter (24%) of shoppers who visit a forecourt convenience store travel on foot rather than in a vehicle.

Sarah Coleman, project manager at MCA Insight & HIM said: "The UK forecourt market has evolved considerably in the past decade from a time when the fuel mission accounted for over a third of visits, to now accounting for less than a fifth. Retailers and operators are feeling the pressure or seeing an opportunity to find alternative and innovative ways to drive footfall to their stores and thereby capitalise on the growth opportunities in the market."

Aoife Kearney

Food Concepts Manager, Maxol

Irish forecourt brand Maxol has been busy developing its food-to-go offer to maximise the opportunity that's been presented to them from their customers' growing appetite for food on the move. Aoife Kearney, food concepts manager at Maxol, told delegates that in the past their forecourt stores were just a box, where customers paid for their fuel, picked up a newspaper and nothing much else.

Fast forward to 2020 and the sites are bigger, better and brighter with branding on the shop buildings that shouts about the food offer inside. Kearney said they had done a lot of research into their customer base.

"We wanted to make sure we are keeping them happy, fulfilling their current needs and keeping an eye on what they want for the future so we can move with them, so we undertook an extensive research project that looked into their behaviours and attitudes. It identified three core customer groups. Kearney then moved on to the specifics of 'elevating' Maxol's food to go, focusing on five different pillars: Deli, Grab & Go, Coffee, Bakery and Franchise Brands. One of many initiatives included the introduction of the Rosa coffee brand which uses 100% Arabica bean that's unique to Maxol and has best-in-class equipment with milk froth technology and telemetry.

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Weekly retail fuel prices: 25 May 2020
RegionDieselLPGSuper ULUL
East112.28121.59106.87
East Midlands111.76123.12106.54
London113.47124.97108.20
North East110.34125.25104.79
North West111.33119.82106.56
Northern Ireland108.52111.40102.55
Scotland110.64121.62105.63
South East113.2059.90124.27108.35
South West111.83124.12106.47
Wales110.29113.90104.94
West Midlands112.13125.12106.81
Yorkshire & Humber111.6957.70121.80105.92

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