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Future of independent petrol stations in Devon under threat

By North Devon Journal  |  Posted: January 06, 2014

Petrol

Alan Bate at Darcroft Garage

Comments (4)

The future of independent petrol stations in the Westcountry is under threat unless something is done to curb unfair tax policy and supermarket competition, according to a leading industry figure.

According to the Petrol Retailers Association, many independent petrol stations are being squeezed out of the market, partly by supermarkets’ cut price deals to attract customers to their stores.

There are 58 fewer independent forecourts in Devon and Cornwall than in 2007, according to figures from the association, while there are 11 more stations operated by one of the big four supermarkets.

The number of petrol stations operated by oil companies have also fallen by six over the same period.

Brian Madderson, chairman of the Petrol Retailers Association, said there were two main reasons why small independents were under such pressure.

“One is the unfair competition from the supermarkets, who basically use fuel as a loss leader to attract people in to the stores,” he said.

“This has already been recognised in Australia as being bad for customers in the medium to long term as its going to cut our choice. The second reason is that the Government is still dictating that the small rural independents have to pay their tax on fuel virtually as the tanker arrives.

“I don’t know any other business which has been so impacted by Government policy.

“The regions are really going to find it very difficult (unless something changes).”

According to figures from the Petrol Retailers Association, the number of independently-owned petrol stations in Devon has fallen to 145 from 181 in 2007. In Cornwall, that number has slipped to just 82 from 104 six years ago.

There are now 52 petrol stations owned by one of the big four in the region, up from 43 in 2007. However, the amount of petrol stations overall has fallen to 308, with an overall reduction of 20% in small retailers across the whole of the South West.

Mr Madderson said people living in rural areas will see fuel costs go up as they drive further to fill their tank.

He said: “The real issue is that local area councillors and planners are seduced by the overtures of the big four grocers to provide jobs and better facilities for tourists and local residents and businesses.

“Too seldom do they stop to consider the impact of a new out-of-town store with a forecourt on existing petrol filling station in the local area.”

He is recommending to the Government that fuel stations run by big supermarkets should not sell fuel below cost price subsidised by high margin store goods.

He added they should also not employ deep discount tactics such as offering discount off petrol if so much is spent in store and that they should agree a “voluntary” fuel price curb. Elsewhere, he said fuel duty should be able to be deferred with nil security to improve cash flow of smaller stations.

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4 comments

  • Pravda  |  January 07 2014, 8:20PM

    I used to run a Texaco franchised filling station in north Devon at a time when diesel was £1.99 per gallon (and that isn't all that long ago!). Motor vehicle fuel was our loss leader, with a penny or two profit per litre. Offset that meagre profit with the costs of pump maintenance and other overheads directly connected to fuel sales, and we were not making anything. Profits were from motor oil, wiper blades, bulbs, confectionery, camping gaz, and tobacco sales where we had as good a margin as any like retailer. A car wash can make good margins too. If the likes of Asda can undersell motor vehicle fuel then so be it - and since we're all more or less forced to shop at such outlets we might as well buy their fuel and save a little per tankful. Independent fuel filling stations have known for decades that it'd be impossible to compete with non-franchised major chain filling stations, it's nothing new.

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  • DB361  |  January 06 2014, 9:36PM

    Once again on a story about independent traders, the media seems to be putting 2+2 together and getting 37. Let's look at the independent garages north of Barnstaple. Both Hele Bay in Ilfracombe and I believe the one near the Aggi in Braunton closed due to unrealistic demands by their suppliers (both had changed not long before they closed). The Foxhunters on the A361 has closed partly because the owner retired, but more significantly because the underground tanks are unsafe (hence the secure fencing around the site). Meanwhile, the garage in Ilfracombe High Street has lowered his prices and the one at Lynton Cross now has 24 hour facilities. The latter two are still open because they can see what their local market is, where the niche markets are and cater accordingly. Supermarkets have very, very little to do with any of this.

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  • ndjtom  |  January 06 2014, 12:01PM

    Are you serious about that vile woman?

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  • nickthompson  |  January 06 2014, 9:28AM

    Did not the great Lady Thatcher tell us that competition is good for us, she said "compete, they go to the wall" was she not also correct in privatising public transport, and the utility companies, telling us as she did how introducing competition would benefit all of us, clean, fast, and above all cheaper bus, and train travel, and far cheaper Gas, Water, and electricity bills, so it may well be that the sooner these independent petrol stations are forced out of business the better it will be for all of us, Lady Thatcher said so.

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