Difficult times for dealers
Keith Jewers reviews the latest crude oil prices.
"The last 9 months have seen dramatic rises in crude oil prices resulting in more than a 20% increase in the cost price of retail fuels. We have also witnessed a widening gap of 6ppl between unleaded petrol and diesel. Gulf fully understands the considerable difficulties this brings as we all look for extra funds to re-stock our tanks. With margins eroding as a percentage of sales and banks typically offering less as the spectre of a credit-squeeze gives them the jitters, market conditions are clearly less than favourable.
To add further gloom, whilst it is difficult to predict where prices will go next, investors in the futures markets suggest upwards, buoyed by increasingdemand from the rapidly emerging economies of China, India and the Far East. If that is the bad news, the good news is that many Gulf dealers are now better equipped than at any time in the past two decades to meet an economic downturn, having increased revenue streams and improved forecourt profitability. There is also the peace-of-mind in knowing that Gulf is in the fortunate position of having long-term supply arrangements at many of the UK's major terminals and a national distribution fleet at its disposal. This provides a secure and stable supply position for the long term development of Gulf's own retail business and that of its customers. Many of you have, in recent years, felt neglected and let down by your supplying company, with some forced to seek new fuel suppliers after many years of loyalty. Whilst you might say that it is the harsh reality of big business that the majors are consolidating their trading areas, it could equally be argued that they have not fully understood the dealer market, choosing the quick fix as opposed to developing long term dealer partnerships. Time-andtime again we see the rewards of two equally committed partners working together to guarantee the long-term future of a site for the benefit of the community it serves, the dealer and his family and the fuel provider. Gulf Retail does not have a company-owned operation, it relies solely upon its dealer market activities and as you would expect, has developed a sympathetic understanding of this high price, low margin environment.
Having worked in the dealer market since the mid 80s, I have seen many changes and none more fascinating than the recent increase in dealer site numbers resulting from divestments by the major oil companies. This is further proof that, in the hands of a committed entrepreneur, supported by the right fuel provider, it is possible to build a profitable long-term business. As Gulf Retail continues to develop its network throughout the UK, there is a general feeling of confidence that the dealer market has turned a corner; asset values are at an all time high and we have seen a transformation as traditional fuel retailers become accomplished convenience store operators. It is an area of the business that requires constant attention, the learning of fresh disciplines to achieve success, and demands an active input from the oil company in partnership with the dealer. Gulf has long recognised the importance of working with each dealer to improve cash flow and margins and it is so rewarding to play a part in the future success of a business."
Latest News
In with the Auld at new Alloa petrol station
11th May 2012
State of the art site goes Gulf
Read More…
