Flying the flag: IFCR interviews Maxol CEO Brian Donaldson
Maxol CEO Brian Donaldson talks to IFCR about how the group’s new major project in Holywood is leading the way, how the company has navigated the fuel crisis and what lies down the road ahead.
If all goes well, future forecourt owners will be looking to the revamped Kinnegar Service Station in Holywood, Co Down, as a blueprint for how to incorporate sustainability into forecourt design, which, at Maxol Kinnegar features a newly extended Eurospar with deli, self-checkouts and increased carparking.
Maxol CEO Brian Donaldson says that not only will the flagship project be the company’s first dedicated EV hub on the island of Ireland, but it will also implement their new sub brand Maxol Recharge before it is rolled out elsewhere.
“Kinnegar is going to be our innovation hub to test the different types of chargers that we will operate under the Maxol Recharge brand, including very fast rapid and slower 50kW chargers,” he says.
“Really what we’re looking at is testing the technology, getting to better understand the early EV adopters and making sure that we are investing in the right way and giving the right experience to the customer.”
Location is key
The choice of the relatively upmarket village of Holywood was no accident, he explains.
“We selected Kinnegar because of the local demographic (medium to high income households), high rates of EV adoption and ownership and because it had the right footprint to facilitate an EV hub,” he says.
“We obviously are working closely with NIE Networks in getting the capacity and sufficient power supply needed for the EV charging hub.
“The kind of power that’s going into Kinnegar for the EV hub is around 550 KVA, which is equivalent to that needed for a small housing estate of about 15 houses.
“We’ve developed our own bespoke canopy which will have solar panels on the roof. We’ve created a completely new suite of point of sale to make it easy for the customer to identify the different types of chargers, whether it’s a 50kW charger, a 100kW charger or a 175 kW charger.
“We’ve also developed our own payments technology which links into the forecourt controller in terms of how we charge per kW. We also wish to introduce a surcharge for customers who overstay beyond the recommended period of time to help ensure they don’t restrict the facility for other customers.”
Blueprint for change
The charging hub isn’t the only feature that is showing of Maxol’s environmental leadership – the entire site is being designed with sustainability in mind, and is trialing new technology to cut energy consumption, Brian says. “It’s probably going to be the first location where we’ll install solar panels to generate some of our own electricity,” he says.
“We’re looking at developing an energy management system that controls the use of energy in-store, replacing all of our refrigeration with closed refrigeration, and we’ll be recycling the heat from those units within the premises as well.
“That’s on top of the good work we’ve been doing with grey water collection along with our use of LED and light sensors, making sure that we only use electricity when people are in those parts of the building.
“From that perspective Kinnegar is gearing up to be the blueprint for what we would like to roll out across our larger format stores, north and south, over the next 2-3 years.”
Maxol is also extending and improving its sites at Edenderry and Downpatrick and has invested around €10m on capital works on the island of Ireland, including major projects in Kilkenny and Mitchelstown in Cork.
“We’ve done a major store revamp in Mitchelstown, increasing the amount of retail square footage, and we’ve also put in a new deli, a new seating area and moved it into the new Maxol shop concept. It was one of the very last three Mace stores that we had within our network in the south,” Brian says.
“We’re also putting in new underground storage, canopy and a completely new forecourt with increased car parking space, and relocating a new drive-thru car wash facility. The works are due to be finished by the end of October and we are planning to finish the works in Kinnegar, Edenderry and Downpatrick around the same time.”
As in the other projects, Maxol has acquired more land in Kilkenny, allowing it to double the size of the retail offer.
“Our site in Kilkenny will have a new deli and a new seating area, and we’re also re-laying the forecourt configuration and introducing much more car parking,” Brian says.
“It’s another busy year for us in retail and we’re now working on other planning applications where we would like to introduce more quick service restaurants with Burger King. This will bring the iconic BK brand to even more locations in the south of Ireland.
“We’re also looking at where we believe there’s opportunity to expand our instore offers by acquiring more land or by developing within the existing footprint or boundary of the land that we own at possibly another 10 locations, which we would look at developing over the next 3-5 years.”
All this innovation has taken place against a challenging backdrop which saw the industry pitchforked from the pandemic into a fuel crisis and a cost of living crisis, as well as national labour shortages.
Brian says Maxol has been very fortunate in that its key suppliers were able to maintain fuel supplies. “We had to make sure that we kept in daily contact with what was happening on the forecourt, to ensure our forward estimates were matching demand. We worked very closely with our key suppliers south and north, which was crucial” he says.
“One of the biggest challenges was trying to keep track of the volatility and the rapid upward move in wholesale prices and reflecting both upward and downward changes in the market fairly and quickly.
“On certain days there were double digit increases in the cost of product, so depending on when our retailers were receiving deliveries, that impacted very much on what their retail price could be.
“It was certainly very challenging because I don’t think we had ever seen that kind of rapid increase in daily wholesale prices. Thankfully, we didn’t have any stock issues. At times it could have become quite tight but none of our service stations ever had to restrict sales to customers.
Changing customer behaviours
“One of the interesting things that we saw during this period was a change in customer buying behaviours. Clearly the media was very much on top of what was happening, and people were trying to buy before prices moved up, and equally before the duty cuts were announced, so you would have seen a very low demand for fuel on the day when those duty cuts were due to apply, south and north.
He says poor communication by the Irish government allowed the public to believe that prices would drop at midnight after the duty cut.
“That created confusion, and it also created some bad feeling with customers, retailers and frontline staff, which was unnecessary and indeed I think it was recognised by the government that they should have handled things better.
“We didn’t have the same situation in Northern Ireland and the UK because I think the communication that was coming from government was clearer that prices wouldn’t drop immediately because retailers were going to have to sell out the higher paid stock.
“It really was all hands-on deck and it was a case of trying to manage the situation and navigate the various challenges that appeared each day – but we did it and we think we’ve got through the worst of it. Thankfully in recent weeks, energy prices on oil have been coming back and prices are certainly coming down on petrol and diesel.”
The war in Ukraine has led to a double hit on energy and commodity prices, coming on the heels of the post-Covid supply chain disruption, he says.
“Economists both in the UK and Ireland are saying recession is likely to follow towards the end of this year and the early indicators are suggesting the extent of recession is likely to be more severe in the UK than in the south of Ireland.
“It’s quite unique that we’re going into a recession with full employment, which is unheard of. This recession is being driven by the imbalance in supply and demand. So if demand starts to pull back and there is a rebalancing within supplies, it may well be a short recession, but no one is certain as to what will unfold over the next 18 to 24 months.”
With a full employment market, it’s proving difficult to attract staff into the sector and this is leading to wage inflation, he says. “In the south of Ireland we’ve got new social reform legislation coming through such as living wage, pension enrolment, statutory sick pay etc and if all of those changes are implemented at roughly the same time or over the next 12 months, that could add 9% or more to typical wage costs,” Brian warns.
“I don’t think anyone is objecting to the social reform and legislation that government wants to bring in, but it shouldn’t happen all at once and certainly not having just come out of a pandemic and straight into an energy and a cost of living crisis.
“We would hope for a bit of common sense and that legislation changes are not all applied at one time to try to keep wage costs at a manageable and appropriate level to maintain business viability if nothing else.”
As a frontline service, retailers have worked hard during some very difficult times, Brian says.
“It would just be nice to get back into a much more normal trading environment but we don’t see that happening, effectively for the next 18-24 months.
Building the future
“We’re 102 years old this year and we’re in the middle of reworking and signing off our new strategic plan which will take us up to 2027, it’s based on building on the good foundations of what we’ve already put in place.
“We want to continue to look after our independent retailers, we want to look after our people in head office and we want to support our suppliers who have been good to us because it works both ways.
“That’s what we’re looking forward to; continuing to build upon the good things that we’ve already put in place while supporting all of our business partners that have supported us over the last three turbulent years, which have been some of the most challenging in our long history.
“But we have continued to both invest and innovate during this time, a highlight of which included the launch of our first Loyalty App. This, together with our new flagship EV hub, new sites and ongoing developments right across our network, mean that there is a lot to look forward to for Maxol and all of our partners.”
To read the full feature in the latest issue of IFCR, click HERE.