Navigating Challenges in the Forecourt Industry: Rising Costs, Policy Changes, and Crime

The forecourt industry in the UK is currently navigating through a turbulent period marked by escalating operational costs, significant policy changes, and an increase in crime. These challenges have a profound impact on family-run businesses, which form the backbone of this sector.

Rising Costs and Changes in National Insurance and National Living Wage

The recent changes in National Insurance (NI) rates and the National Living Wage (NLW) are putting additional financial pressure on forecourt operators. The increase in NI contributions, alongside the rise in NLW, means businesses must now manage higher payroll expenses. In response to these economic pressures, many forecourt owners are turning to innovative solutions. Investing in car washing machinery, particularly standalone jet washes has become a popular strategy to bolster profits during these tough times in fuel and food retailing. Moreover, the installation of solar panels at many forecourts is proving to be a forward-thinking move to slash energy bills, thereby offering some relief from the rising operational costs .

Business Property Relief and Inheritance Tax

One of the significant fiscal concerns for family-run forecourt businesses is the Business Property Relief on Inheritance Tax. The potential changes could drastically affect investment capabilities: Family forecourt outlets might need to reconsider their investment strategies to accommodate this new financial burden.

There’s a risk that some filling stations might be sold off, while others might lack the funds to continue operations, potentially leading to closures. The reduction in the number of filling stations could have detrimental effects on both the economy and the UK’s energy resilience. Consequently, the Petrol Retailers Association (PRA) has actively encouraged its members to engage directly with political figures, including Prime Minister Keir Starmer, and local MPs, urging a policy review. The PRA has provided a template letter to simplify this communication, highlighting the dire consequences of these changes on family businesses. In addition, the PRA is working with Family Business UK who have garnered together over 30 other trade associations to lobby for a policy reversal .

Combatting Crime in Forecourts

Crime, particularly fuel theft and in-store incidents, has become a significant cost, with an estimated annual impact exceeding £2 billion according to the most recent report from the Confederation of British Industry British Retail Consortium. In response, PRA members are adopting advanced technologies like body cams, facial recognition cameras and headsets to deter and manage crime more effectively. The PRA is also actively participating in a review of the Retail Crime Strategic Plan to provide minimum standards and improvements across the  Reporting of Crime, Reporting of Intelligence and Dealing with Vulnerable persons. When managing matters of crime or incidents concerning fuel theft, following discussions with former Secretary of State for Transport, Rt Hon Mark Harper and subsequent advice from the Home Office, companies that provide a service to recover monies associated with drive offs and no means to pay will soon have online access to the DVLA database, provided they meet certain criteria outlined by the Police. This improvement should streamline the process of recovering losses from fuel theft, with implementation expected in Q1.

The 2030 ICE Ban and Charging Infrastructure

While the PRA supports the move towards decarbonization of transport, there’s a strong call for a strategic, cooperative approach between the government and industry. The current inheritance tax changes could limit the available funds for family businesses to invest in essential EV charging infrastructure, which, although viable with a payback period of 8-10 years, requires significant upfront investment.

Advocacy for Car Wash Licensing

The PRAs’ sister not-for-profit trade association, the Car Wash Association ( CWA) is pushing for a national licensing scheme for car washes to ensure quality and fairness in the industry. Collaborations with Nottingham Trent University (NTU) are underway, with NTU preparing to submit proposals for a national licensing scheme. Additionally, the CWA will be participating in webinars with LabourList to discuss these proposals, emphasizing the need for regulation to protect both consumers and legitimate businesses.

Conclusion

The forecourt industry stands at a crossroads, facing a complex array of challenges that require thoughtful policy responses, community engagement and innovative business practices. The survival and growth of family-run forecourt businesses hinges on how well they can adapt to these changes while advocating for a supportive legislative environment. The concerted efforts in lobbying, investment in technology and strategic business planning are pivotal in ensuring that these businesses not only survive but thrive in the evolving economic landscape.

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There will be over 25 exhibitors and several presenters including an important update from the PRA on the Governments consultation on “Igniting competition in the UK Road Fuel Market”. This will affect all fuel retailers including those in Northern Ireland and you will come away with better knowledge of this issue. In addition to this there is free parking, free lunch and refreshments. The event is open to all fuel retailers and Industry Operators in Northern Ireland and is free to attend.

The PRA has been active on its members behalf, and it has been a very busy first quarter of the year with a lot of effort and time devoted to responding back to the Governments consultation into the Road Fuel Sector.

Gordon Balmer Executive Director of the PRA/CWA said, “I have met with as many members as possible to garner their views on this upcoming legislation affecting our industry. In addition, I was also able to facilitate a face-to-face meeting between officials from the Department for Energy Security and Net Zero and our Executive committee. This provided the Government with an opportunity to hear concerns from retailers direct and I hope that the effort we have put into this important issue will pay off and that the Government listens to us” , Gordon added.

Register here

Events | PRA (ukpra.co.uk)

Don’t Miss the PRA Roadshow on 23^rd May

You can register online 0 it’s open to all, and is free.

• Learn about current affairs affecting our industry
• Hear presentations from a diverse range of companies presenting products and services which will improve your business
• Network with colleagues and industry representatives
• Enjoy a free coffee and buffet lunch
• New and interesting venues for the Forums – all with plenty of FREE parking and easy road access.
• These events are free to attend for members and non-members.
• To encourage attendance members who are located in a 50-mile radius of the venue will receive an emailed invitation, please don’t forget to check your junk mail to ensure you don’t miss-out. We will also phone to remind you.
• If members wish to invite PFS operators who are non-members they are welcome.
• Registration for the event is available on-line
• Roadshows

Established for over 20 years, The Forecourt Roadshows are a series of 5 one-day regional exhibitions, designed and specified for everybody involved in petrol retailing in the UK. PRA makes it easy for suppliers to meet top quality buyers around the UK including:

• Independent dealers
• Group operators
• Oil companies
• Contractors
• Consultants
• Petroleum Officers

“We invite all potential visitors – they are made to feel very welcome with free entry, lunch and refreshments. These local forums are far more conducive to personal contact with buyers than larger less ‘intimate’ venues. Exhibitors actually get time to talk to customers and demonstrate products” said PRA Chief Executive Gordon Balmer.

Depending on the product or service you may also be required to take a stand at these events.

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“Petrol and diesel prices remain volatile as retailers strive to remain competitive amidst rising costs and declining fuel sales“ said Gordon Balmer, Executive Director of the Petrol Retailers Association (PRA), commenting on the RAC’s monthly report of fuel prices.

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Gordon Balmer, Executive Director of the Petrol Retailers Association, said:

“Independent retailers continue to price competitively in a dynamic market, striving to offer fair and competitive prices to consumers, fully recognising the importance of delivering value, especially in the face of today’s challenges.

The PRA has offered its full support and cooperation to the Competition and Markets Authority (CMA) as it develops its fuel price transparency scheme to create a pricing environment that is more transparent and consumer-friendly.

Our members are small businesses that have worked hard to keep their communities fuelled and fed during unprecedented times. Many independent forecourts actively undercut supermarkets, showcasing the dynamic nature of the market.”

Balmer concluded:

“In the face of ongoing market volatility, our retailers are dedicated to ensuring their customers receive the best deals possible. I encourage motorists to make use of all the resources available to find the best deals possible.”

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Gordon Balmer, Executive Director of the Petrol Retailers Association (PRA) said:

“The prices of petrol and diesel have continued to rise throughout September, driven by Saudi Arabias’ decision to extend its crude oil production cut until the end of the year and the weakening of Sterling against the US Dollar. 

The PRA represents independent fuel retailers, which accounts for 64% of all forecourts (in the UK), many of which are small family run businesses. Contrary to claims made by the RAC, our members are not unjustifiably pricing petrol higher than needed. Fuel margins have been under pressure due to increased operational costs that our members have had to bear. To address rising labour expenses, energy costs, and the highest inflation rates in recent years and reduced fuel sales, margins have inevitably increased. Attempting to whip up public anger by suggesting otherwise is deeply irresponsible.

“It is disappointing to read such sensational claims in the media regarding fuel margins. I have consistently reached out to commentators, seeking a rational discussion on this matter. Unfortunately, my requests appear to have gone unanswered. The PRA remains committed to advocate for our members and promote transparency within the sector. We are willing to engage with any mediator to facilitate a constructive and informed dialogue on these critical issues.”

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