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Call to curb ‘supermarket squeeze’ on independent petrol retailers

By Western Morning News  |  Posted: January 06, 2014

  • Alan Bate at Darcroft Garage

Comments (5)

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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  • nickthompson  |  January 06 2014, 11:43AM

    Did not the great Lady Thatcher tell us that competition is good for us, she said "compete or 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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  • josdave  |  January 06 2014, 11:21AM

    Judging by the red arrows there are a few short sighted supermarket supporters out there. While it is true that when the lawyers get involved the councils give in as they can't afford to contest it the supermarkets are still getting away with bullying any opponents into submission and that should not be allowed to continue. A future with nothing but a choice of which supermarket to use is a very bleak outlook indeed.

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  • simonrtucker  |  January 06 2014, 10:56AM

    It is very difficult for councils to turn down large supermarkets. Tesco are well known for embroiling councils in long and expensive litigation, which the council cannot justify in cost terms, and so they give in. The only thing that will change this is to shop local and ignore the supermarkets, unfortunately very few people have the resolve to keep that up for an extended period and certainly not enough will have that resolve.

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  • Gurnards_Head  |  January 06 2014, 10:33AM

    Independent filling stations are a lost cause, the fuel market is rigged in such a way that it is now impossible for them to compete on a level playing field such is the power of the supermarkets who are now posing a serious threat to major oil company owned branded sites. To add insult to injury fuel is used deliberately as a loss leader to attract custom, it is very easy to sell fuel at a 10ppl loss when the average car will at best generally take no more than 50 litres when in store prices are loaded on selected goods to more than make up for the loss on fuel. The really interesting thing being that where there is little or no competition supermarket fuel prices are normal but punters have been brainwashed into believing that everything involving supermarkets pricing is cheap. Meanwhile in Penzance there is a bitter fight to the death as three greedy supermarkets in less than a quarter of a mile are locked in a downward spiral of fuel prices in a dramatic situation of oversupply to prove who is top dog so customers had better make the most of it while they can. They are greedy and immoral lacking transparency but perfectly legal while battling it out for customers money, customers get the facilities they deserve and most are happy to be duped so nothing will change.

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  • josdave  |  January 06 2014, 9:42AM

    It's not just the petrol stations hundreds of independent traders are going bust every year because of the unfair, though unfortunately legal, trading practices of the supermarkets. There are far too many of them and yet councils up and down the country give them planning permission whenever they ask for it while at the same time bemoaning the decline of their town/city centres.

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