Garage market trends

Car mechanic using a laptop as a OBD2 scanner tool(last updated July 2019)

What has been happening in the petrol retailing sector

Important developments in the last two decades include:

  • a significant decline in the overall number of petrol filling stations, particularly small independent outlets in rural locations
  • an increase in the size of company owned sites
  • an increase in the number of supermarket sites - as well as a big increase in their market share
  • an increase in average filling station throughput (that is, the number of litres sold every year) until 2007. After that, throughput fell for a number of reasons such as cars becoming more fuel efficient and the recent economic downturn which saw many people cut out unnecessary journeys to reduce their spending on fuel. Low fuel prices and more cars on the road did see throughput increasing modestly during the mid 2010s
  • diesel becoming much more popular than petrol but then motorists turning away from diesel cars in the mid and later 2010s because of concerns over toxic emissions
  • fierce fuel price wars
  • a move to diversify into other areas such as the sale of convenience lines, alcoholic drinks, take-away foods and so on as fuel sales have fallen and the profit margins on fuel have been squeezed
  • increased regulation
  • significant increases in the retail price of fuel for much of the early 2010s followed by a rapid fall in forecourt prices during the second half of 2014. Prices remained at a lower level throughout 2015, 2016 and 2017 before moving up again in 2018
  • pressure on motorists to reduce car usage and to use public transport
  • an increase in take-up of alternatively fuelled vehicles (AFVs) - for example, hybrid and all-electric cars

There have been very many casualties in the petrol retailing sector as a result of intense competition and very low margins on fuel sales - smaller sites in particular have found it very hard to survive. In the past the main competitors for a small independent petrol filling station were the large oil company owned sites and the supermarkets. During the mid 2010s the oil companies sold off many of their sites and these were bought up by the new 'indie' petrol filling station chains like MFG and Euro Garages. These have teamed up with companies like Starbucks, Subway and Greggs and are succeeding in growing their market share - again at the expense of the small single outlet site.

You will have to decide whether:

  • demand will be high enough in your area to support your business. If your garage is in a rural area there simply may not be enough customers unless you can benefit from a seasonal influx of holiday makers
  • you can compete against large petrol filling stations and supermarkets which will be able to undercut you on price
  • you will be able to provide the high standard of service and amenities that the modern consumer looks for

Keeping up to date with developments

Joining a trade association is an excellent way of keeping up to date with developments in your industry.

Petrol retailers in the UK are represented by the Petrol Retailers Association (PRA), part of the Retail Motor Industry Federation (RMI). Visit the PRA section of the RMI website for more information.

The Energy Institute produces a wide range of material that's relevant to the industry, much of which is available on the Institute's website.

The Association of Convenience Stores (ACS) represents convenience stores wherever they are located. The ACS website contains a great deal of material of interest to everyone operating in this market.

Subscribing to a trade journal is another excellent way of staying up to date. Forecourt Trader journal contains a wide range of articles of interest to petrol filling station businesses, including the annual Fuel Market Review. You can read many articles online.

Trade shows

You can get a lot of useful information by visiting a trade show for the petrol filling station sector. Visit the Forecourt Show website for details of exhibitors.

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