petrol station

Why obituaries for the petrol station are premature 

Why obituaries for the petrol station are premature 

Stopping to refuel your vehicle has been a part of life for so long that few pay much attention to the process, apart from perhaps noticing the decline in recent years in the number of locations where it’s possible. 

Petrol filling station numbers in the UK peaked at around 40,000 sites in the 1950s, but have declined steadily since, with around 13,000 left in 2000 and only around 8400 in 2020, according to data from Experian and the Petrol Retailers Association (PRA). 

There are many reasons for the drop, including greater fuel efficiency of modern cars, but it’s certainly not the UK turning away from the car. Government data shows there are currently around 33m cars registered in the UK, an all-time high and an increase of 49% over the last 25 years.  

Supermarkets to the forecourt

Smaller rural and suburban stations have been closing, to be replaced by larger stations owned by the supermarkets, which have cornered around 46% of the market as a result of an aggressive pricing strategy undercutting smaller independents in the market. 

The mention of stores in combination with petrol stations brings to light another interesting factor in the development and future of the petrol station market – the fact that the petrol itself, surprisingly, is often not the chief source of income for the stations. 

Oil giant BP claimsthat 50% of customers visiting their petrol stations don’t buy petrol, but rather take advantage of the far-sighted decision for BP to join forces with M&S in 2006, with forecourts now operated as hybrid fuel stops and convenience stores.  

This shows the future of the sector, with only 796 of the total 8400 forecourts in 2018 reported they were trading without having a store or kiosk. The available services have been growing steadily too, now including the likes of Amazon pick-up centres, chemists, dog wash facilities and even dry cleaning.    

Green agenda to have an impact

Another jigsaw piece needed to create a full picture of the possible future of the petrol station is the green agenda, which has already prompted the UK government to ban the sale of fossil fuel cars from 2035 and is allied to the rise of electric vehicles. 

By the end of May 2020 there were 128,500 purely electric cars on the road in the UK and 315,200 plug in hybrid models. According to the Society of Motor Manufacturers and Traders (SMMT), electric vehicles of all types, including hybrids, now represent 10% of all new vehicle registrations.   

Ignoring for now, the case for hydrogen fuel cell vehicles, the future appears very much electric. According to forecasts UK electric vehicle sales will rise from 3.4% of all vehicles sold in 2019 to 5.5% in 2020 and by 2026 electric vehicle sales will account for a fifth of UK sales. 

Given the still relatively limited range of smaller electric vehicles, typically between 100 and 150 miles per charge, the growth in electric vehicles will require a significant increase in the number of charging points spread across the UK. 

Despite disingenuous claims that seek to compare 9,300 electric charging points with 8,400 petrol stations, which typically feature multiple pumps and far shorter refuel times, the future offers petrol stations the opportunity to broaden their appeal, expand their services and boost their profits. 

With the average 80% charge taking 30 minutes, petrol stations will be ideally placed to offer drivers an environment in which they can shop, enjoy some food and drink, rest and take advantage of fast Wi-Fi while waiting for a charger to become free or to charge their vehicle. 

The recent UK-wide lockdown has also played its part in securing the future of those petrol stations that include convenience stores, with many shoppers recognising they are safer than the larger supermarkets, with so many people in close proximity. 

The numbers may be at an all-time low, but expect to see new smaller suburban services springing up in the years ahead as developers recognise the value of fully-equipped sites that offer far more than a simple petrol fill-up and a packet of gum for the journey. 

If you have a development you would like to discuss with an experience real estate lawyer who understands the forecourt market in particular, please get in touch with Karen Mason, here at Newmanor Law on +44 (0)20 7464 4081 or email karen.mason@newmanor.com