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The latest figures for the fuel giant showed a profit before exceptional items of €17.1M for 2020, a not-unexpected fall of 7.5% on 2019 given the Covid-19 impact on trading conditions that included 5km travel limits and rolling lockdowns, he revealed in an update this morning.

Despite the challenging conditions that prevailed between January and May 2021, including Brexit and lockdowns, the outlook for the full year 2021 is positive and is set to outperform 2020, Brian Donaldson said.

“There are a number of factors that have contributed to the strong company performance since May, but we have pinpointed one that has probably had the most positive impact on our business. The significant rise in staycations provided not only the tourism sector with a bounce, but the forecourt and convenience sector has also been a beneficiary,” he said.

“Not only were consumers visiting our forecourts for fuel, but the Maxol network proved a convenient pit stop for snacks, confectionery and deli items and we anticipate that this trend will continue for the coming months.”

Maxol also announced a €20M investment in the business for 2022 across multiple sites including Sandyford, Castletroy, Kilkenny, Clarecastle and Donore Road in the Republic of Ireland.

2021 investment programme

While the impact of Covid-19 saw a number of development and refurbishment programmes delayed, Maxol continued to invest in the business.

A €7M investment programme in 2021 included the refurbishment of two key sites in Ballycoolin  in Dublin and Riverside in Navan in Meath.

The multi-million Euro investment programme, which extended to a number of sites across the country, also saw the introduction of drive-thru Burger Kings, new indoor seating areas, extended outdoor seating areas, additional car parking spaces, car wash upgrades, the creation of more retail space, larger Maxol deli counters and the introduction of  Premium fuel pumps to additional sites as part of Maxol’s carbon neutral programme, which sees 100% carbon emissions off-set on Premium fuel purchases.  Since 2012, Maxol has invested over €230M in its network.

“Our investment programme was an important undertaking not only in terms of alignment to our growth strategy, but because we have a strong sense of purpose that includes recognising the role we can play in helping to rebuild local economies,” Mr Donaldson said.

“Maxol isn’t just a national brand, it’s a local brand. Our sites are run by local people, employing local people, serving local people.  This model has served us well for more than 100 years and its vigour was tested, and resilience proven during the past 20 months.”

Robust model

While people moved in their droves to shop online during the height of the pandemic, an increase in ecommerce doesn’t mean that high street or convenience stores will become obsolete, he said.

“There are many advantages to online shopping and indeed, a move to online kept many Irish businesses afloat when their doors were shut.  But consumers have not abandoned what they see as a more experiential, personal way to shop that isn’t purely transactional,” he said.

People are sociable beings by nature and our network model, and the importance we place on our food service, stood up to the test of significant behavioural change during Covid-19.”

Over the past five years, Maxol has been transitioning from its position as a fuel brand selling food and grocery to a convenience food service brand that also sells fuel, along with other energies for mobility.

“If anything, the Covid-19 crisis proved the robustness of our evolving business model,” Mr Donaldson said.

“While fuel sales dropped by up to 70% during the first week of lockdown, sales of food and grocery remained strong.  Many people didn’t want to shop in large, busier stores so their local Maxol became the go-to for their everyday essentials.”

The Maxol Group is investing in more eat-in areas in forecourts where there is space to expand and the aim is to become a destination for friends and families looking to catch up over a cup of coffee, a hot meal or a freshly prepared lunch from the deli.

“We are growing our food offering all of the time and are gearing up for the launch of our third drive-thru Burger King at Ballycoolin in Dublin, together with our first Apache Pizza outlet in Donabate, Co. Dublin,” Mr Donaldson said.

Maxol is partnering with another Irish family business, OKR Group, on these well-known food franchise brands, responding to the growing demand for hot, freshly prepared food at mealtimes. This will be Maxol’s first foray into home delivery with Apache Pizza, which will offer customers greater choice and convenience from local, family providers.

Local and loyal

Maxol revealed that 65% of the company’s bakery and deli goods are sourced from local producers including scones from O’Keeffe’s Bakery in Cork; apple turnovers from the family-owned Golden Bake company in Dublin; muffins from Milish Foods in Dublin and traybakes from Coolhill Farm in Wexford.  Using Irish milk and cream, family-owned Silver Pail in Cork supply Maxol with its new ice-cream brand, N’ice Cream.

Freshly brewed coffee is a key driver of customer loyalty and Maxol’s exclusive ROSA coffee brand is expected to hit €9M in sales this year, the most popular variant being a 12oz Americano.

Minerals, the biggest selling category product in Maxol service stations account for 22% of total shop sales, followed by confectionery (22%) and dairy (13.5%).

Car wash

More than 600,000 vehicles will pass through a Maxol car wash this year, with 36% of all car washes taking place at the weekend.

While volumes were hit during the January – March lockdown period, Brian Donaldson says that the car wash facility is a critical part of the Maxol offering that will endure long after the demise of internal combustion engine vehicles.

“A staple of the forecourt model, which is an often overlooked and undervalued jewel in the crown, is the car wash facility.  As we transition to alternative fuelled vehicles, we can’t forget that they too will need to be washed. And, by making our car wash more environmentally friendly, using recycled rainwater wherever possible, we are future proofing a key, sustainable service offering that is really important to our business,” he said.

Maxol invested €600K in rebranding and upgrading Maxol car wash facilities in 2021.

Carbon footprint 

Maxol says it is also looking to reduce its environmental footprint and support customers in making more sustainable choices.

It was one of the first retailers to offer 100% compostable cups and lids, discounts are provided to customers who use a reusable cup when purchasing hot drinks, and the company has been installing compostable and recyclable bins across its service stations to support customers’ recycling efforts.

The company recently marked the first full year of its carbon offsetting programme that aims to offset 100% of carbon emissions with its Premium fuel range, which has fewer pollutants and is now available at 40 Maxol sites.

Tree planting

The programme also supports a number of green initiatives such as the planting of 10,000 trees in Ireland, local community projects and global projects designed to off set carbon emissions.

“The Maxol Group is very transparent and also very serious about its commitment to the environment and investing in ways to reduce our carbon footprint,” Mr Donaldson said.

“We do not pretend to be something that we are not.  We sell diesel and we sell petrol and will continue to do so as long as these fuels are needed.   There’s no silver bullet that will suddenly transform the automotive market overnight, but we are looking at all of the ways that our business can change and make better, greener choices.

“Every investment and every decision begins with an examination of the impact it will have on the environment; we take a ‘sustainable first’ approach to every operational decision.

“We are working with KPMG on a programme that will allow us to better benchmark and measure our carbon savings year-on-year and that is an important step in our sustainable journey.”

Twelve new dealer sites were added to the Maxol network during 2021, bringing the total number of Maxol service stations around Ireland to 242.  More than 80 people are employed directly and more than 1,000 indirectly by The Maxol Group across the island of Ireland.

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There are now around 2,500 drive-thrus across the UK and fast-food chains are expected to open around 200 new locations before the end of the year – with many sites already earmarked in Northern Ireland.

Canadian coffee chain Tim Hortons, which already has a number of sites in Northern Ireland, plans to open at least 25 drive-thrus here in a two-year period – proof not only of the Canadian firm’s ambitions but also the growing trend for ordering food and drinks from our cars.

Much of that has been put down to the coronavirus pandemic and market researcher NPD revealed that visits to existing sites in the year to April 2021 were up by 40 million.

A ‘bunfight’ for new locations has seen suitable sites selling for £200,000 a pop, according to This Is Money, and from September to November 2020 there were 121 million visits to Britain’s 2,000 quick service restaurants (QSR) that offer drive-thru – a 14% increase on the same period last year, with spend up 45% to £723m.

Tim Hortons, which was first brought to the UK in 2017, has drive-thru offerings at half its 30-plus sites and the chains’ chief commercial officer in the UK, Kevin Hydes, said they were doing particularly well.

‘Exceptional performance’

He explained: “Despite challenging times for the sector, our drive-thru and flagship locations have delivered exceptional performance and our model is proving to be well attuned to the evolving needs of customers at this time.

“We’ve seen significant growth in drive-through lanes, and as restrictions have eased, that growth has remained.”

And more QSR chains are opening drive-thrus every day including Subway, Taco Bell and Krispy Kreme.

Among those joining the revolution in the months ahead are two huge American chains in the shape of fried chicken chain Popeyes and home of the square burger patty Wendy’s.

Wendy’s, which reported in March 2020 that drive-thru sales accounted for 90% of its US business as lockdowns bit, is returning to the UK after 20 years, hoping to steal a slice of a marketplace dominated by McDonald’s and Burger King.

In May it unveiled plans to open up to 400 outlets, creating at least 12,000 jobs – with drive thru certain to figure largely in its plans.

To read the full feature on the Price of the Protocol make sure to open the upcoming edition of Neighbourhood Retailer

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