Last year, Circle K acquired 10 Griffin Group convenience stores across Dublin, most of which were in coveted city centre locations. It was an unexpected step onto the High Street for the forecourt giant which is well known globally for its fuel and convenience store.

But senior director of retail operations for dealer & franchise Derek Nolan insists the company is in no danger of forgetting its roots, despite its continued interest in the High Street and rules out a similar move in Northern Ireland any time soon.

“This is an important and exciting development with Circle K, but it’s important to note that we remain hugely committed to fuel retailing and our network of service stations throughout the island of Ireland,” he tells NR.

Fast growth

Derek’s own area of the business – the dealer and franchise network – is growing quickly, with 243 sites across the island of Ireland where he works directly with independent retail partners.

“We’ve brought 15 new sites to the dealer network over the last 15 months. Our dealer partners look to the Circle K model as to what the future is going to look like, and an example of that would be around electrification and fuel quality,” Derek says.

“We have more than 14,000 stations globally and that gives us a good sound basis of understanding of the current market and what the future looks like.

“We currently have 49 dealer partners in Northern Ireland and we grew it by eight dealer partners last year. We’ve already seen another new site join since May, so watch this space because Northern Ireland is still a big area of opportunity for us.

Recent highlights

“One big highlight recently was the Musgrave Marketplace deal which was a big opportunity for us – it was a big statement for Circle K in Northern Ireland that we went from five Musgrave sites to now 12 overnight.

“Musgrave are investing in a high number of these sites and we’re excited to be part of the big renovation at the site in Portstewart.

“Our dealer partners are looking for the same things in Northern Ireland and the Republic – they’re looking for innovation. they’re looking for certainty of product. Fuel quality is a big part of our offer and that’s what Circle K brings.”

Derek has been in retail ever since leaving school – yet there can’t be many in the forecourt industry whose resume can boast numerous encounters with A-list celebrities, including Tom Cruise and Mark Wahlberg.

Starting as a 16-year-old at Quinnsworth, he moved up the ranks to become head of the retail support office at Tesco before becoming retail director across Odeon Cinema’s 123 sites in the UK and Ireland.

Transition phase

Six years ago, Derek made the leap to what was then Topaz.

“I joined just after the acquisition when they were transitioning from Topaz to Circle K and they wanted to bring the global brand into Ireland – so that was a massive attraction.

“It was all around major transition and being able to bring a new way of working into the company – who wouldn’t want to be part of 420 sites rebranding?

“The core part of my role now is setting a clear strategic map of where we want to grow as a channel, but the area I most enjoy is getting out with the team and speaking with our customers and seeing the team achieve its short and long term goals.”

One of Circle K’s key strengths is that it’s a globally recognised brand with a well-established record of delivering excellence, Derek says.

Global experience

“The key part for us is that we’re able to bring that global experience and insight into an existing local market,” he says.

“In Circle K everything comes back to making our customers’ lives easier every day, so we need to adapt to meet their needs, to deliver products and services and show leadership in areas such as electrification and sustainability

“We have led the way in developing next generation fuel, gourmet coffee and a wide range of high quality food options and across the island of Ireland we are the largest and most advanced network of service stations with longstanding ties to communities across Ireland.”

Circle K has evolved from a fuel retailer that sold convenience to a retailer that sells fuel.

Listening to customers

“We’ve really led the way in developing high quality fresh food on the go, but we pride ourselves on listening to the customers. Customers’ behaviours have changed and will change and we’re adapting to what those tastes and changes are into the future,” Derek says.

“I think a key area where we are leading is around technology and frictionless – we’re looking at what technology is needed, whether that’s to eliminate queueing at the front of the shop or just making life easier for the customer on the forecourt.

“We will be introducing mobile pay in the future – we already have Pay at Wash, so where we have wash machines you have the ability to pay without getting out of your car, for example – and that’s something we’ve just introduced this year.

Net zero

Circle K also prides itself on its leadership in sustainability and the net zero transition, offering the largest EV charging network in Ireland.

“We’re progressing on the introduction of E10 – that will go live in Northern Ireland in November,” Derek says.

“It’s likely that all fuel pumps will eventually be replaced by EV chargers at the front of the store, but it’s not going to happen overnight.

“We know that the forecourt of today is not the forecourt of tomorrow, and we are already leading the evolution in terms of extent of EV and alternative fuel capabilities across our network. I know we’re going to be seen as the leader in the market on this.

“We know we need to transition away from fuel products, but it’s not a case of just flipping a switch overnight. The country still relies on petrol and diesel to keep people moving – for example, delivery vehicles, bus fleets and ambulances – but EV is a core part of the future.

Moving forwards

“There are ways to make petrol and diesel products more environmentally friendly in the interim, so the introduction of E10 will have a significant impact and also we’ve got HPO for diesel and it can also have an impact in the short term.

“We’ve the most advanced EV network through our strategic partnerships with ESB, Ionity and Tesla, but the single biggest leverage that Circle K has to any of our competitors is our Norway market, where we know EVs outsell the traditional combustible engine car at the moment.

“So we’re able to use that information and will be using that information as to how we transition in Ireland. Norway are years ahead of the transition to Ireland and we’re one of the biggest EV charging networks in Norway, so that can only support how we’re going to bring it into the island of Ireland.”

While Covid had an impact on business, Circle K adapted quite well, Derek says.

Adapting to Covid

“We saw that our larger motorway sites were more challenged. But where we have residential sites – and we certainly have a lot of them in Northern Ireland – we would have seen them perform quite well through the Covid period from a residential point of view because customers’ behaviours had changed significantly during that period as they were using more of the local shops.

“We’re seeing customers reverse back out of that, not all the way but I would say customers’ behaviours have adapted back to more normal ways of doing things. But we still see challenges with commuters who are not fully back into the office and we see that in Moira, Carrickfergus, Ballymoney. We have seen it vastly improve but we haven’t seen it fully recover to pre Covid times, that’s the reality – there’s more hybrid working out there.

“But we’ve recovered, and we’re back in normal times as such.”

Fuel supply

The biggest challenge at the moment is certainty of product when it comes to fuel supply, in the wake of the Russian invasion of Ukraine, but here again Circle K is at an advantage due to its global operation, Derek says.

“Circle K has a global reach and a global footprint and we have the ability to manage through this crisis, so being part of the Circle K global network is going to give reassurance to our local dealers – they’re talking to me, but they’re also talking to a business that has 14,000 sites, both in America and across Europe,” he says.

“Russia was only a small part of our global sourcing of fuel, so as a global company we were not reliant on Russia and would have looked to increase our supply of fuel coming from other parts of the world, whether that was America, the refineries in the UK or other parts of the world.

“But there remains a high level of volatility within the global market and this is driven by stronger fuel demand post Covid and the realignment of fuel sourcing following the Russian invasion of Ukraine. So as a result we are likely to see a continuation of fuel price fluctuations in the future wholesale market.

Volatility

“It’s important to point out that this volatility is something we’ve never experienced, and it’s twofold – it’s the post Covid recovery and it’s the Russian invasion – and the other point is there are further sanctions on Russian energy supply coming into effect in January 2023 so we are likely to see even further volatility.

“But it’s not just fuel prices, it’s everything, it’s the cost of living as a whole that has really suffered. We will see consumer spend contract – that’s going to be obvious – but fuel is not sitting out there on its own.”

Derek says his wish list for the future centres on growth, innovation and making things easier for the customers.

And his priority is to continue listening to Circle K’s independent dealer partners: “They’re in the local communities, and as Circle K we have to work with and listen to them.

“That’s what keeps us relevant and consistent, and keeps us able to adapt for the future.

Adapting to change

“There’s no doubt we’re going to be going through the single biggest transition period of our industry over the next number of years.

“But calling out the importance of our dealer partners is massive for me. They’re not shy about giving you information about what’s working and what’s not working and it’s important we listen to that. We’re lucky to have that.

“When you’re company owned, you can be very focused internally, whereas when you’re working with dealer partners it gives you a great insight into what’s happening in the local markets.”

To read the full feature in Neighbourhood Retailer, click HERE.

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The company that owns brands such as Marmite, PG Tips and Dove says it has already taken “appropriate pricing action” which will continue across its global operations and within each of its product divisions.

The company reported a 2.5% rise in sales for the third quarter of 2021. Growth was supported by a 4.1% increase in prices while the volume of goods sold fell by 1.5%.

The UK consumer prices index (CPI) measure of inflation slowed to 3.1% in the year to September, according to the Office for National Statistics. However, inflation is expected to accelerate in the coming months due to a rise in energy costs and continuing disruption to UK and global supply chains.

Unilever’s chief financial officer Graeme Pitkethly said: “We expect inflation to be higher next year than this year.”

Unilever sells to businesses such as retailers, supermarkets and wholesalers who will be considering whether or not to pass on higher costs to shoppers.

But Danni Hewson, financial analyst at AJ Bell, said Unilever was facing a “balancing act of not increasing prices so much that its products are no longer competitive”.

“It is a real test of the strength of the company’s brands,” she said. “After all, will we really stick with branded soap at a materially higher price when there’s an unbranded alternative sitting next to it on the shelf which is an order of magnitude cheaper?

“If enough consumers decide they can put up with a cheaper alternative then it would become a big problem for Unilever.”

Unilever’s brands include Simple skin care, Sure deodorant and Vaseline. It also produces Ben & Jerry’s ice cream, Cornetto, Hellmann’s mayonnaise and Knorr stocks.

Earlier this week, the boss of the Food & Drink Federation warned that the hospitality industry, which includes restaurants and pubs, was seeing “terrifying” price inflation of between 14% and 18%.

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