This year we have seen the continued conflict in Ukraine with its effect on food and energy prices, a new Labour government shaking up the economy with increases in taxes and business rates, the continued humanitarian crisis in Gaza and the US Presential election.

In the Spring Budget, the fuel industry was delighted to see the fuel duty freeze from last year continued, however retailers’ operating costs continued on their upward trajectory with increases to the National Living Wage and Business Rates now set at an all-time high of 54p in the £.

During April, tensions in the Middle East rose as Iran launched missile strikes against Israel, raising the Brent crude oil prices to raise to $90.45. The Prime Minister Rushi Sunak also called for a general election.

Following the general election in July, Labour were voted in and announced new bills addressing Water, Employment Rights and the Great British Energy Bill, with the CWA welcoming the potential of a national licensing scheme with enforcement powers to address the issues of non-compliant Hand Car Washes.

September marked the historic occasion that the UK became the first G7 country to phase out coal power for electric generation, after 142 years of using the energy source. During this time, petrol prices fell to their lowest level in three years, with the average price for a litre of unleaded costing about £1.35.

Ed Milliband, Secretary of State for Energy Security and Net Zero, wrote to the PRA confirming that a “Fuel Finder” scheme designed to improve fuel price transparency for motorist would be implemented in 2025 and a “Market Monitor” scheme.

In the Autumn Budget, Chancellor Rachel Reeves revealed an increase of £40bn in tax rises, intended to offset a £22bn “black hole” in the nation’s finances. The PRA welcomed the continued freeze in fuel duty, however the increase to National Insurance and the National Living Wage will impose further costs increases on retailers.

The PRA wrote to the Chancellor expressing its concerns and mentioned the effect the withdrawal of the Business Property Relief will have on family-run businesses. The latest data reveals that the UK economy is showing minimal growth and employers are warning of the affect the budget will have on their businesses.

We also saw a marked slowing of EV car sales and discussions between the government and car manufactures over the ZEV Mandate. Unfortunately, this came too late for the workers at the Luton plant owned by Stellantis who announced its closure. They cited the ZEV mandate as a direct cause of this. It therefore remains to be seen how the government will handle this as we push towards the ban of the sale of ICE vehicles in 2030.

Looking ahead to the New Year, on the global front, next year will be challenging one with President Trump assuming office, and the uncertainty over trade tariffs, a slowing global economy, and wars in Ukraine and the Middle East still to be resolved.

Concerning the UK economy, Goldman Sachs expects continued growth, although its expansion may be slower than some economists anticipate. They forecast the UK’s GDP to increase by 1.2% in 2025, which is slower than the Bank of England’s projection of 1.5%.

Concerning interest rates, some analysts predict that the Bank of England will stop reducing interest rates at 4%, however, Goldman Sachs believes they will continue cutting as far as 3.25%.

Next year will also see the effects of the Chancellor’s Autumn Budget start to bite, with increasing costs impacting retailers. Actions to counter this could include a slowdown on recruitment, some job losses, and initiatives to automate such as self-scanning tills or adapting some sites to become unmanned forecourts.

The introduction of the “Market Monitor” and “Fuel Finder” schemes will also take place. The PRA has a direct line into the Competition and Markets Authority and the Department for Energy Security and Net Zero and will be representing members to ensure sensible and fair analysis takes place.

Concerning the Car Wash Association, we continue to lobby the government to introduce a national licensing scheme for car washing businesses. By implementing this we hope it will drive out the “cowboy operators” who flout the law, don’t pay tax and in some cases employ slave labour. Such practices have no place in modern society. We will also continue to see new investment in this sector especially into self-serve jet washing facilities.

With all these challenges, it is vital that all fuel retailers and compliant car wash operators support our not-for-profit trade associations as we continue to represent your interests in these dynamic times.

TO VIEW THE FULL FEATURE WITH GORDON BALMER IN THE 2025 NEIGHBOURHOOD RETAILER YEARBOOK AND MARKETING GUIDE, CLICK HERE

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Noting that the price of groceries has gone up, the CMA added prices were likely to remain elevated, however added that not everyone was benefiting in the same way from retailers.

“For example, the discounters do not offer online shopping, meaning those who cannot visit one will not have access to some of the best deals,” said the CMA, adding “while those who cannot access online shopping or travel to larger stores may be reliant on convenience stores where prices are generally higher.”

Providing an update on their work, the CMA’s interim report covers their work across groceries, road fuel, infant formula, veterinary services for pets, online shopping and housing. Since beginning their probe, the CMA has been scrutinising a range of pricing issues in the groceries sector and in response to cost-of-living pressures, has called on grocery retailers to make changes to their pricing practices.

The review found that some independent and smaller grocery retailers were failing to display clear and accurate prices, as required by consumer law, and so to address this, in conjunction with Trading Standards, the CMA produced compliance materials to ensure retailers understand what they need to do to comply with the law.

Additionally, they have made recommendations to governments to reform the Price Marking Order (PMO) and Northern Ireland (PMO), so that the rules retailers follow are clearer, including when displaying unit prices for products on promotion.

Having analysed tens of thousands of loyalty pricing promotions, the CMA has found little evidence that loyalty promotions are misleading shoppers.

The organisation reviewed loyalty scheme pricing, assessing whether savings on offer were genuine. They considered whether there are pricing practices that artificially inflate the non-loyalty (or non-member) price to make the loyalty price appear misleadingly attractive.

To assess this, they gathered information from grocery retailers offering loyalty pricing and analysed what happened to prices before, during and after a product goes onto a loyalty price promotion.

They are now carrying out a consumer survey to understand the impact of loyalty scheme pricing on how people shop, and will publish a report of their findings in November.

Responding to the CMA’s cost-of-living update, Chief Executive of the British Retail Consortium, Helen Dickinson said they welcomed the update.

“With food inflation now returned to normal levels, fierce competition between retailers is ensuring customers are the big winners from the UK’s supermarket sector,” she said.

“We welcome the CMA’s update that they have not found widespread evidence of misleading loyalty promotions. Whether it’s everyday value, or loyalty schemes discounts, retailers know they have to demonstrate clear value to attract and retain customers,” she added.

Meanwhile, the interim monitoring report also indicates that motorists are still paying more for their fuel than they would be if competition was working well.

Last July the CMA published the final report of its road fuel market study, which found that competition in the retail sector for petrol and diesel had weakened since 2019, meaning drivers were paying more for road fuel.

They subsequently made two recommendations to government – to introduce a new statutory fuel finder scheme and to create a new statutory monitoring function to hold the industry to account.

Their July 2024 interim monitoring report has found that weakened competition in fuel retailing persists, meaning prices at the pump are still too high. It said that retailers’ fuel margins remain significantly above historic levels, ultimately putting pressure on households and businesses, and the CMA estimates that the increase in retailers’ fuel margins compared to 2019 resulted in increased fuel costs for drivers in 2023 of over £1.6bn.

Executive Director of the Petrol Retailers’ Association (PRA), Gordon Balmer said they supported any sensible measures that lower prices for consumers.

“PRA members are committed to keeping pump prices as low as possible and operate in a highly competitive environment which is affected by a range of factors, including cost increases for retailers and geopolitical events,” said Mr Balmer, adding that the CMA’s analysis “does not take these complexities into account”.

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Diesel was sitting at an average of £1.76.2p on Thursday — 2p higher than a week ago — while petrol was an average of £1.65.1, again 2p higher than last week, according to the latest figures from the Consumer Council’s weekly fuel price checker.

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Experian Catalist UK averages for 19 October were 141.35ppl and 144.84ppl respectively, said PRA chairman Brian Madderson.

The primary reason for the soaring pump prices is the continuing rise of crude oil costs which recently hit $US 85/barrel for Brent Crude.

This comes to more than a 50% increase since January 2021 and has been caused by a cutback in production from OPEC countries and Russia at the same time as the global economies are staging a rapid economic turnround from the global pandemic.

There is no immediate sign of a change to this position and some analysts have talked about further oil price rises to $US100/barrel by Christmas, the PRA says.

Current average pump prices across the UK are being softened by some of the largest retailers who typically benefit from a 3 or even 4-week lag to their delivered fuel prices.

Only last week, two major grocery retailers in Belfast were vying for business by offering fuel at below standard wholesale cost with pump prices as low as 125.9ppl for petrol and 130.9ppl for diesel.

Another less obvious reason for the wholesale price increase relates to the production profile obtaining in Western Europe, the PRA said.

S&P Global Platts advised PRA: “Physical spot market activity has seen gasoline and diesel rise in tandem with the wider energy complex, and this has a knock-on effect, boosting retail prices for road and heating fuels.

“Lower stock levels in Northwest Europe are tightening supply and this is accompanied by stronger demand for gasoline in the US, which is an export outlet for the European gasoline market.

“There’s also stronger demand in the petrochemical sector, which is attracting certain components that would be otherwise destined to gasoline blending.

“The picture for diesel is not dissimilar, with limited refinery output coupled with stronger demand across Europe and a boost of demand from the heating fuels lifting values across the entire gasoil complex.”

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PRA executive director Gordon Balmer told industry reps at its Business Breakout session at the Crowne Plaza hotel that the group has fielded more than 100 media interviews over the course of the fuel crisis, including outlets in Australia and the US.

During a visit to Northern Ireland with outgoing PRA chairman Brian Madderson, he explained the background to the fuel crisis and how confidential remarks at a Cabinet meeting were leaked to media, sparking a round of panic-buying.

He revealed that pump prices had hit their highest level since September 2013, with wholesale price rises of more than 4p/litre week on week during the height of the crisis, and warned against the wisdom of the Government increasing fuel duty in November.

Updates

Mr Balmer updated reps on the demographics of Northern Ireland’s market – of 571 sites, 61 are owned by the supplying oil company, 472 are dealer-owned and 38 are operated by multiples.

During the year, the PRA has been lobbying government over the Road to Zero strategy, ATMs and the future of cash and forecourt crime drive-offs.

This week, the PRA has been in a series of meetings with Stormont departments, discussing a variety of issues, including road fuels, organised crime, the introduction of E10, EV charging and the need to improve infrastructure, business rates and fuel laundering. The PRA also met with the PSNI to discuss forecourt crime.

Mr Balmer said the group had been talking to the DVLA and the government about the importance of being able to extract keeper’s details in a timely manner after a driver has left the forecourt without paying.

Many police forces don’t deal with this type of crime, so some UK forecourts have been working with Forecourt Eye – but their efforts are hampered if they can’t get timely details about the vehicle keeper and the crime may have to be written off.

Human trafficking

Meanwhile, Mr Balmer said the PRA had been talking to the Department of Justice about human trafficking and slavery and the issue of hand car washes.

The Car Wash Association is concerned about non-compliant hand car washes and has warned fuel retailers who allow a third party hand car wash to operate on their site of the steps they need to take to ensure that there will be no threat to their own reputation, including having a legally binding lease, planning consents including operational days and times, no labour abuse, and valid Right to Work documents.

Mr Balmer also discussed the latest business rates revaluation in Northern Ireland, pointing out that questionnaires are now available on line and responses must be back to LPS by the end of December.

Transformation

The pandemic has transformed UK forecourts, with fuel retailers increasing their focus on non-fuel categories, Mr Balmer said.

Fewer than 1 in 10 of their shoppers during the pandemic were there on a fuel mission, and the pandemic saw many forecourts operate as standalone convenience stores, with sales of ambient food and chilled ready meals key to that success.

Forecourts are ideal for price-marked promotions, and operators are now utilising apps, allowing them to get to know their customer base better, he said.

The meeting also heard from Adrian Tallant from Eurotank, comparing techniques for cleaning fuel tanks; Kristine Moore from Henderson Technology, who discussed the latest developments in PoS technology and how they can help stores, and Julian Eiers of Edge Petrol who revealed how the company can help forecourts to analyse their data to maximise their fuel pricing strategy.

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