PRA - Neighbourhood Retailer

Forecourts facing the future

Caroline Rainey — Mon, 24 Feb 2025 14:53:34 +0000

Gordon Balmer, Executive Director of the Petrol Retailers’ Association comments on the past year and challenges ahead in 2025.

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.

Gordon Balmer, Executive Director of the Petrol Retailers’ Association

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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‘Little evidence’ of loyalty price promotions misleading customers: CMA

Caroline Rainey — Mon, 29 Jul 2024 12:04:00 +0000

Shoppers should be reassured that effective competition is allowing them to shop around and get fair deals, according to research conducted by the Competition and Markets Authority (CMA).

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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Neighbourhood Retailer May issue is out now!

Caroline Rainey — Wed, 10 May 2023 11:59:44 +0000

The latest issue of Neighbourhood Retailer is now live! Packed with all the latest information and news impacting the grocery industry – make sure you stay up-to-date with what’s happening in the sector across Northern Ireland.

AT-A-GLANCE…

Special articles and analysis

* Cost of energy crisis facing retailers – top NI retailers reveal the bills burden they’re having to conquer.

* Baking battles as staffing issues give cause for concern – shortage of qualified bakers leaving bakeries and retailers searching for staff.

* PRA Business Breakout Belfast.

* The latest trends in the tobacco and vaping sector – see our in-depth feature inside.

* Time to get entering the 2023 Neighbourhood Retailer Awards, as the entry deadline is fast approaching!

* All the latest news and information affecting the grocery industry.

STORE PROFILES

* Lynch’s Foodstores SPAR Clonoe have enjoyed growth and development in their store and staff, as Area Manager Danielle Johnston tells NR.

* New £0.5m Centra Foxes Glen, Stewartstown Road store opens after acquisition of the former Mace store by Musgrave NI.

* Carnbrooke go for Wagyu Gold as they expand their reach, bringing their top-quality meats to even more customers across the province.

READ THESE EXCLUSIVE ARTICLES AND MUCH MORE IN THE MAY ISSUE BY CLICKING HERE

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Pump prices will remain high in NI for some time: Consumer Council

Linda Stewart — Fri, 25 Mar 2022 12:40:02 +0000

Pump prices are expected to remain high at least for some time, despite the cut on fuel duty, according to the Consumer Council.

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.

Some reports revealed prices actually increased between the time of the Chancellor’s announcement and later that evening.

Richard Williams, head of transport policy at the Consumer Council, said it would expect retailers to pass the cut on as soon as possible but costs will still remain high regardless of the duty reduction.

He said: “The Consumer Council tracks forecourt prices across Northern Ireland on a weekly basis and we expect that all retailers will have passed on the reduction when we next publish our price checker on March 31, and will raise it as an issue if we have the evidence that it has not.

“However, global wholesale oil prices are very high, and are rising again, so unfortunately, even with the fuel duty reduction, we expect pump prices in Northern Ireland to remain high for some time.”

He said factors influencing prices at the pumps and variations across Northern Ireland include “when the fuel was purchased by the retailer, how much they purchased at a certain price and the business model of the station which may discount fuel to get customers into the shop”.

Tesco is one retailer that has already passed on the duty cut. It said it has increased the cut by 1p, offering drivers 6p off per litre, with new prices rolled out across its sites yesterday evening.

But other retailers are still selling at the higher rate. The Petrol Retailers Association (PRA) says consumers here won’t feel the cut immediately unless the Chancellor backdates his offering.

At best, we will see changes, if only slight, at the end of the month, according to PRA director Gordon Balmer.

Mr Balmer criticised the reduction, saying it is not comprehensive enough to reduce the burden on motorists.

He added: “Other European countries have gone further. For example, Ireland has cut duty by 17p, leaving our members in Northern Ireland at a competitive disadvantage as they are unable to compete with prices across the border.”

Mr Balmer said oil prices have also risen, dampening the 5p cut. Yesterday, Brent Crude rose by $6 a barrel.

“Retailers still need to deplete their petrol and diesel stocks purchased before the duty cut, meaning that motorists won’t see a price change at the pumps immediately unless the government backdates the duty cut to March 1,” he said.

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PRA urges UK Chancellor to cut fuel duty, warning NI retailers will lose out

Linda Stewart — Fri, 18 Mar 2022 11:01:35 +0000

The Petrol Retailers Association has urged the UK Chancellor to cut fuel duty, warning that retailers in Northern Ireland are being put at a disadvantage.
Global energy prices are still volatile due to the ongoing crisis in Ukraine, unduly impacting consumers at the same time as cost-of-living increases, the PRA says.
The PRA is calling on the Chancellor to follow the example of other European countries and cut fuel duty to shield consumers from international events.
The Republic of Ireland (ROI) has cut fuel duty, putting forecourts in Northern Ireland (NI) at a competitive disadvantage as motorists and fleet operators cross the border to fill their tanks.
Gordon Balmer, Executive Director of the PRA said: “It is crucial that the Government takes steps to reduce the burden of energy prices on consumers. Government inaction is now impacting our members in NI, who are unable to match the prices of their counterparts across the border. We strongly urge the Chancellor to follow the example of other European countries and cut fuel duty.”
In a letter to the Chancellor, the PRA warned: “We expect that NI residents that can take advantage of the significant difference in pump prices across the border will do so and heavy goods vehicles (HGV) operators will be sending their fleets in greater numbers to ROI border sites to replenish their vehicles, reducing demand for petrol filling stations in NI and hampering their ability to continue their operation through no fault of their own.
“This is putting our NI members at a competitive disadvantage, as it is impossible to match prices across the border without Government intervention.
“While the ROI, along with other European countries, has taken significant steps to shield their consumers and businesses from soaring energy prices, the UK is yet to act. At a time when cost-of-living is increasing, rising energy prices are something motorists in this country can’t afford.
“This will impact the poorest among us the hardest as they are slowly priced off the roads. The need for Government action is urgent. With no end to the Ukraine crisis in sight it falls upon the Government to shield its population. The continued absence of action will have a detrimental impact on UK consumers.”

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