Any car driver can tell you how fuel forecourts have been changing: not only that many have closed, but that those that remain are generally cleaner, brighter places delivering a better offer to customers. Even motorway service stations have improved, though it remains to be seen whether running a pub alongside will work…
H & C News was therefore intrigued to meet Ilyas Munshi, Commercial Director of Euro Garages, the expanding company that has featured several times in recent months with its hospitality innovations – and has just won a major award (see below). Euro Garages now has 120 sites – it’s actively looking for more – 2,000 employees, and a turnover of around £500 million.
Euro Garages wins Forecourt Trader of the Year 2013
The Euro Garages group has just won top honours at the Forecourt Trader of the Year Awards – this time for its Calder Park Service Station in Wakefield which was described as having the ‘wow’ factor by the judges:
“It’s a new development featuring a fabulous BP forecourt, standalone Starbucks outlet, impressive Spar store with a Subway offer, and much else besides. But what sets the Calder Park Service Station apart from the rest, is its consistent high standards of operation, as is evident throughout the Euro Garages network.”
‘New to industry’ site
Calder Park is a ‘new to industry’ site: these are designed from scratch, usually on a 2 to 3 acre site close to new road infrastructure, business park or other significant developments, and with substantial parking spaces, allowing customers to stop for meetings, use the convenience store, or have something to eat.
As indicated above, Calder Park not only sells fuel, it also has a convenience shop, Subway outlet and a standalone, drive thru’ Starbucks.
From fuel to retail to hospitality
For Euro Garages, fuel is just part of its operations: though it remains at the heart of the operation, margin on fuel is such that it now only accounts for 40% of gross profit – convenience stores also deliver 40%, with food and drink growing rapidly to 20%. Non-fuel therefore is responsible for 60% of gross profit, and is very important for both present and future.
As a result, Euro Garages is actively investing in its sites: larger shops, creating space for its ‘partners’ (Subway, Starbucks, and others in future), store design, parking areas, 24-hour security (ensuring customers feel secure even in the middle of the night).
And, like many in the wider hospitality sector, they are investing in staff and training, recognising their key role in delivering sales revenue and retaining customers.
Integrating franchises
By the end of 2013, Euro Garages aims to have 45 Starbucks on its 120 sites as well as 43 Subways – it’s also trialling 2 Greggs at present. Such outlets are ‘owned’ on site by Euro Garages, which integrates them into the overall operation, trains staff, and works hard to ensure the quality of the experience for customers.
Even in low demographic areas which would not previously have expected a Starbucks to flourish, Euro Garages is finding considerable demand which, allied to their use for business meetings (assisted by free parking and WiFi), produces impressive results: as much as £23k per week in one drive thru’ site).
Of course, the ideal customer holds a business meeting in Starbucks, then either grabs a meal in Subway, or a take-away from the convenience store, before filling up with fuel and departing! And there are growing numbers of such customers.
And next?
Euro Garages is clearly always seeking to deliver more to its customers, giving them more opportunities to use the services it makes available – and to spend money on site. It will continue to seek the ‘right’ customer propositions and partners for every site, carefully assessing results from existing sites and applying the results.
This means that speed of payment is critical: we can expect to see Euro Garages utilising technology to enable its customers to pay quickly and without delays.
And it will seek ways of using the power of its own and other brands: for example, aggregating Reward or Loyalty schemes. Can it get Starbucks and Subway schemes or offers to work together going forward?
In summary: it’s been a long journey from the fuel-only forecourts of the past, but it’s clear that it’s the non-fuel revenues that are driving profits and that will continue to attract both investment and innovation. This is a business that does not hesitate to look to other businesses for ideas: traditional hospitality operators should, in turn, see what they can learn from Euro Garages.