Though plenty of gas is being guzzled, filling stations have become scarcer
ON A street in London’s East End, among art galleries and upmarket gyms, lies what looks like a filling station. Yet beneath its rickety forecourt roof, the pumps have been replaced by vendors offering a range of faddish foods, including Japanese hot dogs and fish-finger sandwiches devised by a celebrity chef. One thing not on the menu is petrol. The firm that used to run the filling station left the site in 2013; the space is now home to businesses that sell food rather than fuel.
This is a familiar tale. Although combined petrol and diesel consumption has grown by over 75% since 1970, the number of petrol stations has fallen by nearly 80% (see chart). The decline has been especially steep in cities. London has nearly half as many petrol stations per car as the Scottish Highlands; only four remain within the central congestion-charge zone.
The collapse came in two waves. Between the peak in 1966 and the end of the 1980s, independent village petrol stores were put out of business by oil companies offering self-service and low prices. Then, from the early 1990s, oil firms were undercut by supermarkets, which sold petrol at near cost to attract shoppers to their out-of-town sites. Soaring property prices made city-centre land worth “a lot more as a block of flats than as a petrol station”, says Arthur Renshaw of Experian Catalist, a market-research firm. At each stage, margins shrank and forecourts grew. The average filling station now sells nearly twice as much fuel as in 2005.
But the decline may be coming to an end, says Rob Colville of CBRE, a property company. Innovations have helped bring in customers. Jet, a fuel retailer, recently announced a deal with Amazon to allow customers of the online giant to have goods delivered for collection at its petrol stations. Supermarkets are investing in more outlets: since 2010 the number of filling stations owned by the “big four” has risen by 15%. And petrol is one of the few retail businesses that is more or less immune to online competition (though high-tech disruption looms in the form of electric cars).
Most important has been the realisation that petrol need not be the main source of income for a filling station. Some sparkling new locations have added butchers or fishmongers. Home-made cakes, wild-boar sausage rolls and local cheeses can now be found just off the M5 motorway at the recently opened Gloucester Services. And, as Mr Renshaw says, “Coffee is almost a necessity nowadays”. If they can no longer make much money filling cars, petrol retailers may have more luck filling their drivers.
This article appeared in the Britain section of the print edition under the headline "Running on empty"
