New figures undermine OFT findings Sept 2013

New data from the UK government confirms that supermarkets (Tesco, Asda, Sainsbury’s and
Morrisons) now have a much higher share of the UK market for retail transport fuels than previously
admitted. The latest combined total for petrol and diesel sees an increase to 46.5% in 2012. This
compares with the official total of just 39% for 2011 quoted in a recent Deloitte study on the sector and
also 39% for 2012 stated in the Office of Fair Trading (OFT) report into UK fuel prices (see Petroleum
Review’s Retail Marketing Supplement in April).

The statistical data on retail fuel volumes since 2008 has recently been revised on the
Department of Energy and Climate Change (DECC) website, after gross reporting errors were uncovered
by officials, reports the Petrol Retailers Association (PRA). 5,000 forecourts have closed since 2000,
another 175 closed last year and the independent retailers are continuing to get massacred by the
aggressive discounting and below cost sales tactics by supermarkets. There was considerable
complacency evident in the Deloitte and OFT reports which assumed that supermarket’s volumes were
levelling off and so the market was steady. However, we warned government that the 2012 Christie
study* indicated that supermarkets are trying to open up to 50 new forecourts for each of the next four

The data revision indicates that the average supermarket forecourt sells 12mn l/y and
independents 2mn l/y. Thus, every newtoindustry opening by a supermarket could suck up the entire
fuel volume of six independent retailers in the local area and jeopardise the business of at least 10
existing forecourts every year if such expansion proceeded, notes the PRA. ‘This will be bad for
competition, bad for consumer choice, bad for jobs at local family firms and bad for rural communities.’

This rejigging of key market information underpins our members’ real concern that the UK’s
energy resilience for retail fuels is at stake. If this situation is allowed to continue, there will be an
inevitable acceleration in the number of site closures to more than 300 per year. Thus there will be a
severe worsening of supply resilience from fewer sites with low stockholdings.