Maxol will invest some €20 million in its forecourt operations in Ireland in 2022, as it aims to build on a solid performance in the second half of this year.
Fall in profits, but a bullish outlook
Maxol's profit fell by 7.5 per cent in 2020, to €17.1 million, which was not at all a bad performance, according to Maxol Group CEO Brian Donaldson, and business has picked up strongly in 2021. "There are a number of factors that have contributed to the strong company performance since May, but we have pinpointed one that has probably had the most positive impact on our business. The significant rise in staycations provided not only the tourism sector with a bounce, but the forecourt and convenience sector has also been a beneficiary," said Donaldson. "Not only were consumers visiting our forecourts for fuel, but the Maxol network proved a convenient pit stop for snacks, confectionery and deli items and we anticipate that this trend will continue for the coming months."
The planned €20 million investment will be spread across multiple sites including Sandyford, Castletroy, Kilkenny, Clarecastle and Donore Road. That follows on from a €7 million investment programme in 2021 included the refurbishment of two key sites in Ballycoolin (Dublin) and Riverside in Navan (Meath). The multi-million Euro investment programme, which extended to a number of sites across the country, also saw the introduction of drive-thru Burger Kings, new indoor seating areas, extended outdoor seating areas, additional car parking spaces, car wash upgrades, the creation of more retail space, larger Maxol deli counters and the introduction of Premium fuel pumps to additional sites as part of Maxol's carbon neutral programme, which sees 100 per cent carbon emissions off-set on premium fuel purchases. Since 2012, Maxol says that it has invested over €230 million in its network.
"Our investment programme was an important undertaking not only in terms of alignment to our growth strategy, but because we have a strong sense of purpose that includes recognising the role we can play in helping to rebuild local economies. Maxol isn't just a national brand, it's a local brand. Our sites are run by local people, employing local people, serving local people. This model has served us well for more than 100 years and its vigour was tested, and resilience proven during the past 20 months," said Donaldson.
Expansion of food offerings
With fuel sales continuing to be a low-margin operation, it's not surprising that much of the investment will be focused on grocery and food sales. "There are many advantages to online shopping and indeed, a move to online kept many Irish businesses afloat when their doors were shut. But consumers have not abandoned what they see as a more experiential, personal way to shop that isn't purely transactional. People are sociable beings by nature and our network model, and the importance we place on our food service, stood up to the test of significant behavioural change during Covid-19," said Donaldson. "If anything, the Covid-19 crisis proved the robustness of our evolving business model. While fuel sales dropped by up to 70 per cent during the first week of lockdown, sales of food and grocery remained strong. Many people didn't want to shop in large, busier stores so their local Maxol became the go-to for their everyday essentials.
"We are growing our food offering all of the time and are gearing up for the launch of our third drive-thru Burger King at Ballycoolin in Dublin, together with our first Apache Pizza outlet in Donabate, Co. Dublin." Part of the new investment will also see Irish-owned OKR Group brought in as a supplier of hot, ready-to-go food.
Freshly brewed coffee is a key driver of customer loyalty and Maxol's exclusive ROSA coffee brand is expected to hit €9 million in sales this year, the most popular variant being a 12-oz Americano. Minerals (are we still the only country that calls soft drinks 'minerals'?) were the biggest selling category product in Maxol service stations account for 22 per cent of total shop sales, followed by confectionery (22 per cent) and dairy (13.5 per cent).
Car washes a big seller
Another big seller for the group is car washing - some 600,000 car washes will be carried out at Maxol sites this year, says Donaldson. A staple of the forecourt model, which is an often overlooked and undervalued jewel in the crown, is the car wash facility. As we transition to alternative fuelled vehicles, we can't forget that they too will need to be washed. And, by making our car wash more environmentally friendly, using recycled rainwater wherever possible, we are future proofing a key, sustainable service offering that is really important to our business." The car wash is being seen as a key driver of Maxol business as the country makes the switch away from petrol and diesel and towards electric motoring.
On that subject, Maxol is looking to expand on its carbon-neutral policies, following on from the offsetting programme for premium fuels. The group claims that it was one of the first retailers to offer 100 per cent compostable cups and lids, discounts are provided to customers who use a reusable cup when purchasing hot drinks, and the company has been installing compostable and recyclable bins across its service stations to support customers' recycling efforts.
"The Maxol Group is very transparent and also very serious about its commitment to the environment and investing in ways to reduce our carbon footprint," said Donaldson. "We do not pretend to be something that we are not. We sell diesel and we sell petrol and will continue to do so as long as these fuels are needed. There's no silver bullet that will suddenly transform the automotive market overnight, but we are looking at all of the ways that our business can change and make better, greener choices. Every investment and every decision begins with an examination of the impact it will have on the environment; we take a 'sustainable first' approach to every operational decision. We are working with KPMG on a programme that will allow us to better benchmark and measure our carbon savings year-on-year and that is an important step in our sustainable journey."