January 12, 2022
Very few retailers are as experienced as the Highway Stops team.
Tony- himself ex BP- is surrounded by a top team including owner Raj Raja (who built MFG) and Shilan Raja, who has been exposed to the fuel industry for most of his life.
With over ten sites, they have approximately 40 decisions to make on pricing every single day. When we first met them almost five years ago, Raj and Tony were using spreadsheets and printing off ePoS reports to run their pricing process.
Fast forward to 2022 and the spreadsheets are no more, the printer is in the bin (it isn’t, but they don’t use it to print off pricing data anymore), and Shilan and Tony now run the process together.
As for Raj, you can take the man away from pricing but you cannot take pricing away from the man. Not only does he still log into EdgePetrol regularly, but he was also the first to log in as we launched our new 2.0 version in early January!
The first thing Tony and Shilan do is check the live margin for the group, which is weighted and blended across all sites and grades gross and net on EdgePetrol. “The gross margin is incredibly important, but understanding a margin net of fuel card transactions using EdgePetrol’s net margin is also essential in order to make sure we are on track to hit our actual month-end business numbers.”
They’ll follow this with a review of yesterday’s fuel sales and get a feeling as to whether volumes are running high or low. Checking this gives them an idea of whether there are any problems on site and how the market is performing.
After this sense check, they’ll do a site-by-site check on stock using EdgePetrol’s BuySmart. As any retailer knows, avoiding stock outs are key to running a forecourt, but the machine learning forecast also predicts what future volumes and what tank levels will be up to seven days in advance. Using this, Highway Stops can buy when the price is low and- where possible- hold when the price is high. A single decision can be a £1,000 saving on a single site.
For the sites that have Vendor Managed Inventory (VMI) arrangements, they’ll do a quick check to make sure the appropriate deliveries are coming in. “Even with VMI it is important to keep an eye on the BuySmart forecast and we will contact our suppliers if we think we need to get more fuel.” said Tony.
With the sense check complete, Tony and Shilan will drill down to site level, checking individual site and grade volume, margin and pricing position vs the competition. They’ll check which grades are below their targets and where the trend indicators are showing they are up or down versus their usual volume and yesterday’s margin.
Bringing this information together has allowed them to make the decision of where they need to make changes to hit their goals and what those changes should be. “Because we now have an accurate view of our margin, we have more confidence in the price change we make and can hold to grab volume when we are hitting our desired target. If we didn’t know this number and were still using replacement cost, we might feel we needed to push for more, impacting volumes.” explained Tony.
Price changes are sent via the EdgePetrol app and Tony and Shilan are alerted if price changes are not made within a certain time period, essential with a commission operated model. This means they have confidence that the time spent on choosing the right price is worthwhile and that money is not being left on the table.
For Tony, incorporating EdgePetrol has been life changing. “Running the process with EdgePetrol makes pricing easy. It’s all there in the app and really focuses your mind on getting to the right decision. Previously, someone would have to have sat and pulled this information. Now I can price from anywhere in the world!
Find out more about how EdgePetrol is helping retailers optimise their profits by visiting our case studies section here.
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