THE SIMON SMITH GROUP: FROM TRANQUILLITY TO TECHNOLOGY

The peace and tranquillity of an idyllic Cotswold Farm may seem an unusual place to manage the day to day business activities of one of the UK’s most successful forecourt operations, but it works for Susie Hawkins and her father Brian Tew, directors of the Simon Smith Group. The family business, set up by Susie’s parents 41 years ago when Brian left Shell to run his own site, is currently moving through one of the most exciting phases in its history. The imminent knockdown and rebuild of two of its seven filling stations follows closely on the heels of a 10% boost in volume on two Gloucestershire forecourts recently rebranded from Total to Gulf. Susie grew up in the business; her school holidays spent filling shelves, working the tills and helping managers with stock-checking. At age 18, she began a degree in economics and accounting at Bristol University then followed that up with a Master’s in Business Management in the Food Industry at the Royal Agricultural College. She then went onto work in the City before returning to the fold, something that was always planned. She is now the driving force behind the forecourt operation whilst her sister, Julie – an international three-day event rider – runs the farm and equestrian business. “I learned a great deal about retailing at an early age and it gave me incredible confidence,” says Susie. “I also developed the analytical skills to look at how businesses are run and was able to appreciate the importance of people and how much inefficiency arises out of poor management practices. I realised early on that convenience retailing was the future for the independent sector. Once I returned, I made sure that the process of involving the expert retailers in our forecourt operation swiftly followed.” In 2004, Susie hit the headlines when she fought off stiff competition from independent retailers in America and Australia to win a NACS (Association for Convenience and Fuel Retailing) Global Scholarship.  The entry, much like her Master’s dissertation, explored the opportunities for the independent to thrive amid growing competition from the multiples. Last year, 14 years after returning to the family business, Susie and her father received the accolade of Retailer Champion of the Year at the Forecourt Trader of the Year Awards. “It was an experience that I will cherish forever. To be recognised by the industry that you work in, father and daughter together, surrounded by family and friends was something very moving.” Today the Simon Smith Group pumps 30 million litres annually with shop turnover of £8.5 million. Fuel volumes across its seven sites range from 3.5m litres to 7.5m and the company recognises the importance of working alongside strong brands and trusted suppliers to achieve its goals. Certas Energy and Shell are its preferred fuel suppliers with Budgens, Londis and Spa, its C-store partners of choice. Susie uses the example of their Cirencester filling station to emphasise the importance of selecting the right convenience partner. “The rural mix of customers at New Quarry respond well to Budgens’ high quality and the variety of fresh produce. The site manages to sell 75,000 litres of fuel and has a shop turnover of £40,000 each week even though it is off the beaten track, has limited transient traffic and is within walking distance of a Tesco Superstore.” “We have to work very hard to attract custom, develop a rapport and deliver the service that will bring people back,” she continues. “We make sure that we are involved in the community by supporting local events, local charities and local suppliers. Alongside a range of strong promotional offers our store is always well stocked with plenty of fresh meat and veg. We have customers who rave about our 100% British meats and will never buy their Sunday joint anywhere else.” “A rural mix will not necessarily have the AB demographic that an Oil Major might demand but we are extremely comfortable with that. Its horses for courses and the key is to identify the customers who will provide the most benefit from a long term relationship. We’ve learnt over the years that there is little point in going for the cheap fuel chasers. We could waste so much energy and margin doing so without receiving any loyalty in return.” That doesn’t mean that the Group is not price conscious. It recently introduced a price watch comparison on one site, matching its local superstore’s fuel price. The result was not only an increase in forecourt and shop business but a boost to customer confidence, reassured that the site is committed to deliver on price as well as service.   According to Susie the most significant change in forecourt retailing during the past five years has been the diminishing impact of the major supermarkets on the Group’s business. She suggests that consumers are now more inclined to use a forecourt shop and are becoming savvier about the negative impact of supermarkets on local businesses and community life. “When a forecourt convenience shop is well presented and the quality, range and pricing are within acceptable parameters, it now presents a real alternative. The supermarket may still be appealing for the ‘big shop’ but it is a more relaxing experience to shop locally without queues at the pumps, in the aisles and at check outs. Parking is less frenetic on a forecourt and the personal interaction generally better.” “There are still plenty of areas across the UK where supermarket proliferation remains a serious threat to the livelihood of the independent petrol retailer. However, in our case the emphasis has changed and it is no longer the drain on the business that it once was. As a small operator we used to spend much of our time price-watching competitor forecourts and fearing the opening of yet another supermarket. Now it’s the convenience stores in close proximity that are the biggest threat to our revenues. That does not mean that fuel has lost its importance; we are still petrol retailers but without a thriving shop it would be difficult to survive.” Susie acknowledges the growth of fuel-brand free forecourts and whilst monitoring the trend closely she has no current plans to take this route. “I fully understand why some independents might be persuaded to look to a convenience brand for their pole and forecourt livery but fortunately we still see great value in working with big fuel brands such as Gulf and Shell.” The Simon Smith Group currently operates seven sites and has hovered around that number for several years. According to Susie, it’s a number that seems right for their type of business. “There is no optimum number but if we can successfully manage seven we are happy. We are a small hands-on operator. We wouldn’t turn down a site if it sat well against our current portfolio but we are not into a numbers game. Our sites are all within easy reach which enables us to develop the local knowledge on which decisions are made. There is no such thing as one size fits all in petrol or convenience retailing. Our customer base and the socioeconomic make-up of the locality will influence the shop brand we choose, the recruitment of staff and all aspects of our marketing effort.” Currently the focus of the Group is on the two imminent redevelopments. The new sites include shops with a combined floor space of 5,000 sq ft, adding further impetus to its retailing business. Plans are also in place to introduce a Post Office to one, further strengthening community interaction. Susie is confident that with the support of her father, their suppliers and the loyal team of people who work for the group, this significant seven figure investment will be worthwhile. “The planning of our new sites from a blank piece of paper has been very hard work but also immense fun. Our biggest surprise has been the escalation in costs. We have undertaken a few full redevelopments over the years and estimate that it’s now around 50% more expensive to redevelop a site than a decade ago. That means even greater scrutiny of every aspect of the work in fine detail before we commit to builders and suppliers. As a small operator it’s not easy to run the day to day operation and micro manage such a major investment without something falling through the cracks.” “I’m also aware that once the build is completed, there will be no time for euphoria or exhaustion; we have to reenergise ourselves immediately to recruit up to 20 people, train them to successfully manage the business and then ensure that the launch is well planned and properly executed. That said, I have a great team of people to support me, most of whom have been with us for at least five years, some over 20! Emma Dee is a good example; she joined as a cashier 14 years ago and now helps manage our day to day activities.” Alongside its people, technology is also at the heart of the Simon Smith Group’s operation. Having the tools at his finger tips to access knowledge and manage costs is something that Brian Tew learnt at an early age with Shell. “We are not technology savvy but our business is and we continue to embrace technology to effectively manage and improve our business,” explains Susie. “My father was a pioneer in simplifying forecourt procedures through technology. He was the first forecourt operator in the UK to introduce a card-based system to manage local accounts and probably the first to insist that account customers paid by Direct Debit. He also secured the services of a professor from the University of Sussex in the 70’s to develop a stock control system for forecourts. That was pretty much revolutionary at the time.” “Regretfully, it’s not so easy these days for the smaller independent to be at the forefront of change; we used to be a test bed for new ideas but the tendency now is for tech companies to rely solely upon the big operators and oil companies for feedback. I think you can miss a trick when you by-pass the smaller dealer who, after all, makes up the lion’s share of forecourt numbers in the UK!” Four decades down the line, missing a trick is certainly not something that is easily levelled at the Simon Smith Group.

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