Ireland's Maxol CEO, Brian Donaldson speaks to Maev Martin about the slowdown in EV sales and the importance of convenience retailing to the forecourt business model across Europe. This article first appeared in ESM’s January/February 2025 edition.
Forecourts in Ireland have evolved to the point where profits from non-fuel sales are rivalling those from the sale of fuel, and Donaldson believes that non-fuel sales will become an even bigger part of forecourt operations in 2025 and beyond.
“Non-fuel revenue is critical to the future of roadside retailing,” he says. “Internal combustion engines will get more efficient and use less fuel, and we will see the continued transition to EVs and other forms of energy.
“If your income from fuel is going to reduce in time, forecourts need to replace that, so Maxol is becoming a forecourt convenience retailer, and our investments are about growing our revenues in coffee, foodservice, basket top-up convenience, off-licence and other services, such as car-washing, in our key stores.
“That means that we need the most reliable equipment and technology, together with the optimum store layout, to deliver the right experience for our customers.”
Maxol’s full-year trading figures for 2023 revealed that more than 40% of the retailer’s gross profit now comes from non-fuel sales.
“Income from convenience retail and food and car-washing, together with new mobility offerings, have grown significantly in importance for our group, and they are central to the repositioning of the company as a leading convenience retailer,” says Donaldson.
“Driving the repositioning of the business is a multimillion investment programme in our store network. The service station of 2024 is very different to that of ten years ago, and we are creating destination stores that offer a wide range of eat-in and food-to-go options, where customers can have a meal or a coffee and access good wi-fi in comfortable surroundings.
“We have to continue to build on the 40% and above, and our objective is to grow non-fuel revenue to as close as 60% – ideally, over 70% of gross profit – and we are focused on sites where we know that non-fuel sales can yield that level of profit.”
A European View
Donaldson has spent quite a bit of time looking at forecourt concepts across Europe, and he believes that investment there will accelerate over the next two to five years.
“Certain markets are behind Ireland, but other markets are starting to catch up,” he says. “If you go into Scandinavia, Norway is investing very heavily in ‘foodvenience’, and top-up shopping concepts are starting to develop. We’re seeing good things by 7-Eleven in Copenhagen and Denmark, by Migrolino in Switzerland, and Q8 and NOAH in Denmark.
“Also, we work quite closely with Repsol. We went to Madrid to look at convenience retailing and roadside retailing last year, and Repsol have been doing a study of best practice both in Ireland and in Europe, and they are adopting that within their retail model.
“Everyone in Europe is moving forward, and people in our industry know you can’t stand still any more – that you need to invest, change your type of offer, so you attract a new customer – because, ultimately, liquid petroleum fuel is going to become a smaller part of everyone’s business at some point in time.
“That is the uncertainty: when is the inflection point? I think what we’re seeing with electrification is it’s a technology that’s starting to grow and build, but it’s not growing as big or adopted as quickly as governments had expected, so there’s a longer period of time to get to net zero in terms of mobility, and that gives everybody the opportunity to invest and to reposition their type of offer.”
A Frictionless Customer Journey
In line with its focus on developing the in-store offer, Maxol has been using the latest technology to make the customer journey a faster and more rewarding experience, both at the pump and in store.
“Our loyalty app, for example, offers rewards on coffee, car washes, and extra value in store, and also allows customers to pay for their fuel directly from the app, with the FuelPay function,” Donaldson says, “so paying at the pump or on the app, self-service checkouts, more food options, contactless payments on car washes, and more parking are all contributing to attracting and, importantly, retaining customers.
“In 2025, we are extending the number of outdoor payment terminals, to ease congestion in our forecourts, and we are keen to help our retailers streamline processes in store. With that in mind, we will be introducing electronic shelf edge labels, and in larger-format stores, we will roll out more self-checkouts.
“We are also planning to introduce automatic stock-ordering with our wholesalers, to ensure that we have onshelf availability and no gaps in ranges. We have also been investing in our HQ management tools, to help identify sales trends and make better-informed decisions. In addition, we have introduced a lot of digital screens in our Maxol Deli and at our ROSA Coffee stations, as well as at other touchpoints. This allows us to change our messaging remotely and instantly. Also, it is much more impactful.”
A €65-Million Investment
The Maxol Group’s turnover in 2023 was €756 million. “With the cost of fuel down, this represented a decrease of €120 million on 2022, [when turnover was] €876 million,” Donaldson says.
Group profit after tax was €27.5 million (€37.8 million in 2022, which included a once-off gain from the sale of a valuable property in Dublin).
“Despite continuous investment in our operations and the challenges of the last four years, including the Covid pandemic, inflation, Brexit, and global geopolitical unrest, we finished 2023 in a strong financial position, with no net bank debt and a substantial cash surplus,” says Donaldson.
“Following an investment programme of €65 million in the business during 2023/2024, we are forecasting an even stronger performance for 2025.”
This investment programme included the acquisition of nine new sites, which are now operating under the Maxol brand, and the redevelopment/retrofit of 12 stores in the Republic of Ireland and five in Northern Ireland.
It also included the redevelopment of an additional three sites in the Republic of Ireland and two in Northern Ireland, which are nearing completion, including Dublin’s M3 Mulhuddart, where there will be a new Zambrero and Supermac’s drive-through.
Burger City is now part of the enhanced food offering at Maxol Adamstown and Maxol M7, in Kill.
Slowdown In EV Car Sales
Despite these positive developments, there is a cloud on the horizon. “EV adoption has slowed, with new Irish EV sales to November down by almost 25% on 2023,” says Donaldson.
This can’t be good news for brands, such as Maxol, that have invested heavily in the development of their EV infrastructure and network.
“I remain optimistic about the overall market,” says Donaldson. “Consumers have stalled on buying into the transition to EV, but there are reasons for that. They include the high price of EVs and concerns over the residual values, which will be lower than the residual value of an equivalently aged petrol or diesel car.
“Car buyers are also concerned about replacement and timelines for batteries, which are very expensive, and the availability of EV infrastructure. Where can people charge if they are on the go? Global research has shown that 70% to 80% of charging in Scandinavian countries is being done at home, so we are observing the slowdown in the transition to EV, and other European countries – such as Germany, France and Italy – are seeing a slowdown in private ownership of EVs as well.
“[The] transition to net zero will happen, but the pace and speed of change will not be as fast as we expected 12 months ago. Despite this, companies are continuing to make the EV investment, so we will continue to invest in EV infrastructure. Our first ultra-rapid EV hub for the Republic of Ireland – featuring six high-speed 200kw chargers, offering a 15-minute charge time – was launched in Newbridge [Co. Kildare] earlier this year. This followed the launch of Northern Ireland’s first dedicated ultra-rapid EV hub – in Kinnegar, Co. Down – in 2022, and Maxol Braid River, Ballymena, in 2023.
“In 2025, we are planning to open our next ultra-rapid EV hubs in Rathnew, in Co. Wicklow, and at the Long Mile Road [in Dublin], and potentially at the M3 in Mulhuddart. That is all subject to planning permission and ensuring we can connect to the grid. Our concern is that if we move too quickly, the technology we are installing could be out of date. Securing planning permission, connection to the grid, and [the] high cost make the timelines long, but we are still committed to this sector. It is simply a case of opening EV hubs at a slower pace than we had planned, to match EV car sales in the current market.”
Retail Planning Guidelines
Given Maxol’s ambitious plans, I asked Donaldson what he believes is the biggest challenge facing forecourt brands as they seek to grow both the fuel and non-fuel sides of their business.
“The biggest challenge to our business, in terms of growth, is the Retail Planning Guidelines – RPGs [in Ireland] – which restrict our convenience/retail offer to 100 square metres, so one of the things we would like to see with the next government is a change to the RPGs,” he says.
“In Northern Ireland, we can run our retail offering over 300 or 400 square metres. The planning policy for roadside retailing in Northern Ireland is more fit for purpose than it is in the Republic of Ireland. That is because a lot of our planning guidelines go back to legislation that was introduced in 2011 or 2012, so all we are asking for is convenience retailing regulations that align with the requirements of today’s retailers and consumers, who are increasingly looking to shop local. If roadside retailing is to continue to meet the demands of consumers, we need an offer that is fit for purpose, and those RPGs are a major restriction to developing that retail offer.
“Another obstacle that is restricting growth in our sector is the high cost of doing business, as well as the level of regulation. While regulation is necessary to maintain high standards, sometimes it is very expensive, onerous to implement, and doesn’t add value to the consumer.”
The Future Of Forecourts
With the increasing importance of retail convenience to the forecourt business model over the past ten years, how will forecourt retailing be transformed over the coming decade? “To date, in 2024, new-car sales have contracted by 1%, year on year, and electric-vehicle sales have contracted by almost 25%,” says Donaldson.
“EV accounts for 14% of new-car sales, which means that 86% of all new cars still use some form of fossil fuels, and those vehicles have a life expectancy of between ten and 15 years, so we can see that the transition to net zero will be slower and longer. That doesn’t mean we should change our business model.
“From our point of view, we are continuing to develop our retail offer, and that means building bigger retail stores. We will continue to look at the choice of hot beverages that we now offer, and foodservice continues to be very important – people will fill up their car once or twice a week, but they visit our stores every day for breakfast, lunch, and evening meal solutions.
“Ireland is regarded as a global leader in the forecourt retailing sector, and people come from all over the world to look at what is happening here. We are continuing to invest within our stores and on the forecourt, in terms of premium fuels, the car-washing experience, and EV hubs.
“I envisage the forecourt of the future as a mosaic of energies, including EV hubs, traditional petroleum fuels with more biofuel content, and other synthetic fuels, such as hydrogen, for bigger trucks and vans, but you need space and car-parking [facilities] to support all of this. We try to see our business through the eyes of our customers – people want to be able to access, navigate and leave a site with ease and be able to park up, so the future will be different.
“However, when it comes to how we move into a different type of retail experience, I think it will be an evolution, rather than a revolution. Today’s modern forecourts are almost mini community ecosystems, so it is about further developing our community of services and facilities.
“For example, some of the services we have on some sites include barbers and valeting, and in years to come, we may even see financial services facilities in our stores. Who knows what we will find on Irish forecourts in ten years’ time, but you can be assured it will be different from today.”
