Yeah, prices are different round the country even at the same company.
Fuel up/down again
- Thread starter [TW]Fox
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It's not a loss leader at 110p a litre. We don't know what the wholesale price of unleaded is right now but we do know for example that freight firms can buy in bulk at 87.6+VAT. Supermarkets almost certainly pay less but even if they didn't that would be a purchase price including VAT of 105.12p a litre.
So you are not buying 'inflated' groceries which pay for 'loss leader' fuel.
ASDA are typically as cheap as any other supermarket for groceries anyway.
No, of course not - the expenses of retailing the fuel will also come out of it. We don't know what these are. They are unlikely to be 5p a litre though.
However this article:
http://www.bbc.co.uk/news/business-15462923
Implies that the costs of retailing the fuel are less than 5p a litre.
Or perhaps they use the high levels of throughput as a result of the people shopping in the store to chase volume over margin when it comes to retailing fuel? There are likely to be numerous strategies at play - however blindly stating that fuel is a 'loss leader' to supermarkets is IMHO wrong - it probably isn't in most cases.
I just filled with diesel at BP for 116.9p a litre. Asda is 116.7p a litre and the nearest Sainsburys and Tesco are both 117.9p a litre. Crap loss leader that...
Supermarkets profit from retailing fuel.
http://www.economicshelp.org/blog/11721/economics/the-price-of-petrol/[TW]Fox;27381464 said:
http://www.telegraph.co.uk/finance/...ell-almost-half-of-all-petrol-sold-in-UK.html
Supermarkets have admitted it themselves.
Neither of those articles have quotes from supermarkets saying that. It's mostly anecdotal.
Supermarkets obviously do, at times, loss lead on fuel. But this is usually in a form of voucher promotions or similar. The current prices do not appear to demonstrate loss leading on the part of supermarkets.
Supermarkets will run very low margins but they'll also shift very high volumes as well, perhaps higher volumes than an independent could expect due to higher footfall.
You simply cannot categorically state as you did that the supermarkets are selling fuel at negative margin and that this is why some other garages cost more. There isn't enough evidence to suggest that.
Supermarkets obviously do, at times, loss lead on fuel. But this is usually in a form of voucher promotions or similar. The current prices do not appear to demonstrate loss leading on the part of supermarkets.
Supermarkets will run very low margins but they'll also shift very high volumes as well, perhaps higher volumes than an independent could expect due to higher footfall.
You simply cannot categorically state as you did that the supermarkets are selling fuel at negative margin and that this is why some other garages cost more. There isn't enough evidence to suggest that.
Anecdotal? But they do?
Those voucher deals are offset by the grocery costs though aren't they? And they don't put prices up only when they run those schemes. They know they don't need to make money on the fuel if they get people into the store, and they most certainly do run negative margin at times when they run the money off deals.
Those voucher deals are offset by the grocery costs though aren't they? And they don't put prices up only when they run those schemes. They know they don't need to make money on the fuel if they get people into the store, and they most certainly do run negative margin at times when they run the money off deals.
I know, I said that above?
But this discussion spawned from a question asking why Shell and BP were, in one persons area, more than supermarkets. Nothing to do with the voucher schemes which are obviously loss leaders.
At advertised pump price, supermarkets are making money retailing fuel. Perhaps not huge amounts of money, but money all the same.
There is a common misconception in this country that Supermarkets sell fuel at less than cost price because you might pop into the shop and buy beans and milk. This just isn't the case outside of specific promotions. The Supermarket PFS sites generate money for the business directly as well as indirectly through increased customer flow.
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You haven't though, your link shows typical margin (not profit) at 7.1p while currently it could actually be 5p, so less. Just because it's called loss leading, doesn't mean stuffs actually sold at a loss by the way.[TW]Fox;27381591 said:
Read it again - it shows the retailer margin as being 4.7p on diesel. That includes the profit *and* the costs of retailing, therefore from that we can extrapolate that the cost of retailing a litre of fuel is less than 4.7p.
The fact that petrol had a retailer margin on 7.1p just means petrol was more profitable, it doesn't cost more money to retail petrol than it does diesel.
I will concede that technicality though
(Although most people when talking about this are under the impression its about below cost, ie that it represents a barrier to other market participants of matching the price. A loss leader will usually be below cost because it can be easily matched by others if its not, unless you have a particularly lean supply system).
paying 93.63p + vat on our fuel cards this week, works out about £1.12 a litre absolutely loving the savings, bear in mind we only run a couple of taxis i would imagine your likes of stobarts and so on will be saving millions a week in comparison
Thats more expensive than you could just get normally at ASDA or BP via Amex
find me a supplier of bp or shell diesel for less £1.12 a litre and hit me up
asda is 117.7 and the cheapest within 20 miles is an esso in Bonnybridge at 115.7 (petrolprices.com) and in fairness i wouldn't put asda supermarket fuel near any of our cabs through personal choice, much happier running BP fuels