Slim margins for servos
A new report has confirmed that the urban myth – that Australian petrol stations survive on bread and milk, rather than petrol and diesel, is true.
The report – Directions in Australia’s Automotive Industry was compiled by the Motor Trades Association of Australia (MTAA).
It found, perhaps not surprisingly, that the car industry is a major contributor to the Australian economy (check out more details here).
But one interesting finding that we thought deserved some separate coverage was the margins with which service stations/fuel retailers operate.
It was found that in the fuel retailing sector the margin was just 2.4%.
That means for every dollar that you spend at your local servo on fuel, just 2.4 cents go to the owner.
Related: Car Industry – We Can Do Better
To put that in perspective, profit margins for repair/maintenance businesses in 2015/16 was found to be 12.2% (a figure that’s also not substantial).
While the anecdotal ‘rule of thumb’ when it comes to the profit margin in retail is up to 30%.
So, next time you fill up at your local service station, remember that it’s that bottle of cola, packet of chips, or loaf of bread that you purchase that’s primarily paying the outlets bills.
- Do you own a service station? Is it tough making a profit? Is that 2.4% figure accurate?
- Who’s making all the money on the fuel?
- Are you afraid that an increase in electric vehicles will be detrimental to your business?
We’d love to know what it’s like being on the other side of the counter. Leave your comments below or send us an email – firstname.lastname@example.org.