Wednesday 21 August 2019

Maxol chief: Plenty of miles left in diesel cars despite green revolution

As electric vehicles are developed and customer priorities switch from fuel to food, the family-owned forecourt firm still has right ingredients for future success CEO Brian Donaldson tells Ellie Donnelly

Switched on: Maxol boss Brian Donaldson says the company is prepared to meet any substantial growth in customer demand over electric vehicles. Picture: Arthur Carron
Switched on: Maxol boss Brian Donaldson says the company is prepared to meet any substantial growth in customer demand over electric vehicles. Picture: Arthur Carron
Should you take the plunge now or should you await developments for another couple of years?
Ellie Donnelly

Ellie Donnelly

Diesel is not dead, despite the move to a green wave of vehicles, argues Brian Donaldson, the CEO of the Maxol forecourt business. With environmental issues increasingly coming to the fore, some people are turning to electric or hybrid electric vehicles.

Electric vehicle sales in the first four months of this year totalled 1,731, an increase of 308pc on the same period in 2018, according to figures from the Society of the Irish Motor Industry.

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"Certainly, electrification is going to have a role to play," Mr Donaldson says, "you can see the rapid increase in EV sales.

"From our perspective, it's knowing when to make a heavy investment, and who to invest with."

"People are writing the obituary of diesel. Yes, it has come through a very tough time, but I still believe it has a role to play," says Mr Donaldson.

He points to the fact that there are huge numbers of imported cars coming in from the UK at the moment, which are largely diesel, he says.

As well as this, the softly spoken man, whose accent is difficult to place, says that "for now" he can't envision electric vehicles being used for long-distance haulage.

The Co Down native, who comes from "agricultural country" maintains that for many people in farming areas, diesel will remain the number one choice for some time.

"There is a long way to go in the electric vehicle space yet," he says, adding that it is an area that Maxol are monitoring.

The group plans to pilot electric vehicle charging facilities in up to six of its forecourts this year.

These forecourts will be located in cities, "where electrification is likely to adopt much more quickly".

"From our perspective, we will give our customers what they need, if there is a growing demand for electrification on our sites then we will make those facilities."

Today there are 231 Maxol service stations on the island of Ireland, with 115 of those owned by the company.

It aims to have more than 120 company-owned sites by 2020.

The group, which was founded by the McMullan family almost a century ago, is moving more focus on its non-fuel offering.

In the last 32 years, Mr Donaldson says the biggest change has been how the forecourt was once all about fuel, "now it's all about the services and convenience that you offer, and this very much in terms of our own strategic plan".

Mr Donaldson says food shopping has become about "local convenience".

"[Shopping] is about little, often and local, and those are the three things which are the biggest changes in consumer behaviour."

In comparison, people buy fuel "once or twice" a week.

At the moment fuel accounts for around 55pc of the revenue, while non-fuel items such as milk, bread, coffee, accounts for 45pc.

"We have to continue to invest in the [non-fuel] offer."

For a man whose career has revolved around oil, he talks passionately about the fair-trade coffee brand, Rosa, which Maxol developed with Bewleys.

"What we are seeing is if you get your coffee offering right you start to build up quite a large following for your brand. We are seeing double-digit growth in terms of our coffee following."

Across the Maxol chain the group will, in the coming months, be rolling out changes to the stores in terms of product offering, lighting, and even aisle space in order to improve shopper experience.

The company wants its forecourts to be a place where people go to pick up food, whether it is a ready-made meal or ingredients to cook with.

"Programmes like 'MasterChef' or the 'Great British Bakeoff 'mean there is a massive resurgence in terms of how people feed themselves, massive pride in terms of doing that. My two girls, my wife and daughter, are big fans of home cooking," he says.

"We want people to be able to get the ingredients in our shop."

As part of its development in the convenience foods space, the group is currently in the process of launching own-branded products such as milk, pre-pack salads, solid fuel and other items.

This ability to adjust when faced with changing consumer preferences and behaviours has helped ensure the family business, which has been around for almost a century, has remained successful, while competitors down through the years have either exited the market, or been taken over.

With the business now in the fourth generation of the family, and I ask if he thinks the McMullans would consider selling any time soon?

Smiling, he says he has been asked this question since he joined the group as a graduate in 1986.

"The family are very involved," he says, adding that the current generation view themselves as custodians of the business for the next generation.

"We have seen so many competitors in this space come and go, at this point we are the longest Irish brand in the space, and we are very proud to be an Irish brand."

Looking backwards before looking forwards, Mr Donaldson says that a few years ago he stood up in Croke Park - just a stone's throw from the office - and presented a strategy to employees that laid out the company's plans to 2020.

He says he is now working on a plan for the next three years.

The 53-year-old has been with the Maxol group since he graduated from college. Does he view his lack of outside experience as a disadvantage?

On this, Mr Donaldson firmly disagrees, "I've been quite fortunate in that I have always changed roles within the group every three to four years" he says.

"If anything you start to understand the culture and the values of the business."

Before we finish up, the talk turns to Brexit.

With the company operating on both sides of the Border, and Mr Donaldson himself spending several days a week commuting across it, it's a topic that is close to his, and Maxol's, heart.

"We have had team working on this for the last 18-24 months," he says.

The main worry for the group would be around delays in the delivery of fresh produce onto shelves.

However, he thinks there will be a soft Brexit.

"It's been one of those frustrating items on the agenda since the whole thing kicked off in June 2016."

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