Retail Accounting

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Petrol prices and the Forecourt Retailer

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Although fuel profit margins are often agreed in terms of “pence per litre” (or cents per litre) guaranteeing the retailer a fixed margin if target volumes are met the pole price of the fuel is critical for the volumes sold. Most retailers will confirm that customers are highly price sensitive and a 1 pence difference between neighbouring service stations can be enough to persuade customers to drive an extra few miles for cheaper fuel, even if the cost of driving the extra miles may be more than the amount sales.

Generally lower pole prices mean higher volumes but the current economic situation is making trading ever more difficult and a report from the AA indicates that sales are declining despite lower forecourt prices.

Click on the link below for the full article on the BBC News website.

http://www.bbc.co.uk/news/business-19810276

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Author: retailaccounting

CounterBooks is an online retail accounting management suite which is used by retailers across the world.

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