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UK Retailers Suffering

LONDON -- If the European market is any indication of trends headed for the United States, retailers should be concerned.

Fuel stations in the UK are shutting at an increasing rate as petrol sales decline and retailer margins stay slim, according to an industry survey. In 2001, UK closures totaled 842 or 16 per week, up from 13 per week in 2000, Petroleum Review's 2002 UK Retail Marketing Survey showed.

"It's reaching a stage in the UK where the ongoing slaughter of forecourts has got to be addressed," Ray Holloway, president of the Petrol Retailers Association, told Reuters.

The survey found sites owned by major oil firms decreased by 201 while the majors' branded sites dropped by 500 or almost a fifth. In contrast supermarket sites increased by seven to 1,036 in total, though they increased by 105 in 2000, with unbranded sites increasing by just one.

"It's not exactly an industry people are jumping into," said Holloway, who added retailer margins are too low in Europe to sustain independent forecourts. Petrol sales in the UK also continued to decline in 2001, having fallen every year since 1992.

Retailers were also hit by fuel tax protests in Britain in 2000, which led to a number of closures. British motorists pay the most tax on gasoline in Europe.

"There is a fight between the majors and supermarkets for market share -- the forecourts of both are underpinned by other parts of their business," said Holloway.

The company with the most UK forecourts is Texaco, which bucked the trend by increasing its number by 64 to 1,543, the survey said. Other majors Esso, BP and Shell reduced their branded sites but retained well over a thousand each.
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