Co Down native Brian Donaldson studied business in Bradford University and had ambitions of becoming a chartered accountant. After graduating, however, his father suggested he should apply for a graduate trainee position in the Maxol forecourt business, owned by the McMullan family. Donaldson’s application was successful and he was offered one of two positions available.

“Back in the 80s, there wasn’t a lot of jobs going and it was a particularly tough employment market,” says Donaldson.

He joined the company in 1986 as a graduate employee and climbed the ladder to become the CEO of The Maxol Group.

“I was brought in to do some market research for the company in conjunction with Queen’s University on their profiling of customers and demographics. And then after six months, they decided they would keep me on a permanent basis,” says Donaldson.

“I became a regional manager for greater Belfast, working with retailers in terms of the company and operations. And to be quite honest, I’ve nearly done every job that’s been going in the business over those 34 years, which I never, ever envisaged being with the one company,” he adds.

The company currently employs over 1,000 people across its 237 forecourts based in the North and the Republic of Ireland. Company profits hit €17.8 million in 2019, up 14 per cent from €15.5 million on the previous year. This figure is set to take a hit in 2020.

“It is going to be well back on what we achieved in 2019,” says Donaldson.

The business was set up in 1920 and is Ireland’s largest family-owned forecourt. Although it is celebrating its centenary this year, it has certainly tried to keep up with the times. With Donaldson at the helm since 2016, the oil company is buying up other sites including three Esso stations, launching environmental initiatives, entering into partnerships and investing heavily on other services apart from its oil and fuel offering.

Why is Donaldson pursuing these changes? With the shift to alternative fuels and electric vehicles on the horizon, forecourts must change the way they currently do business. However, Donaldson does not just want to focus on the fuel side of business though. He wants forecourts to become a one-stop-shop for people in the local area for their essential needs. In a recent press conference, he even suggested that forecourts should consider offering services like dry cleaning.

“What we’ve been trying to do is not be perceived purely as a fuel centric brand, but to become much more in terms of convenience for your everyday essentials, for your coffee, for your food service and other services we can add to that,” says Donaldson.

Maxol has invested significant amounts over the past few years to implement this change in vision. Last year alone, the company invested €32 million on its sites on the island of Ireland. This year, the investment by the company will reach €20 million and Donaldson has decided to hold off from committing to any new projects until late 2021 or early 2020 due to the impact Covid-19 has had on retail.

“Normally, what we try to do is dispose of the weaker assets and reinvest in the other assets where we have opportunity to grow and expand that. It’s just a basic business principle.”

Brian Donaldson

“What we’re trying to do is put Maxol in the minds of our customers. That we become their first choice for all of their needs. In other words, we just aren’t the first choice for fuel. We want to be their first choice, be that for their top-up shopping, be that for their alcohol, be that for their coffee, be that for any of the food service options we can do,” says Donaldson.

The evolution of Maxol has placed a huge emphasis on its food offering. In 2019, Maxol’s ratio of fuel to food was at about 60:40 and in 2019, that has shifted nearer to 50:50. It also launched its own brand range with €2 million in sales in one year alone, with the most popular items being milk, water and sandwiches. Maxol’s coffee brand, ROSA, also brought in sales reaching €8.5 million for 2019 and the company projects similar sales for 2020.

“You’re probably going to buy fuel twice a week. But if you’re going to come in for the store, whether that’s for your breakfast, whether it’s for your lunch or whether you’re looking for a meal, you’re going to do that probably three times a day. So, you have much more opportunity in terms of trying to capture that share of wallet,” says Donaldson.

To achieve this new vision for Maxol, more is needed.

Why location is everything

Donaldson said Maxol is placing significant emphasis on either finding new strategic locations, which are easy to access, have more room for parking, particularly for heavy goods vehicles, or developing on existing locations.

“Space will always continue to be a prerequisite. What we’ve been doing over the last 10 years with those sites which are too tight for space and those sites where we can’t acquire more land, their future is probably going to be much more risky, much more challenging,” says Donaldson.

“Normally, what we try to do is dispose of the weaker assets and reinvest in the other assets where we have opportunity to grow and expand that. It’s just a basic business principle,” says Donaldson.

The company has already sold some its sites, including its station in Sandyford Co Dublin, which will now be converted into apartments. Meanwhile, money has been plunged into redevelopments of other sites while also opening new stores. In March 2020, when Covid-19 had just hit the country of Ireland, Maxol opened a new station in Rathnew in Co Wicklow, its first greenfield station since 2016. This prokect cost €3.75 million and created 20 new jobs. Maxol Rathnew opened in the early days of the pandemic in Ireland with immediate modifications being made to the premises. A further €14 million investment is planned for 2021, which will see the conclusion of this phase of the company’s Capex programme.

Since 2012, the company has invested almost €200 million in both new sites and the redevelopment of its existing network.

There are several reasons for this desire for space. Firstly, larger spaces will entice more heavy goods vehicles to use the forecourt.

“We don’t encourage heavy vehicles coming into neighbourhood type locations because they take up too much space and because it causes heavy congestion,” says Donaldson. As most Maxol stations are located in towns and residential areas, this makes it harder to draw in HGV drivers for business. On the other hand, having these stations in local areas was a boost for Maxol during the pandemic.

Secondly, the demand for space in the forecourt industry will increase due to the introduction of hydrogen as an alternative fuel.  Hydrogen pumps and diesel pumps cannot be located close to each other for safety reasons. Which is why there will be forecourts designed specifically for vehicles that use hydrogen and more traditional forecourts.

Hydrogen Mobility Ireland projects that there will be 80 hydrogen filling stations by 2030. The group made up of industrial and governmental representatives including Bord Gáis Energy, Toyota Ireland, CIÉ Group, Hyundai Ireland, and government departments from both north and south of the Border.

“We still have to service that fleet, which will be in the market for quite some time beyond 2030 in terms of internal combustion engines, which will still need diesel and certainly need petrol.”

Brian Donaldson

“It’s [hydrogen] probably at the very early stages in terms of being introduced into heavy fleet. And it probably will take another five or six years before it gets to a certain momentum,” says Donaldson.

When the shift to hydrogen and electric vehicles becomes more mainstream, there will have to be significant infrastructure and charging points which is where the community forecourts will be of value.  

“We can provide that service because not everyone has room to park their car or to charge their car at home, particularly if they live in apartments or if you live on the edge of the street. So really what we’ve been looking at is how can we provide that service at an affordable cost,” says Donaldson.

Donaldson is not too worried about the switch to alternative fuels just yet in his business as he says the current fleet of vehicles on the road using petrol and diesel will still need to be catered for.

“We still have to service that fleet, which will be in the market for quite some time beyond 2030 in terms of internal combustion engines, which will still need diesel and certainly need petrol. I’m a great believer that our liquid fuels will continue to evolve and the amount of biofuels and noncarbon additives will continue to increase, also helping to reduce the carbon footprint,” says Donaldson.

“So I think it’s a journey we all have to watch, and it’s a journey that we all have to continue to decide when is the right time to invest,” says Donaldson.

Donaldson states heavily investing in electric vehicles right now is not practical for those that drive frequently and build up high mileage.

“I still think there’s a lot of work and there’s a lot of investment still needed by car manufacturers, by the state and by private businesses like ourselves to be able to put the right infrastructure in place,” says Donaldson.

“It’s early days. It’s a tough sector. We’ve recruited over 6,000 customers in a short period of time and we want to grow it in three years to 25,0000. It’s going to take a lot of time, a lot of effort, a lot of investments and a lot of hard work.”

Brian Donaldson

“It’s anyone’s guess how quickly that transition will happen. But certainly, we watch this day in, day out, and we stay very close to what’s going on in terms of the legislation, particularly with emissions, which will impact car manufacturers. We also work very closely with UCD in terms of their mechanical engineering department to keep us abreast of what’s going on with those technologies,” adds Donaldson.

Thirdly, the need for more space has been accelerated by the change in consumer behaviours brought on by the pandemic. Many people have opted to buy online now. If a forecourt like Maxol wants to continue a successful food offering, it will need the space to do so in a digital and competitive world.

Energetic ventures and new partners

This year, the oil and fuel company Maxol decided to enter into a partnership with Bright, a 100 per cent green energy company founded in partnership with energy entrepreneurs Ciaran and Stephen Devine of Evermore Energy.

While the Devine’s marquee project is the £83 million Lisahally Combined Heat and Power Plant – Ireland’s largest renewable energy power station – it also has active interests in energy storage, data centre development, energy generation and electric vehicle charging -projects across the island of Ireland.

Bright enables people to manage and pay for their energy by using a software platform and app. It will offer one tariff and provide customers with affordable green electricity. The initiative offers annual savings of up to 23 per cent or €225 on an average annual household bill. The announcement marks Maxol’s move into the green energy sector.

“Bright energy was meant to have been launched three to four months prior to what we were able to do. That was just getting through all of the processes and getting it ready. Just Covid and all of the restrictions did cause a number of delays,” says Donaldson.

The impact of Covid-19 also impacted the introduction of Maxol’s of own brand premium fuels, which will be launched this year.

Bright energy is an equal joint venture between the McMullan family and the Divine family which aims to sell electricity to the domestic market in Northern Ireland and the Republic of Ireland.

“It’s early days. It’s a tough sector. We’ve recruited over 6,000 customers in a short period of time and we want to grow it in three years to 25,0000. It’s going to take a lot of time, a lot of effort, a lot of investments and a lot of hard work,” says Donaldson.

*****

Maxol also partnered with AirSpeed Telecom to deliver enhanced cloud connectivity service to support Microsoft applications in recent weeks.

AirSpeed Telecom has worked with the Maxol Group for the past four years. It is currently providing an ExpressRoute service to Microsoft Azure, through Maxol’s new Cloud Connectivity service.

This has resulted in faster connection with superior data privacy and security. The Maxol Group is also experiencing improved performance, security and user experience for employees and retailers when using Microsoft applications.

“We are moving more of our applications and services off-premises to the cloud and we have chosen AirSpeed Telecom once again to support us on this migration, using their Cloud Connectivity service to peer directly into Azure. This has made a huge difference in terms of how we run our business,” says Head of IT at Maxol Stephen McCormack.

Change in consumer behaviour

Digitising the retail experience is also at the core of Donaldson vision for his forecourt business. The impact Covid-19 has had on consumer behaviours has amplified this push to introduce the latest technology into retail, states Donaldson.

“E-commerce is certainly growing. E-commerce transactions actually exceeded the physical purchase in-store. People are changing and the pandemic has accelerated the change. And I don’t think people will go back to their old ways because we got used to the new behaviours,” says Donaldson.

“One of the things that stands out for me through the pandemic has been the adaption of technology and how much business has moved to click and collect, how people are using technology to remove that friction, both in terms of the time they have to spend in the store or even the methods that they have to use for payment,” he adds.

To keep up with the digitalisation of retail and to compete with larger supermarkets, forecourts will need considerable space for parking for shoppers as well as bays and areas where people can collect their pre-ordered goods.

“One of the things we saw as a big change, in terms of how we do our own shopping, we order online now. It’s click and collect. So, you need the space, you need a bay. Even in terms of how you set up your store to be able to do that click and collect type service means your stores are probably going to be bigger or you might even go into, let’s say, a dark type operation in certain locations,” says Donaldson. Dark operations are fast becoming popular among restaurants. This model is used purely for takeaway and delivery services. Donaldson believes the same principle can be applied to retail.

Retail will never stop changing and its operations vary across the globe. That is why one of the ways to ensure your business thrives is to travel, states Donaldson.

“There are other countries which are probably ahead of us in terms of new technologies, maybe on fuels, maybe even in terms of technologies that they’re using to personalise and improve the customer experience,” says Donaldson.

For example, while Donaldson was visiting Hong Kong, he saw how people are using technology to strip the customer experience back to basics and remove the inconvenience from convenience shopping. There was a focus on reducing queues by making sure that people have apps on their phones where they can place their order for their coffee or for their sandwiches, pay for it, and then picking it up whenever it suits them.

“One of the things I’m a great believer in is retail will be at different points of a life cycle across the globe, and therefore it’s very important to travel whenever we are allowed to again and see how different businesses have got to different points in the life cycle. I think Europe and the UK and Ireland are certainly way ahead of most parts of the world in terms of food service, food preparation and standards,” says Donaldson.