Pipeline Fuel Cards 426

On Sun, 30 Jul 2006 21:10:14 +0100, SteveH was popularly supposed to have said:

The idea, I think, is to get one retailer to sign up to Pipeline and then all the Pipeline subscribers get discounts, and the retailer gets a huge boost to sales.

The problem is, margins for retailers are already really, really tiny. Why do you think almost every petrol station has jetwashes, a mini-supermarket, off-licence and whatnot attached to it?

Easy answer: the stuff I mention above has a much bigger mark-up than selling fuel does.

These guys are taking the place of the old corner shop by being jacks of all basic goods, and flogging fuel to get the punters to actually come to the corner shop. All the fuel's there for is to pull in the punters.

This being the case, it probably doesn't feel like a good deal to back Pipeline, for several reasons.

Firstly, what good is reducing profits going to do? People on the whole don't shop around for fuel because there is not much variation in the market. Pipeline's huge customer shift isn't a proven fact yet.

Secondly, the outfit is a tinpot amateur website. It isn't big business. It doesn't smell of money. It smells of amateur pillock trying it on for cheap fuel, and that just isn't credible.

Thirdly, what do you think will happen to supermarket fuel prices if a huge compebreastor decides to drive down the price of fuel retail generally?

Easy: the supermarkets cut their prices even more. They can afford to use fuel as a hook to pull in family shoppers, and actually sell at a loss because of the profit they make on gorceries and whatnot.

This being the case, starting a price war you cannot win isn't smart.

Pipeline was a nice idea, but they look to be doomed.

-- By caffeine alone I set my mind in motion, By the beans of Java do thoughts acquire speed, hands acquire shaking, the shaking becomes a warning, By caffeine alone do I set my mind in motion