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Petrol station retail chain project in Russia suspended by investor

Retail

The Russian grocery retail chain Paterson, which has been working on the establishment of a petrol station convenience store chain for nearly two years, has decided to put the project on hold.

According to a newspaper, the company explained the decision was precipitated by complications which have arisen in negotiations with its potential partners - oil companies that have decided it was best to open their own stores at their petrol stations. According to experts, the creation of a petrol station retail chain was faced with technical difficulties that jeopardized the project´s financial viability, for which Paterson was simply not prepared.

As it turned out, the construction of stores at filling stations in this country is encumbered with technicalities. In addition, petrol station convenience stores are usually not very cost-efficient, due to low volumes and a high markup. The average sales of a petrol station in Moscow amount to nearly $3 million-$3.5 million per year. A convenience store with an area of no less than 100-150 square meters adds another 10-20% to the petrol station´s revenue.

Consequently, a successful retail outlet could earn a maximum of $600,000-700,000 per year, with the retailer forced to pay nearly half of this sum in the form of environmental and fire safety costs. (petrolplaza)

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