Operating a successful service station network has always been about more than just selling fuel. For Ben Dunn, Managing Director of The Dunn Group, it is about building strong customer relationships, keeping stores secure, and continually adapting to an evolving retail landscape.
With ten sites across QLD, a mix of BP, Shell and Ampol locations, Ben has seen first-hand how the challenges facing independent operators have shifted over time. While fuel pricing and staffing have always been front-of-mind, recent years have brought an even greater focus on security and compliance, particularly in the sale of tobacco products.
Tobacco Changes Reshape the Market
“The biggest change we’ve seen is in tobacco,” Ben explains. “We’re carrying about a fifth of the cigarettes we used to and seeing a 60 percent drop in sales. It’s frustrating because it’s not just the sales of cigarettes we lose. Those customers also buy drinks, snacks, maybe a scratchie or a coffee. When you lose them, you feel it across multiple categories.”
Ben points out that illegal tobacco sales are hurting legitimate operators. “Some smaller retailers are selling illegal tobacco because they feel they have no choice. If you lose 50 or 60 per cent of sales in a department that used to be 30 per cent of your total, it’s hard to survive. I’m not condoning it, but I understand the temptation for these retailers.”
New tobacco licensing laws have been introduced, but Ben is sceptical about their effectiveness. “The people selling illegal tobacco don’t have licences anyway, so what’s the point? Until penalties are significant and enforced quickly, it’s not going to deter anyone.”
Fuel Quality and Fair Competition
Ben is also vocal about the need for regular, transparent fuel quality testing across the industry. “I wish the government would put more money into testing 95 and 98 octane fuel at every service station and make the results public. In the food industry, through regular local Council inspections, if you do not meet the minimum standards and repeatedly do the wrong thing, your business is publicly named on a register, so basically, you’re named and shamed. Once this happens, behaviours will change very quickly. Do the same with fuel. If you’re doing the right thing, you’ve got nothing to worry about.”
He believes that such transparency would level the playing field for operators who meet the standards but compete against suspiciously low prices over long periods of time. “We all have similar operating costs. If someone can sell fuel well below cost for long periods, something’s not right.”
Security as a Deterrent
Security has always been a priority for The Dunn Group, and it was a key driver for adopting VDMS cigarette dispensing machines. “We put our first machine in at Auburn about five or six years ago, mainly for security and stock control,” Ben says. “If someone is targeting tobacco, they’ll come in, see the VDMS cigarette dispensing machine, and move on to an easier target.”
VDMS keeps stock secure and in an environment that satisfies insurers. They also make day-to-day operations more efficient. “It’s much easier to do a stocktake, and the integration with our POS makes it simple for staff,” Ben adds.
Currently, four Dunn Group sites use VDMS cigarette dispensing machines, all installed under-bench rather than as digital display units. “We’ve already invested in our own screens behind the counter for promotions, so for us, VDMS is purely about secure storage and operational control.” For those retailers who haven’t already invested in digital signage, the VDMS cigarette dispensing machines secure your stock while also providing space to promote products and specials directly in the customer’s view.
Competing Beyond Price
In a market where aggressive fuel discounting is common, Ben prefers to focus on service and store quality. “We’ve tried dropping fuel prices to match the cheapest in the area. Sure, fuel sales jump 40 to 50 per cent, but shop and café sales go backwards. The customers you attract with cheap fuel often don’t buy anything else.”
Instead, The Dunn Group invests in a premium convenience offer. “Clean toilets, great customer service, good food and coffee, that’s what keeps people coming back. You can’t always win on price, but you can win on experience.”
Staffing Challenges
Like many in retail, staffing remains a challenge. “We’ve got a lot of people who’ve been with us 10 to 15 years, but younger staff can be hard to retain. Some see it as a short-term job, and you can spend thousands on training only for them to leave in six weeks.”
To address this, Ben has a dedicated People and Culture manager focused on engagement. “Her role is not just HR; she checks in with staff, sees how they’re going, and keeps them connected to the business. It’s a full-time job when you’ve got 170 staff.”
Investing in the Future
Despite market pressures, Ben continues to invest in his sites. “We’ve got a new build underway in Orange and two major renovations coming up: BP Wentworth Falls and BP Katoomba. It’s important to keep stores looking fresh and up-to-date, especially with so many new sites being built. Customers notice when a site looks tired.”
Renovations include new fuel systems, shop fitouts, and upgraded food and coffee offers. “In regional areas especially, a well-presented site with great service can really stand out.”
Advice for Other Operators
For Ben, success in the current market comes down to focusing on the basics and protecting what matters most. “Secure your high-value stock, invest in your people, keep your sites clean and welcoming, and deliver a quality offer. Tools like VDMS help take one of the biggest risks, tobacco theft, off the table. That lets you focus on the parts of the business that keep customers coming back.”
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