The Irish boss steering Circle K through Brexit and a pandemic
Gordon Lawlor is in charge of the country’s largest chain of fuel retailers at a particularly tricky time
Gordon Lawlor, CEO of Circle K, says forecourts will drive retail footfall by installing services such as off-licences, parcel pick-ups and washing machines. ‘You will see forecourts continually expanding the range of stuff they sell.’ Photograph: Dara Mac Dónaill
Arms folded on his chest, face beaming, Circle K managing director Gordon Lawlor strikes a pose for The Irish Times photographer outside the fuel group’s huge outlet in Dublin Port. The problem is that, unwittingly, he is standing in the path of cars trying to exit the forecourt. They start queuing up.
Lawlor belatedly realises that he has an audience. He raises his hand in apology to the driver at the top of the line, and steps out of the way. The driver, beaming even more widely than Lawlor, seems only too delighted to have been held up for a photoshoot and rolls down his window as he crawls by.
Then the driver dissolves into laughter: “Ah Jaysus, I thought you were the new Ireland football manager!” Lawlor is delighted with the comparison, his eyes twinkle and his grin widens further to unleash a belly laugh.
It is a nice moment between two strangers that bridges the standoffishness that has become so common in the pandemic, when such spontaneous interactions are rare or hidden behind face masks.
There is a very slight resemblance – similarly cropped fair hair and athletic build – between newly appointed Ireland manager, Stephen Kenny, and the fuel group executive, who in his sharp suit and no tie wouldn’t look out of place pacing a touchline. The similarities between them don’t end there. Kenny and Lawlor also share a birthday at the end of this month (the Ireland boss is three years older). They are both proud and unassuming sons of Tallaght, the sprawling west Dublin suburb. And, in their respective fields, they both bear national responsibility at a time of great uncertainty.
“It is impossible to predict anything with the pandemic, and with Brexit. We still don’t know what impact it is going to have on operations here at Dublin Port,” says Lawlor, who must also guide Circle K as the Government shows its determination, on display in Budget 2021, to shrink fossil-fuel usage.
He runs the country’s largest chain of fuel retailers, with a network of 410 Circle K forecourts on the island – more than a fifth of the total – 2,300 staff and operating profits of €320 million in 2019.
Fuel sales dipped by as much as 50 per cent during lockdown, but Lawlor said it will finish the year with a topline reduction of only about 10 per cent. That picture could worsen if the State moves to Level 4 or 5 restrictions.
He took over 14 months ago as managing director of the business, which includes 160 Circle K outlets owned and operated by the company and 250 independent retailers in its “dealer network”. These are essentially fuel franchisees, who agree to buy their petrol and diesel from Circle K and operate under its distinctive red forecourt canopy with its Miles fuel pumps.
It is also one of the State’s biggest fuel importers, with terminals at Dublin and Galway, and is the largest aviation fuel supplier.
With fuel margins shrinking, forecourt fuel retailers also usually operate a convenience store brand in the “box” beneath the canopy. Circle K’s 160 company sites bear its own shop brand over the door, while its dealer networks mostly operate other brands. The company is pushing to expand its retail network, and hopes have about 10 convenience store franchisees by the end of the year.
“The plan is to have around 100 retail franchises within the next three years, and we are open to looking at any potential acquisitions,” says Lawlor.
Circle K is owned by the Canadian-listed global group, Alimentation Couche Tard, which bought it as Topaz from Denis O’Brien for €258 million in a cash deal almost five years ago.
The Irish forecourts market had consolidated over the previous decade, and Topaz had been waiting on the all-clear from regulators on a deal to buy Esso, where Lawlor worked, immediately before a secret deal to sell the whole lot to the Canadians.
“I was on the negotiating team for Esso when it was being bought by Topaz. We waited a year for Competition Authority approval. It came through and there I was, on the first day of my induction up at the Topaz headquarters in Clonskeagh. Next thing you know, a van pulled up outside and all these guys from Couche Tard jumped out of it. They said they had just bought Topaz. That was how I found out.”
Circle K’s Dublin Port outlet, which sells about 15 times the fuel of a typical forecourt, hums on the day of our visit with articulated lorries fresh off the boat and in need of a fill in the special truck plaza out the back. For car drivers, it is seeking to expand the network of electric vehicle (EV) charging points – it has deals with ESB and Ionity, a European collaboration of EV manufacturers.
Lawlor strides across the concourse to show me the latest high-speed charger it has installed onsite. It is hooked up to a brand new white Tesla, the EV marquee founded and run by oddball genius Elon Musk.
“That’s mine. I only got it a week ago,” says Lawlor. For a purveyor of petrol and diesel, he is trying his best to show enthusiasm for the EV revolution. So ... do you like driving it? “Yes it’s nice. I’m very new to it,” he says, his voice trailing off a bit. With four kids, he might have to strap a couple on to the roof of the Tesla to go for a family drive.
“The Government wants one million EVs in Ireland by 2030 but it isn’t going to be possible to hit that target,” he suggests.
He says there are currently only about 20,000 EVs and even when the economy was flying, Ireland only sold 100,000 new cars each year. In the meantime, he spies an opportunity for emissions reduction in increasing the level of non-fossil fuel additives in petrol and diesel.
Irish diesel is actually 7 per cent used cooking oil, while petrol is typically about 5 per cent ethanol, a form of alcohol that is also used to make hand sanitiser. Lawlor would like to see the proportions of both rise to make petrol and diesel less damaging.
“We could go to 12 per cent and beyond on diesel. There is headroom to move to E10 (10 per cent ethanol) on petrol. We’d need to work with the refineries. A lot of petrol comes from UK, which is due to move to E10 and that means refineries there will also move to it. That will be handy.”
In theory, in future, the vast majority of EV drivers will charge at home at night. They’ll have a full battery when they wake up in the morning
Lawlor knows his fuels. He was fuels director at Circle K immediately prior to succeeding Niall Anderton at the helm in August 2019, and in one way or another, he has been in fuels and convenience retailing for his whole career. After leaving school, he did business studies at the local institute of technology in Tallaght, and made extra cash by working two weekend shifts in the local Esso.
After a master’s degree in the UCD Smurfit business school, he taught business subjects for two years to school leavers in Ballyfermot Senior College. “That was cool. I loved it and when I retire, I will go back to the teaching.”
Lawlor harboured a desire for some real-world business experience, however, and he left teaching to work as an analyst for Esso. He entered its graduate programme, eventually working his way up the ranks through various roles in Ireland, Britain and Belgium, before returning to Ireland just as the Celtic Tiger was dying over 12 years ago.
He was chairman of the Irish Esso fuels operation, while also working as head of convenience retailing for its 1,000-strong network in the UK. Then along came Topaz, and then (suddenly) Circle K.
And now, after starting out on the Esso nightshift as a student more than two decades ago, he runs the entire operation of the biggest player on the island.
As official policy tries to dampen fossil-fuel sales in favour of EVs, it poses an obvious threat to the operations of Circle K and other forecourt operators, who rely on petrol and diesel sales to drive footfall into their shops.
Lawlor believes that if fuel pumps disappear from beneath canopies, they could function as car parks instead, to bring custom into the shops
“In theory, in future, the vast majority of EV drivers will charge at home at night. They’ll have a full battery when they wake up in the morning. It is only when they are travelling long distances will they need to top up their batteries.”
This means that the jewels in Circle K’s crown are its 15 or so huge motorway service outlets dotted around the country, as these sites will still be frequented by EV drivers in the future. On these sites, the company also effectively acts as landlord to fast food brands such as McDonald’s and Camile Thai.
When Lawlor started out in the business, operators derived most of their revenues from fuel retailing, but now it accounts for less than 40 per cent of income in most forecourts, with the real profits made in the convenience store “boxes”. Lawlor believes that if fuel pumps disappear from beneath canopies, they could function as car parks instead, to bring custom into the shops.
“You will see forecourts continually expanding the range of stuff they sell. Now you see off-licences, whereas you couldn’t have seen those a few years ago. We sell a top-up grocery range. There is usually a sit-down area, while food and coffee are the two most important things now that we sell.”
The 100 or so retail franchises that Circle K hopes to roll out in coming years will all feature its Simply Great Coffee offering, as well as its deli or hot food counters, and they will ape the look and feel of its company-operated stores.
Lawlor says forecourts will continue to try to drive more retail footfall by installing services such as parcel pick-ups and washing machines. “Customers put their clothes in the washing machine and it takes, say, 20 minutes. So what will they do for that time? They will go in and buy a coffee and a newspaper in the box and sit down and relax. That’s the theory.”
During lockdown, as its fuel revenues dipped by more than half, Circle K even turned its forecourts into temporary garden centres, buying up stock such as bedding plants from garden centres that were closed due to the Government restrictions. Forecourts and convenience stores were allowed to keep trading through lockdown, although restricted retailers eventually complained to the Government when they saw their non-food wares being sold by rivals.
Just seven staff out of Circle K’s 2,300 employees have caught Covid-19 in the last seven months. “It is tough to wear a face mask for eight hours on a shift. But it shows that if we follow social distancing and all the safety rules stringently, you can keep a limit on the spread in operations such as ours,” says Lawlor.
Pandemic aside, he remains focused on steering the group through Brexit .
Despite being already the largest player, Lawlor is also determined to grow Circle K’s network. In fuel retailing, it seems he is on a never-ending drive to do more.
Age - 45
Home - Raheny in Dublin
Family - Married to Audrey with four kids, Beth, Megan, Archie and Anna
First Job - Night shift at local Esso service station in Tallaght
Something about him that might surprise - He drives an electric vehicle
Something that we might expect - He eats his lunch daily in Circle K stores