Ultimately, almost everything we knew about petrol stations has changed, at least not the filling up our tanks part. Forecourts are clearly offering way more these days, it isn’t just about fuel stops anymore. These places have been evolving recently into high-margin impulse locations. Given their long operating hours, usually 24 hours, (captive dwell time) the duration an audience is forced to remain in a specific location and a varied consumer base, the placement of these forecourts is deliberately done to monetise impulse behaviour.

Trade Intelligence gave us their latest report, on Forecourt Retail Report, shedding light on an outlet that is under pressure, however, keeps adapting. Forecourts are seen as dynamic convenience centres, allowing partnerships and various services and products to keep margins and demonstrate new expansion. Fuel once dominated and defined the forecourt; not so much anymore.

Looking beyond the fuel: Understanding foot traffic dynamics

According to the research conducted by Trade Intelligence it says, while fuel numbers have declined by 6.3% over the past year, the number of South African forecourts has grown by +12% over five years. Trade Intelligence Forecourt Report went on to say it is estimated that Forecourt Retail Convenience sales accounted for R33 billion in sales. The report shows that 75% of surveyed shoppers intend to keep or increase their visit frequency to this channel, highlighting its growing relevance to shoppers and consumers.

Daily Investor journalist, Kirsten Minnaar, pointed out a gradual growth, which is influenced by the changing consumer needs and demands. Safety, speed and convenience are what shoppers look for now, more so while commuting and during late nights. Many forecourts across the country have responded to this, very well by expanding their product variation and providing more options like grab and-go, healthy-for-you snacks, branded coffee collaborations and better shopping experiences.

For producers, performance and execution of trade strategy or method in this industry, can be simpler and increase margins, all thanks to better reinforcement and streamlined retailer structures. She went on to further say, Nedbank national retail services manager Karen Keylock, on South Africa’s hidden retail giant, Fuel Retail Association.co.za, recently explained that the fuel retail sector has been in decline for several years. She said this decline, which is happening for various reasons, is expected to continue.

“The long-term expectation is a 9.2% decline in global value to $79 billion (R1.46 trillion) in 2030, driven by efficiency improvements, regulations to curb emissions, and the rise of electrification and shared mobility,” Keylock said. “On top of this, consumer behaviour is changing, with more people working from home and shopping online.” Forecourt retailers are being proactive by driving footfall and sales to counteract the wider decline in fuel spend. Retail sales here, increased by 4% (and by 8.5% in 2023), completely outperforming total FMCG increase; even with the -4% decline of fuel spend.

What’s driving growth?

Retailers need to be on their toes, stay ahead and invest in three key pillars that many forecourt retailers are already seeing the benefits of. To attract and engage with shoppers, forecourt workers need to consider these:

1.) Retail partnerships with supermarket brands

2.) Loyalty programmes, often linked to financial or retail partners

3.) Value-added services, from fast-food outlets to parcel lockers and app-based deliveries, There are numerous strategies that are contributing to the performance of forecourt retailers:

4.) New store openings and revamps aligned with shopper expectations is key

5.) Retail partnerships that build trust and expand assortment: Engen x Woolworths; BP x Pick n Pay Express; Astron x FreshStop, Shell x Vida e and Torrador by Vida e Caffè – These partnerships and collaborations foster a level of trust and familiarity for shoppers

6.) QSR & Coffee partnerships with Seattle, Wild Bean Café, Vida e Caffè, Wimpy and others

7.) Loyalty programmes and banking/retail partnerships, merging fuel and grocery incentives for rewards and cashback

8.) Value-added services, such as courier collection (e.g. PUDO), car wash, play areas, workspaces, charging spots, entertainment and seating With sales growth, increasing points of distribution, evolving shopper tasks, and strategies to drive greater foot traffic, forecourt convenience represents a high-value opportunity for FMCG manufacturers. But are brands capitalising on it? Unfortunately, not, most brands haven’t been capitalising on this.

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