South Africa’s biggest retail chains are fiercely competing to secure a greater share of the growing petrol station forecourt retail space.
This is as in recent years, the purpose of petrol stations has evolved from simply being a place to refuel to a convenient spot to pick groceries and other goods.
With the steady decline of fuel volumes in recent years, petrol station owners have begun investing in and exploring alternative revenue streams, such as convenience retail and partnerships with retail chains.
This shift in purpose can be seen in the decline in fuel relative to the number of South African forecourts, with fuel volumes declining by 6.3% over the last year, while forecourt numbers have grown by 12% in just five years.
With the number of forecourts growing, retailers such as Shoprite, through OK Express, Pick n Pay, Woolworths, and SPAR are all making greater efforts to corner this new market.
Currently, the forecourt convenience retail market is dominated by Freshstop, which has over 330 stores and 126 Seattle Coffee outlets.
This is according to feedback from Trade Intelligence, which outlined the growing competition in its latest Forecourt Retail Report.
The report also found that retail partnerships are now a key aspect of the forecourt experience, with 849 forecourts now boasting supermarket-branded stores.
This represents a 26% increase over five years and highlights how forecourt shoppers prefer supermarket-branded stores over fuel-branded ones due to their familiarity and established quality.
Loyalty programs like Pick n Pay’s Smart Shopper or Clicks ClubCard points are also becoming a key part of the forecourt offering.
These loyalty programmes have made a significant impact, too, with the Standard Bank UCount partnership with Astron/Caltex, which owns Freshstop in partnership with Food Lover’s Market, having seen an 83% increase in customer traffic to Astron Energy relative to its competitors.
The new forecourt experience
This competition forms a part of a growing drive by petrol station owners to secure alternative revenue streams besides the pump.
Quick-service restaurants (QSRs), mini-supermarkets, parcel collection points, and other convenient services have all become integral to this expansion.
bpSA even plans to roll out 40 new sites with features such as license disk renewals and battery rentals.
The integration of these services has converted forecourts into one-stop destinations for drivers.
Trade Intelligence noted that of the forecourt shoppers it surveyed in June, 75% said they intend to maintain or increase their visits.
A key part of this is the gradual shift away from forecourts being expensive ‘convenience surcharges’ towards more conventional deals and value offerings.
To ensure prices are in the right range and within customer expectations, partnerships with retail chains are essential.
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