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Forecourt retailers increasingly important to SA consumer habits

By our African Marketing Confederation News Team | 2024

Local forecourt retail market remains a growing opportunity, with most fuel retailers expanding their footprint and in-store offerings.

Photo: BP

As South African shoppers become increasingly time-pressured, convenience is a growing necessity and the country’s forecourt stores have positioned themselves effectively to meet this need, says retail business research specialist, Trade Intelligence.

 

The company has recently released its SA Forecourt Retail Report, which analyses local forecourt retail trends to assist FMCG suppliers and manufacturers, as well as retailers, shape winning strategies.

 

An interesting paradox playing out these forecourts is that, while fuel sales are declining, sales in their retail stores are growing. Fuel sales have dropped by 7.6% versus 2018/2019, while forecourt retail sales grew by 8.5%.

 

According to the report, fuel forecourt footprint has increased by14.5% over the last five years, adding 582 net new forecourts since 2019. This indicates that fuel retailers are ramping up their focus on forecourt retail to supplement slowing fuel revenue.

 

“As fuel sales continue to decline, non-fuel retail offerings are gaining prominence in the forecourt sector,” says Sandy Sutton, Retail Analyst at Trade Intelligence.

 

As such, the forecourt retail market remains a growing opportunity, with most fuel retailers expanding their footprint and in-store offerings, and some new players entering this space.

 

Shell divesting from retail fuel stations

 

An exception is Shell, which recently announced its plan to divest some of its South African assets, including its 600-plus service stations. This decision is not limited to South Africa, however, and is in line with a shift in Shell’s global strategy to divest from retail fuel stations.

 

“Speculation is rife as to how things will play out exactly, but the 600-plus forecourt stores will end up in new hands,” Trade Intelligence comments.

 

“Forecourt stores are increasingly associated with meeting immediate needs for on-the-go shoppers,” explains Sutton.

 

Ease of shop and location are hygiene factors, but customer service can be a critical differentiator. And when it comes to driving fuel choice, rewards programmes dominate, with most fuel retailers now offering both proprietary and partnership loyalty programmes.

 

Another prominent focus is fast food. Sixty-eight percent of forecourt shoppers buy takeaways and the fast-food brand available on a specific forecourt is a big drawcard for 66% of shoppers.

 

What about the barriers? For those consumers who do not shop at forecourt retail stores, their biggest concern is the perception that they are too expensive. But, overall, most shoppers perceive forecourt prices to be reasonable and many now expect good promotions at their local petrol station store too, not just their supermarket, Trade Intelligence notes.

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    Dr Kin Kariisa

    Group CEO - Next Media

    Dr. Kin Kariisa is an extraordinary force at the helm of Next Media Services, a conglomerate encompassing NBS TV, Nile Post, Sanyuka TV, Next Radio, Salam TV, Next Communication, Next Productions, and an array of other influential enterprises. His dynamic role as Chief Executive Officer exemplifies his unwavering commitment to shaping media, business, and community landscapes.
    With an esteemed academic journey, Dr. Kariisa’s accolades include an Honorary PhD in exemplary community service from the United Graduate College inTexas, an MBA from United States International University in Nairobi, Kenya, a Master’s degree in Computer Engineering from Huazong University in China, and a Bachelor’s degree in Statistics from Makerere University.
    Dr. Kariisa pursued PhD research in Computer Security and Identity Management at Security of Systems Group, Radboud University in Nijmegen, Netherlands. As a dynamic educator, he has shared his expertise as a lecturer of e-Government and Information Security at both Makerere University and Radboud University.

    Dr Kin did his PhD research in Computer Security and Identity Management at Security of Systems Group, Radbond University in Nigmegen, Netherlands. He previously served as a lecturer of e-Government and Information Security at Makerere University in Kampala, Uganda and Radbond University in Netherlands.

    Dr Kin did his postgraduate courses in Strategic Business Management, Strategic Leadership Communication and Strategies for Leading Successful Change Initiatives at Harvard University, Boston USA.

    • Other current and previous roles played by Dr Kin Kariisa:
    • Lecturer of e-Government and Information Security to graduate students at Makerere University, Kampala and Radbond University in the Netherlands
    • Director of Eco Bank Uganda Limited, one of the largest banks in Africa
    • Chairman of the National Association of Broadcasters, an umbrella industry association for all Television, Radio and online broadcasters in Uganda.
    • Chairman of Board of Directors of Nile Hotel International, that owns the leading hotel in Uganda, Kampala Serena Hotel.
    • Chairman of Board of Directors of Soliton Telmec Uganda, the leading telecom company in Optic fibre business managing over 80% of optic fibre in Uganda.