After spending many years in forecourt retailing and having being part of the original team who brought forecourt retailing to a new height back in the days of the Statoil fairplay brand in Ireland I’ve kept a close eye on it’s changes over the years
The move from fuel to food and quality coffee was inevitable
With shrinking margins on fuel, the need to bolster profits with food has long being a necessity and has lead to many advancements in Irish forecourt design and many great food-to-go offerings in the channel. With many operators now focused on improving their food-to-go and coffee offers the channel is now better than ever before, indeed coffee has become the ‘black gold’ of forecourts says Joe Barrett of Applegreen and not just in Ireland but all over the world
Food-for-now to Food-for-later still a challenge for forecourts
One of the key challenges for operators is to attract more shoppers outside the breakfast and lunchtime periods and the need to attract more health conscious consumers onto their sites, with this in mind many have opted to partner with food operators e.g. Maxol & Chopped, Applegreen & Freshii, Topaz and Cantina and further development of their own offers in food for now and food for later, Maxol Morish and Applegreen Bakewell offers. No doubt Circle K will also update the Topaz Re-Store food offer
With the introduction of Motorway sites the format has further developed to include even more reasons for commuters to stop off in their journeys not just for food, including play areas for children, office space for meeting, relaxing spaces for weary drivers, parcel motel and even laundry services
But even with many advancements has the layout really changed that much?
“If you think about any petrol station around the world, it is designed around filling a car, then along came a shop, which grew in size a bit, but the basic configuration hasn’t really changed” (David Bunch, global VP of Shell Retail)
And the biggest challenge yet is about to threaten the future of forecourts
Britain said it would “end the sale of all conventional petrol and diesel cars” by 2040, following similar proposals by France earlier this month to reduce nitrogen dioxide (NO2) pollution. In its National Mitigation Plan, the Irish government noted it is “committed to reducing emissions and building a climate resilient low carbon transport sector by 2050″. The government has set ambitious targets for the introduction of e-cars in the coming years — with 10 per cent of all vehicles to be electric-run by 2020. On top of that car manufacturers like Volvo are saying they will cease production of petrol and diesel cars by 2019
Will forecourts even be needed to charge your car?
The fact remains, though, that other than having a place to pee and pick up some snacks or food-to-go, once you go electric, you’re not going to need a forecourt to charge your future car because you’re going to be “refueling” it everywhere. One of the biggest complaints you hear about electric vehicles is that you can’t refuel them the same way as a normal petrol/diesel car. For many, their home will be the main source of car charging, but retail shops, gyms, restaurants or even the workplace could be normal. In some countries employers are already offering charging stations for their staff as perks.
Fuel operators are all to aware of the pending changes in the channel?
“We’re conscious of what’s happening in our sector when you see the likes of alternative fuels and the move towards electric cars. People don’t need to stop as often because cars are getting more efficient. So what we need to do is find another source of product we can sell to our customers and food is key.”(Joe Barrett)
“The company is monitoring the development of cars powered by alternative forms of energy. If electric cars continue to develop, then the company and its rivals are likely to take a hit when it comes to fuel sales. There’s no question that electric vehicles will probably grow in number, it’s just down to estimating what percentage they will get to over the next 10 to 15 years.” (Brian Donaldson Maxol)
There will need to be other reasons for consumers to visit forecourts
“I think there’s going to be this different animal of what a station will be in the future and how it serves people, I think there will be a diversification not only around digital and energy, but the products that you’ll serve in the store, whether it’s food, goods or experiences. They’ll need to be far more compelling for people to want to stop and dwell for 15 minutes. Instead of filling up themselves and then driving off, drivers will have time to kill while their cars are charging.” (David Bunch head of Shell Retail)
Shells vision of the future for forecourts
“I get a lot of questions about electric cars, what does this mean and how does that disrupt things?” says Bunch. “Sure it changes the game, but the technology that is being developed now that we’re pioneering – ultra-fast charging technology – is aimed to have a complete charge within 10-15 minutes, which changes the model a bit to ‘on the go’.” (David Bunch Shell)
Forecourts will rely on Food and ‘other’ services for future profits
For forecourt operators, fuel retailing will contribute an ever-decreasing proportion of profits as they further refine their non-fuel retail offer. In future, the forecourt operators will come to be seen more as convenience store groups, competing with the likes of BWG’s Spar, Musgrave’s Centra and the fast-food chains, rather than as traditional fuel retailers. (Sunday Independent Dec 2017)
With margins on petrol and diesel being razor-thin, the fuel retailers are increasingly using their forecourts to sell us ‘other’ stuff as well. In recent years, they have come to realise that their forecourts, many of which have prime locations, are ideally suited for convenience retailing.
“Our station of the future concept turns the current filling station format on its head and brings the shop, café hub to the front of the site maximising the opportunity for passing trade. In effect the roles are reversed. The fuel becomes the backcourt; out of site and the shop occupies the forecourt. The building is environmentally sustainable harvesting rainwater and sunlight, the interior spaces are flooded with daylight. The offer of a c-store, café, farmers market or click and collect services are all possibilities for the next generation of filling station whatever the fuel type may be.” (circlebrands.co.uk)
The future is bright but only for the best operators in the right locations
The key to survival will be to have a compelling reason for consumers to visit your store including fast charging, fast wifi, great food and a mixture of useful services, you will need to think about future shoppers needs and the next type of shopper missions that consumers will have, no doubt many of these new needs will include technology, the need to communicate, the need to work while on-the-go and convenience i.e. click and collect services. Amazon are already trialing this in the US. The unique location of many forecourts position them well to compete with convenience stores and some will no doubt ditch the fuel element in favour of a more enhanced convenience offer and other useful services that make consumers lives easier but there’s no doubt that the number of forecourts will shrink in the years ahead as the need to re-fuel cars will also reduce, the only question many ask is how soon will this become a reality??
Anyway that’s only my opinion but I will continue to follow this with great interest!
Gerry Byrne – Owner of Shelfstock Category Management services