The forgotten retail giant taking on Pick n Pay, Woolworths, and SPAR – and winning

Retail sales at South Africa’s petrol station forecourts continue to grow strongly, making it an increasingly attractive proposition to the country’s established retailers. 

Companies such as Shoprite, Pick n Pay, Woolworths and SPAR have expanded into this sector in recent years as convenience retail becomes increasingly popular. 

However, one forgotten brand dominates the market – FreshStop. With over 330 stores and 126 Seattle Coffee outlets, it remains a formidable competitor even against JSE-listed retailers. 

This is largely due to its partnership with Caltex/Astron Energy, which gives the brand a presence in hundreds of its petrol stations. 

Astron Energy is the country’s second-largest petrol station brand, with over 800 forecourts across the country. Engen is the largest, with over 1,000 forecourts. 

Data from Trade Intelligence estimates an annual turnover of R33 billion across forecourt retail, with it becoming increasingly more lucrative for companies than actually selling fuel. 

Petrol station forecourts have evolved significantly in recent years to become sites of increased retail activity, with owners having to adapt to drive continued growth. 

This has been driven by a steady decline in fuel sales, with volumes falling by 6.3% over the past year. Despite this, the number of forecourts has grown by over 10%. 

As a result, owners have had to diversify their revenue streams, resulting in increased focus on retail sales and fast-food outlets. 

This has perhaps become most noticeable with the rise of ultra-luxury convenience stores at petrol stations, such as Marble’s Pantry and Relish. 

Trade Intelligence estimates that 849 forecourts host branded retail stores, a 26% increse over five years. At over 330 stores, FreshStop has over a third of the market. 

Research shows that forecourt shoppers prefer supermarket-branded stores over fuel-branded ones for their familiarity and quality. 

This is also a result of the rise of loyalty programmes in South African retail, with Pick n Pay’s Smart Shopper prevalent at bp stations and Clicks ClubCard points at Engen. 

While FreshStop may lack the scale of other retailers, it does have an edge in its association with Astron Energy, which makes it part of Standard Bank’s UCount partnership with the fuel brand. 

Trade Intelligence said this partnership has resulted in an 83% increase in customer traffic to Astron Energy compared to competitors among Standard Bank clients. 

The need to diversify revenue streams has seen forecourts become one-stop destinations for convenience retail, including pick-up points for couriers and eCommerce players. 

bp’s rollout of 40 new forecourts even included services such as licence disc renewals and battery rentals alongside retail stores. 

FreshStop’s dominance

FreshStop dominates the convenience retail market at South African petrol station forecourts, with over 330 stores and 126 Seattle Coffee outlets. 

This immense scale has come despite increased competition from traditional retailers, which have made substantial efforts to dominate this market. 

FreshStop was one of the first convenience retailers to partner with a fuel brand in Caltex/Astron Energy, giving it a tremendous first-mover advantage. 

The brand emerged as a creation of Chevron South Africa in 2009, which asked grocery retailer Fruit & Veg City to develop a new convenience store concept for its forecourts. 

Prior to this, garage convenience stores were dominated by the bare necessities and were typically owned by the fuel brands themselves. 

The advent of this new convenience store would include more fresh food items and an increased range of long-life goods. It would also transform convenience retail by including coffee counters and ready-to-eat food items.

FreshStop had a crucial advantage in this regard through its owner, Food Lover’s Market, which invested over R1 billion into the brand. This investment enabled it to grow rapidly and bring Seattle Coffee into its stable. 

More importantly, FreshStop had access to the company’s fresh produce logistics network and buying power, enabling it to sell fresh food conveniently at attractive price points. 

Another factor working in FreshStop’s advantage is its ability to adapt to the needs of each location, with it having a much more extensive footprint than its competitors, who have specific needs to be able to offer their product range. 

While its mainstay is offering fresh, healthy food in a convenience format, FreshStop has not abandoned the established ‘five Cs’ of petrol station retail – chocolate, coffee, carbonated soft drinks, chips, and cigarettes. 

As Glencore, which snapped up Chevron South Africa in 2017, looks to overhaul its Caltex brand, turning these stations into Astron Energy-branded forecourts, it has renewed its deal with FreshStop for another decade. 

When the partnership extension was announced, FreshStop CEO Joe Boyle said the convenience store’s growth had created over 7,000 jobs. 

FreshStop currently has 330 stores – almost as many as its four biggest competitors combined – and 126 Seattle outlets alongside its convenience stores.

However, competition is stiff from traditional retailers wanting a slice of the fast-growing convenience retail pie. 

Pick n Pay has hitched its wagon to bp petrol stations in South Africa and has rapidly grown its footprint across the country. 

Woolworths’ Foodstop brand is present in many Engen garages. However, unlike other Woolworths stores, these are all franchisee-owned.

SPAR has partnered its express brand with Shell, despite the Anglo-Dutch petroleum giant having its own convenience offering under the Shell Select brand.

Shoprite-owned OK Express is the market leader among traditional retailers, as it has partnerships with Puma and TotalEnergies. 

OK Express stores are also becoming more prominent in Sasol petrol stations around the country as the historic retail brand reinvents itself.

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Images of FreshStop

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