Say goodbye to petrol stations as you know them

Petrol stations in South Africa are increasingly becoming convenience retail hubs, with fuel sales playing a secondary role in driving revenue and profit.

With soaring fuel prices from the conflict in the Middle East, South African forecourts are even considering becoming quick-service restaurant locations first and making fuel sales a minority of their revenue. 

This shift has been driven by the desire for quick retail and declining fuel sales in the country, as individuals switch to more efficient vehicles or drive less. 

South Africa’s Fuel Retailers’ Association has partnered with the American National Association of Convenience Stores (NACS) since 2019 to help its 4,600 forecourt members navigate the changes. 

Fuel Retailers’ Association CEO Reggie Sibiya explained that the shift has been driven by survival for many forecourt owners. 

With repeated fuel price shocks in the past five years due to global conflicts, the margins on fuel sales have narrowed significantly. 

South Africa’s declining refining capacity has also impacted margins, with the country having to import refined products, which tend to be more expensive and volatile than crude oil.

Sibiya also noted the rise in illegal trading, statutory levies, and taxes on fuel as major threats to the financial stability of petrol station forecourts. 

While the partnership with NACS was first created to navigate the shift to electric vehicles, it has increasingly become about how to pivot towards convenience retail and fast food.

In recent years, the share of revenue at forecourts generated by retail sales has surged to nearly 50%, with fast food also growing rapidly.

Together, these two revenue lines generate R42 billion for forecourt owners around South Africa, and they are growing significantly faster than fuel sales or the broader economy.

The trend has only been accelerated by the sharp rise in fuel prices as a result of renewed conflict in the Middle East.

Data from Discovery Insure shows that South African motorists bought 23% less fuel in May, with transactions falling by 17% compared to January and February. 

This drop follows a 35% decline in fuel purchases in April relative to January and February, when the first price hike was implemented after the US-Israeli strikes on Iran. 

The trend towards convenience retail and food can be seen in the graphic below, which shows which revenue sources have become most important for forecourt operators.

Retail taking over

Petrol station forecourts have become immensely valuable pieces of real estate for retailers in the years following pandemic-era lockdowns.

These locations offer retailers the opportunity to operate stores extremely close to their customers, leveraging convenience and eCommerce potential in small-format stores.

The stores in forecourts tend to be immensely profitable for retailers and forecourt owners alike, as they are relatively low-cost to run and require little additional capacity with regard to supply chains.

As South Africa’s largest food producer, Tiger Brands, noted, South Africans are shopping more frequently, but are buying smaller baskets. 

This makes convenience the name of the game, as large format stores are not frequented as often, where large shopper baskets can be lucrative with all shopping done in one place. 

“The traditional retail fuel model was built on a single core category – fuel. Today, that model is being reshaped by a convergence of forces,” Nedbank’s Karen Keylock said.

Keylock explained that the shift in South Africa was rapidly accelerated by the pandemic, which made proximity the main factor in determining store locations.

As fuel sales fell by 6.3% in 2025, the number of forecourts rose by 10%. This indicates that fuel operators are increasingly aware of the retail opportunities available to them. 

This trend has also been driven by the financial backing of some of South Africa’s largest retailers, including Shoprite through OK Foods, Woolworths, Pick n Pay, and SPAR. 

These retailers have aggressively expanded their convenience retail store footprint in recent years through partnerships with various fuel brands. 

FreshStop, through its partnership with Caltex/Astron Energy, is the dominant player in this space with over 330 stores and 126 Seattle Coffee outlets. 

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 has partnerships with Puma and TotalEnergies. Its stores are also becoming more prominent in Sasol petrol stations around the country as the historic retail brand reinvents itself.

Trade Intelligence estimates that there are 849 forecourts with branded retail stores in South Africa, with this rising by 26% over the past five years.