South African retail giants fighting over R33 billion market

South Africa’s retail giants are fighting for market share in the country’s growing R33 billion forecourt retail market, with the number of these stores growing by 69% in the past five years. 

This was revealed by Trade Intelligence in a report on the fast-moving consumer goods market in South Africa. 

Trade Intelligence specifically highlighted the emergence of fuel station forecourts as a driver of growth for traditional retailers, from Woolworths to Food Lover’s Market’s FreshStop. 

The report noted that retail sales at forecourts are uncorrelated to fuel sales, growing strongly over the past five years while fuel sales have declined. 

This indicates that convenience is becoming more important in competition between South Africa’s largest retailers.

The presence of their stores in fuel forecourts has boosted the top-line revenue of JSE-listed retailers and is increasingly filtering through to their bottom lines.

Trade Intelligence’s data showed that forecourt retail sales grew 8.5% in 2023, bringing the total sales in this sector to R33 billion.

While fuel stations have seen the volume of petrol and diesel sold decline, they have increased the retail footprint within their forecourts and leveraged partnerships with established retailers to take up the space. 

The fuel forecourt footprint has increased by 14.5% over the last five years, with nearly 600 new forecourts opening since 2019.

The report said this indicates that fuel retailers are ramping up their focus on forecourt retail to supplement revenue. 

“As fuel sales continue to decline, non-fuel retail offerings are gaining prominence in the forecourt sector,” said 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.

An exception is Shell, which recently announced its plan to divest some of its South African assets, including its 600+ service stations. 

However, this decision is not limited to South Africa and aligns with a shift in Shell’s global strategy to divest retail fuel stations. 

“Forecourt convenience stores have evolved into one-stop shops, with an increasing breadth of products, quick service restaurants and value-added services, often in collaboration with specialist retailers and suppliers,” Sutton said.

Retail partnership forecourt footprint has increased by 69% over the last five years, with FreshStop having the highest number of partnership locations, at 348 within Astron Energy forecourts.

Traditional retailers such as Woolworths and Pick n Pay have increased their presence in this market. Woolies partnered with Engen, while Pick n Pay placed its convenience stores in BP garages.

South Africa’s largest retailer, Shoprite, is not being left behind and is leveraging its OK Express brand to compete in this market.

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

 Ease of shop and location are hygiene factors, but customer service can be a critical differentiator. 

Rewards programmes dominate in driving fuel choice, with most fuel retailers now offering both proprietary and partnership loyalty programmes.

Another prominent focus is fast food, with 68% of forecourt shoppers buying takeaways. The fast-food brand available is a big drawcard, with 66% of shoppers noting that the fast-food brand is an important factor in deciding which fuel station to use. 


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