Retail in brief: 24-hour convenience retail in full swing

BRAND ACTIVITY

Jul 18th, 07:11

Compiled by Wendy Smith

While South African retailers’ primary focus is on larger format stores, the development of smaller 24-hour forecourt offerings is in full swing as Pick n Pay, Woolworths and Fruit & Veg City partner with oil companies to open 24-hour convenience offerings. Growth has been rapid and looks set to continue.

Forecourt convenience stores offer several advantages in their ability to target shoppers. A Nielsen symposium, based on information collected in 2011 and 2012, has revealed that, on average, consumers spend almost double at a forecourt store than they do on fuel. It also found that these formats hold a 10% share in the top 20 categories, with cigarettes, airtime and carbonated soft drinks among the top product groups.

In terms of income groups it indicates that middle- to higher income consumers tend to spend more at these stores, while lower-income consumers tend to shop more often, albeit with a reduced basket size.

Despite their small stature, forecourt convenience formats have driven up to R14.8 billion in sales, according to the Nielsen symposium.

Fruit & Veg City has taken an assertive approach in forecourt convenience. Its partnership with Chevron SA setting up FreshStops at Caltex fuel stations, has yielded 133 stores to date.

“We really enjoy this close and very personal contact with our customers,” says Joe Boyle, Director at FreshStop, adding that the affiliation with Caltex helps it fulfill the convenient shopping needs of its customers.

Forming its association with BP in 2012, there are currently 17 Pick n Pay Express outlets, with two new stores opening on average per month. The retailer cites that “ the infrastructure investments that BP have made in the country , in refining and store location makes the partnership a perfect fit into our existing retail network.”

Opening its first Engen Food Stop in 2000, Woolworths has 46 Engen Food Stops at present, saying that “One of the benefits of partnering with Engen is to introduce new customers to the Woolworths brand.”

Forecourt convenience stores, while making up a small portion of the retail market, provide several opportunities to target consumers and give retailers multiple reasons to develop the channel.