South Africa’s petrol station forecourts are rapidly evolving into a hub of retail activity as fuel sales decline and interest in convenience stores soars. Forecourt retail is estimated to be worth over R33 billion in South Africa, with the number of convenience stores at petrol stations surging by 69% in the past five years.
This is despite fuel sales steadily declining in South Africa, amid shifts in mobility, technology, and consumer behaviour. As a result of this, petrol station forecourts have become immensely valuable pieces of real estate, national retail franchising manager at Nedbank Commercial Banking Karen Keylock said.
“The traditional retail fuel model was built on a single core category – fuel. Today, that model is being reshaped by a convergence of forces,” Keylock said. This includes fuel-efficient vehicles, hybrid work patterns, economic pressure on consumers, e-hailing services, improved public transport, last-mile delivery, cheaper domestic flights, and the gradual entry of electric vehicles.
While fuel’s dominance as a profit driver is declining, these trends are unlocking new opportunities for forecourt owners to benefit. Add-on categories, such as convenience retail, are becoming main categories and changing customer missions are redefining the purpose of the forecourt.
Keylock said the shift is already well underway in South Africa, driven in part by the pandemic, which made proximity the dominant factor. This is what makes petrol station forecourts so attractive as retail centres, as it enables retailers to get close to their customers due to their distribution.
While fuel sales volumes fell by 6.3% over the past year, the number of forecourts jumped by 10%. FreshStop, through its partnership with Caltex/Astron Energy, is dominant in this space, with over 330 stores and 126 Seattle Coffee outlets.
JSE-listed retailers were late to the party, but are not coming in strong. Shoprite through OK Foods, Pick n Pay, Woolworths, and SPAR have aggressively expanded their offerings in recent years.
Trade Intelligence estimates that 849 forecourts host branded retail stores, a 26% increase 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.
Full story End of petrol stations in South Africa as you know them – Daily Investor
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