Magazine article Marketing

Fuelling the Drive for Forecourt Variation

Magazine article Marketing

Fuelling the Drive for Forecourt Variation

Article excerpt

UK service stations are transforming into convenience stores as non-pump sales flourish. Mike Hewitt discovers why

Of all the effects of recession, the decline in spending on cars was among the most pronounced. Government figures show that spending on motor vehicles, which had risen strongly in the late 80s, fell back for the first time in recent memory in 1991. Spending on petrol also slackened off. On the face of it, a grim time for the service station industry, which saw a 1% fall in the number of service stations to 19,247 in that watershed year.

Before weeping tears on behalf of beleaguered forecourt retailers, however, it's worth looking a little deeper. New research by Euromonitor shows that forecourt turnover from services shot up 11% to reach |pounds~380m in 1990-91, with non-car-related areas such as fast food and video rental leading the way. Worldwide, the trend is the same: non-pump sales are where the real battles are being fought. They reached 14% of service station turnover across the globe in 1991, equal to around US$116bn. The trend is especially strong in the mature markets of North America and western Europe where, according to Euromonitor, retail fuel demand is stagnating "as car penetration per head of population reaches saturation and the fuel efficiency of cars improves."

As an increasing number of forecourts are transformed into convenience stores which sell fuel, the stage is being set for a marketing battle which will end with a smaller number of players dominating a crucially important sector of retailing.

"Unprofitable sites will continue to be shut in a drive for profitability which will see the market concentrating on high volume outlets," says Euromonitor.

The fact is that although the number of cars on the road will continue to increase, reaching 21.5 million by 1997, the number of service stations catering for them will fall from today's 19,000 to 18,810. …

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