Forecourt convenience store sales are forecast to increase by 3.8% to £2.9bn this year, ahead of the 3.2% growth forecast for the overall convenience retail market.
This is according to data from the new HIM & MCA Insight UK Forecourt Market Report 2020.
Despite a modest overall decline (-0.2%) in forecourt outlets this year, the number of forecourt sites with a convenience store is forecast to grow by 1.5% during 2020, with multiples and symbol groups being represented in increasing numbers.
The report highlights that the evolution of shopper behaviour has forced forecourt operators to invest in their stores in order to make their sites a destination for shoppers and not just a petrol station. Only 19% of forecourt shoppers cite fuel as their main reason for visiting and nearly a quarter (24%) of shoppers who visit a forecourt convenience store travel on foot rather than in a vehicle.
The study also includes the findings from a survey of forecourt dealers to understand their perspective of the market and trading conditions. The aforementioned evolution of forecourt stores is also reflected in this section, with 67% of forecourt operators listing increased food-to-go sales as one of the top three changes they had experienced in their business in the last 12 months.
The strong performance of forecourt convenience is set to continue, with a CAGR of 3.1% forecast between 2020 and 2023. This – coupled with continued outlet growth forecasted at 1.5% – highlights a significant opportunity for forecourt retailers and suppliers to capitalise on.
However, this will not be without its challenges, with forecourt operators highlighting uncertainty about the future of alternative fuels; rising staff costs; and staff retention as the three biggest challenges that their businesses are currently facing.
Sarah Coleman, Project Manager at MCA Insight & HIM said: “The UK forecourt market has evolved considerably in the last decade – from a time when the fuel mission accounted for over a third of visits, to now accounting for less than a fifth. Retailers and operators are feeling the pressure – or seeing an opportunity – to find alternative and innovative ways to drive footfall to their stores and thereby capitalise on the growth opportunities in the market.
“Strong investment in food to go and an increase in the number of partnerships with foodservice operators have allowed forecourts stores to become a destination for shoppers. This is more important than ever, with the food to go mission accounting for a quarter of all visits to forecourt convenience stores.”
She added: “Despite challenges on the horizon, such as rising costs, strong price competition and the dramatic decline of tobacco, we are forecasting a 3.1% CAGR over the next three years. This represents a significant opportunity for suppliers and operators as the channel continues to become more of a retail destination in its own right.”
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