Convenience Retail at the Service Station 2014 sample pages

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Motorists across Europe are increasingly starting to use service stations as one of the main places to purchase food (after the supermarket). In a European market that is having to raise fuel prices year-on-year due to ever increasing wholesale costs, creating an attractive retail proposition to make up for lost fuel margins is vital to remain profitable and to compete effectively within Europe. Learn more with sample pages from our Convenience Retail at the Service Station 2014 report.

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Convenience Retail at the Service Station 2014 sample pages

  1. 1. Verdict sample pages Convenience Retail at the Service Station 2014 page 2 Overview Motorists across Europe are increasingly starting to use service stations as one of the main places to purchase food (after the supermarket). This is because many perceive service stations to now operate as mini-supermarkets, due to the wide product range of products that is provided compared to local convenience stores. In a European market that is having to raise fuel prices year on year due to ever increasing wholesale costs, creating an attractive retail proposition to make up for lost fuel margins is vital for many fuel retailers to remain profitable and to compete effectively within Europe. Across Europe, grocery items for use in the home account for 70% of the average retail spend per month at the service station. With motorists increasingly using service stations to purchase grocery items and more major fuel retailers partnering with convenience retailers, Verdict expects this proportion to rise over the next few years. Verdict has identified that the average spend at service station retailers who are partnered with a local grocer or fast food retailer is higher than at fuel retailers that only offer own brand retail products. In the UK, some fuel retailers have seen average motorist expenditure increase by up to 13% due to strong partnerships with grocers and fast food retailers. On average, motorists use the retail facilities at the service station one and half times per month compared to four times to refuel. In order to increase the frequency of retail purchases at the service station, it is important for fuel retailers to examine their product mix and establish how best to target the needs of motorists. Over the last five years across Europe, the number of service station sites to feature a shop has risen to 82,830 as retailers attempt to recover lost margins caused by offering low fuel prices to attract price-conscious motorists. At the same time, retailers have also increased the range and quality of the convenience products they provide at the service station in order to increase the frequency of purchases and change motorists' perceptions surrounding the convenience offering at the service station. Fuel retailers need to differentiate their retail offering from that of the competition. The current retail product mix sold by fuel retailers across Europe is very similar and, as a result, motorists do not have as much brand loyalty to specific fuel retailers as they do in other retail markets. Emphasising differences such as through fast food partnerships, grocery partnerships, loyalty schemes and additional services such as click & collect will help to differentiate the retailer against its competition.
  2. 2. Verdict sample pages Convenience Retail at the Service Station 2014 page 3 Food service brand and partnerships One of the most difficult areas in which to differentiate the retail offering at the service station is fast food. Through the creation of individual retail brands at the service station, fuel retailers are attempting to distance themselves from the fuel proposition. Non-fuel products at the service station, especially relating to food products, have in the past been perceived by motorists as being low quality, which is why even though companies such as Shell are known for the quality of their fuel, they have launched their own retail brands; in Shell's case, called Deli2Go. Another strategic option for fuel retailers is a partnership with an existing food retailer such as Subway. Subway offers a selection of freshly made sandwiches, but motorists are already aware of the price and quality of these sandwiches having tasted them before at high street stores, and so have already built up a certain expectation regarding products from this firm. Strategically a partnership with a supermarket retailer will increase footfall at the service station and increase sales. Motorists are increasingly using the service station as a place to purchase grocery items, due to a combination of convenient locations and the changing working/eating patterns of motorists. As a result grocery products to be used at home currently account for 69.7% of all retail expenditure at the service station, and 48% of all retail occasions. To find out more about the convenience retail opportunities in the fuel sector please contact enquiries@verdictretail.com The full report is available to purchase in our store. Other products related to convenience retail at the service station: FOOD SERVICE AT THE SERVICE STATION CHANNEL IN EUROPE CONVENIENCE FOOD RETAILING IN THE UK VERDICT RESEARCH EUROPEAN SERVICE STATION RETAIL DATABASE

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