During the recession there’s been much talk about consumers turning their backs on big brands and opting for own-label versions of their favourite products instead. However this big switch has not been altogether successful. Some consumers have tried own-label, found it lacking, and gone back to brands while some brands have used promotions and the introduction of value ranges to hold onto their consumers. It seems the power of the brand should not be under-estimated and that’s the reason why so many motorway services ally themselves with big brands think Burger King, KFC, M&S Simply Food and now Waitrose.
Tim Gittins, retail director of Moto Hospitality, says the introduction of M&S Simply Food outlets has had a very positive impact on the company’s business. "M&S is a high street brand that people trust to provide quality and value for money, and the Simply Food format is popular with our customers. People now expect to find the names that they know and trust in the high street when they are travelling and Moto provides its customers with the most extensive range of brand names in the market."
And Rod McKie, chief executive officer at Welcome Break, says his company is "very excited about its new partnership with Waitrose".
"We believe Waitrose is by far the leading convenience grocer, both in terms of quality of food and standard of service and therefore, in our quest to work with world-famous brands to stand alongside Burger King, KFC, Starbucks and WH Smith, Waitrose was the obvious choice. The motorist is, without doubt, becoming more discerning and it is up to us to meet their needs. We feel our portfolio of offers satisfies the needs of the travelling public across the network."
You might not be able to get M&S or Waitrose on your site but it seems licences for running Burger Kings and Starbucks are there for the taking.
Euro Garages, which is ranked at number three in our Top 50 Indies listing, has both a Burger King and a drive-thru Starbucks at its BP site in Deeside, North Wales.
Indeed the company has signed a licensing deal with Starbucks to open up to 30 coffee stores in the UK some on forecourts, some as standalone outlets.
Euro Garages director Mohsin Issa explains: "It’s essential for us to work with strong brands which share our commitment to innovation. Our partnership with Starbucks will complement the offer on our existing estate, as well as enable us to accelerate our growth with new standalone ’drive-thrus’ across the UK." Euro Garages certainly likes its brand alliances as it also has Subway outlets operating on some of its forecourts.
It is hard to ignore the expansion of Subway over the past few years as it has grown to have more than 1,480 stores in the UK and Ireland. This number includes over 100 that are open or in development, in convenience stores and forecourt sites. The chain says it still has ambitious expansion plans for the UK and Ireland, and is actively seeking businesses to lease space to a trained franchisee. Subway is certainly worth considering as it has been named the number one franchise opportunity for 2010 by Entrepreneur magazine in its annual "Franchise 500" rankings. This is the 17th time the chain has won this award in the past 23 years.
Franchisee Simon Ledwick will shortly open his 12th Subway store within a Gulf filling station in Penrith, Cumbria. Already achieving great success with traditional format stores Simon, and his brother and business partner Mark, made the move to a forecourt site as they recognised the potential it could bring to their business.
Simon says: "Our new forecourt site in Penrith will offer motorists a greatly enhanced service and is set to be one of the largest stores within a forecourt site in the UK, with seating for up to 20 customers at a time. We made the decision to expand into forecourts as it offered excellent opportunities to partner with an existing brand and site. The new store is set to open in May and we are anticipating a very positive response from both the local community and visiting motorists."
Caroline Thomson, national accounts manager for Subway, says they are looking for locations with good traffic flow, a prominent position with good visibility and good accessibility. The company can then tailor the offer to the site, whether that means a drive-thru, drive-to or as part of the forecourt shop. Outlets can be as small as 300sq ft and still carry the full menu range.
Says Thomson: "I’ve seen many companies quickly integrate Subway stores into forecourts to great success. The collaborative approach that our chain takes delivers real benefits for companies, including increased footfall and sales and excellent business growth opportunities. There is real potential to a partnership with us and we are looking forward to expanding the store count across the UK and Ireland over the coming months."
Jamie Trust, senior business analyst at the Institute of Grocery Distribution, recognises the importance of links with fast food chains to improve a forecourt’s image. "The entry of popular foodservice brands from the high street such as Subway, Tim Hortons, Costa and more recently Greggs is helping deliver a more compelling and sophisticated forecourt offer, that is driving higher levels of trust and confidence among shoppers. As competition intensifies, differentiation will remain key for forecourt stores, and partnering with brands new to the channel will benefit the sector and consumers going forward."
However the most common brand alliances on forecourts are via symbol groups such as Spar, Londis and Mace.
IGD’s Trust says the increasing penetration of recognised retailer brands in forecourt locations is helping to drive operational standards and consumer expectations of forecourt stores.
"Symbol group operators in particular, offer a wide range of benefits such as links to national advertising and strong promotional packages enabling a wider number of stores to capitalise on the strong growth that symbol group membership offers. Recognised retailer brands help drive store footfall and therefore make the sector less dependent on vehicle re-fuelling as a driver of shopper trips."
What the retailers say...
Nizam Patel, Darnall Service Station, Sheffield:
"Our Darnall store was unaffiliated until last year, when we invested heavily to create an eye-catching, curved glass fronted flagship store under the new Mace fascia. Our sales have now doubled. Without a brand, we would just have been another petrol station with a shop, whereas the Mace symbol is recognisable, attracting more shoppers who are willing to spend more."
Polly and Phil Marsh, Clerkenleap Service Station, Worcester (switched to Spar last summer):
"By joining Spar we feel we can offer our customers a better range with keener prices. We have an improved range of fresh food and excellent promotions. It feels that we have made the best choice for the long-term growth of our business."