Forecourt convenience store sales are set to grow 3.8% to £2.9 billion in 2020, according to exclusive research from the HIM & MCA Insight UK Forecourt Market Report 2020 - well ahead of the 3.2% growth forecast for the overall convenience retail market.
The report highlights that retail sales from all forecourt shops (excluding fuel) are set to reach £4.6bn in 2020, and forecourt c-stores are set to make up over three fifths of this.
Despite a modest overall decline in forecourt outlets (-0.2% vs 2019), the number of forecourt outlets with a convenience store is forecast to grow by +1.5% in 2020, with multiples and symbol groups being represented in increasing numbers in c-stores on forecourts.
The evolution of shopper behaviour has forced forecourt retailers and 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 strong performance of forecourt convenience is set to continue, with a compound annual growth rate (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, dealers and suppliers to capitalise on.
However, this will not be without its challenges, with forecourt dealers 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 past 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.”
“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.”
HIM & MCA Insight’s exclusive UK Forecourt Market Report 2020 was pulled together using extracts from HIM’s Convenience Tracking Programme 2019 of over 20,000 face-to-face consumer interviews; a bespoke online survey of the Top 50 independent forecourt retailers; and an exclusive survey of 1,000 UK consumer (nat. rep) on electric vehicles.