If you want to be inspired about the potential of forecourt retailing, you could do no worse than a visit to our friends in the Republic of Ireland, where Forecourt Trader was recently taken on a whistle-stop tour of some of the brightest and best sites around Dublin.
Many of the sites we saw were amazing the food offers in particular make the eating-on-the-move formats on GB forecourts seem quite mundane by comparison. The four companies we visited Applegreen, Topaz, Maxol and DCC are pulling out all the stops as they evolve their businesses for the future. But not all of them are focused on the shop DCC, for example, is just focused on the fuel.
Of course Ireland is a very different market to GB both north and south have always been ahead of GB in their convenience and food-to-go offers but it’s interesting to see what can be achieved.
Pulling together a bit of background information reveals that currently the economy in the south is booming; people have a lot of disposable income to spend on eating out; and unemployment is down to a nine-and-a-half year low of 6%. There are almost 1,800 forecourts in operation (similar to 2017), 1,347 of which are dealers, according to the latest figures (Catalist, Republic of Ireland, February 2018).
Topaz is the biggest operator with 391 sites, followed by Applegreen on 166. Maxol has 140 sites, while DCC supplies around 100 a mix of Emo, Great Gas and unbranded sites. In fact the unbranded sites represent the biggest grouping in ROI at 452 though they’re clearly very small rural sites, with average fuel volumes of 607mlpa, compared with an average of around 2.5mlpa for Topaz, and 5.7mlpa for Tesco, which has 21 sites.
As a measure of its dominance, Topaz has the biggest fuel market share at 32.9%. Next in line is Applegreen at 13.1%, Texaco at 10.5% and Maxol at 9.4%. Car washing remains big business in ROI it’s still within the traditional forecourt sector as it has not been so affected by cowboy operators. Another key observation is that the forecourt convenience area in stores is restricted to just 100sq m.
Our first tour was with the dynamic Joe Barrett, chief operating officer at Applegreen, which was the winner of last year’s Forecourt Trader of the Year awards with its motorway site in Lisburn, NI. The company has been raising the bar with its innovative and distinctive forecourt designs and food offers. Its key messages are ’low prices always; ’better value always’; with a focus on food and beverages. It is creating destinations offering good quality, good value and good service. We visited a mixture of sites, mostly transient Applegreen’s preferred format including motorway and neighbourhood forecourts. Its Swords site captures the essence of where Applegreen is driving its business. As customers enter the store from a spacious forecourt, they are greeted by a delicious display of cakes and coffee. "We’re capturing food-to-go customers as soon as they walk through the door," explains Joe. "The first thing we’re trying to do is sell food. We’re trying to spread our income away from just fuel which is important, but not the only part. You may fill your car once a week, but you’ll get food and coffee several times a week. We’re trying to be that second part offering food, coffee, bottles of water, then back in the car and on your way."
The design of the stores and foodservice areas has been the result of a lot of practical research, travelling the world, looking at the best quick-service-restaurants (QSR) in the big cities. Applegreen’s strategy is to create a modern, open and airy space, with plenty of comfortable seating the seats are tested at head office a space that’s a bit more upmarket than is typical on a forecourt, so customers find it a pleasant place to stay for a while and keep coming back to. There is much to tempt them. Applegreen partners with a broad range of food and beverage offers, with a tailored offer for each location. They include Subway, Burger King, Freshii, Greggs, Costa, Lavazza, as well as its own foodservice brand ’The Bakewell’. The fresh deli and hot food is something Ireland seems to do so well.
At Applegreen customers can choose from an enticing range that includes a ’full Irish’ breakfast, paninis, wraps, salads, soups and salads. The offer is tailored to each site and can be stretched to wet meals roasts, chicken curry etc depending on the local demographic.
"We’re directly competing with food-to-go offers on the high street," says Joe. "But compared to them, we’ve got easy parking, clean toilets, seating and the wider offer sweets, chewing gum, cigarettes, newspapers, lottery, food and top-up convenience.
"In terms of groceries, customers can get everything they need in an Aldi or Lidl which have been growing substantially in Ireland. Why try and compete? So we have a very limited convenience range."
Look more closely at the range of products on the shelves and you’ll see a growing own-label range of Applegreen-branded products, including pet food, milk, water margarine and cheese. "We’ve also created our own four-pack of eggs smaller households love it," says Joe. "Customers are happy to buy these products as they trust us, they trust our brand. They see us as being consistently high quality and low price. They like the ambience of the offer when they come in." It is evident the Applegreen team is continuously innovating and evolving the offer to make it more tempting and convenient for customers. New products are signposted ’Try me I’m new’; apples are polished; bananas sold singly. Applegreen also has its own, growing, distribution operation which is a boost to the efficiency of the operation. "It delivers savings and helps to keep prices down,"confirms Joe.
Following its acquisition by Canadian company Alimentation Couche-Tard in 2015, Topaz will be rebranding its canopies and Re.Store convenience stores to Circle K, across its network of 160 co-owned sites, plus 240 dealer operations in ROI over the next 18 months. Couche-Tard is on a mission to become the world’s preferred destination for convenience and fuel and has more than 12,000 sites globally. The promise is for more variety and quality for Irish customers under the Circle K brand
Apart from the re-branding there is also a change of IT systems to Oracle, to align with businesses in Europe, which will help the company benefit from streamlining and benchmarking; as well as the introduction of initiatives such as the launch of a new loyalty system. "We are autonomous, but we will have the benefit of sharing best practice and experience across the globe," says Niall Anderton, managing director at Topaz Energy Ltd. He said Topaz is committed to change for the better, where standards in service, convenience and quality, alongside responsibility to the environment, are paramount.
"Our network is a similar make-up to Applegreen in terms of having smaller to medium-sized sites. But unlike Applegreen, we don’t use any third-party brands in the business. In that sense, the look and feel of our stores is very different to everyone else."
A quick tour of sites around Dublin showed the brands created by Topaz such as Simply Great Coffee, and also Cantina, offering Mexican food, which is apparently all the rage in Ireland. On one of the sites the Cantina format featured dark wood styling with strategic lighting, giving it the feel of a trendy bar.
"Cantina is only two-and-a-half years old. We developed it ourselves," says Niall. "We have breakfast, we have lunch, and we’re trying to create an evening offer, but it’s a challenge. We’re competing with McDonalds, Burger King and a lot of Mexican bars for anyone that’s looking for food later on in the day."
The company is trialling different food formats for different sites depending on the demographic. At its Dublin Port site, whose customers are predominantly truck drivers, it is trialling a fish and chip offer called ’Catch’, which can also extend to burgers and other hot food. Other innovations on the drawing board are a smoothie bar concept and standalone coffee shop. "We’re also focusing on more healthy options," says Niall. "We were the first forecourt in the world to have calories written on the menu. Food is a big thing now. People have more disposable income so they’re not cooking at home. The home dynamic has changed, people are not always sitting down to family dinners or eating the same thing. Mums are working, they don’t have time to cook dinner."
Certainly food is one the biggest features on the company’s airport site which is frequented by a lot of taxi drivers, rental car companies, plus a lot of foot traffic from the airport. An extensive deli and hot food area complement each other in that they are busy at different times of the day. "If you walk in at 3am there’s a big queue at the deli," says Niall. "People are on night shifts at the airport. The site does 5,000 cups of coffee a week. We used to have a bigger grocery offer, but now it’s much more condensed. What sells well in the convenience area is candy, snacks and beverages."
A lot of focus goes into the fuel as well, as the company taps into the growing premium fuels market. The ’miles’ brand is marketed as a fuel that takes good care of engines, helping it run smoother and cleaner. It claims to reduce the cost of fuel by up to 3%.
Maxol recently signed off on a 100m strategic and ambitious three-year plan, part of which is to launch a new convenience brand in southern Ireland.
"We have a two-tier strategy," explains Brian Donaldson, Maxol’s chief executive since 2016. "The first is optimisation of our existing investment and portfolio. There has been a complete focus in terms of evolving our retail offer, so we extract more revenue and have a better customer experience across our established network of 115 stores.
"Running parallel to that will be looking at how we grow other divisions within the group. That includes looking at disruptive technologies and the impact on our business. If hydrocarbons contract by 50%, how do we replace that potential loss of income? Are you better off having a network of neighbourhood stores, or transient locations? How do you monetise fast charging? Equally there’s an opportunity for us to diversify if we develop a different business or division within the group. We’re not going to wait and see what happens, we’re doing the legwork now."
In terms of maximising the current network, Maxol has spent a lot of time looking at customer segmentation, trying to really understand what matters to customers. "We’re doing our homework better than ever before, which is hopefully going to mean that we’re better informed, with more insight; and that’s going to help us deliver something that will hit that sweet spot in terms of building on the high reputation and the brand value that we have built up over the past nearly 100 years.
"We need to create a USP for our business and we’re not going to achieve that by just partnering with a recognised symbol brand. We want to take the value within our forecourt fuel brand, extend that in-store and even into a private-label range of goods; so we’re not just putting our product into people’s cars, but into their fridges, their households, extending our brand reach." Maxol developed its own deli brand Moreish in 2012, and that will take on a new identity. It also currently works with a number of different brands on food and coffee such as O’Brien’s an Irish sandwich bar; Bagel Factory; a burger offer called Abra Kebabra; Insomnia coffee; and salad offer Freshly Chopped. The combination of the offers in conjunction with innovative forecourt design, has created some amazing Maxol forecourts, as in its M3 Mulhuddart Services, and Ballycoolin site.
"Our new brand is going to be more of a destination we’re creating a better environment so that people will want to spend more time there. We’re going to have a strong footprint in terms of how we reduce our carbon emissions right from the packaging we use to the cups in our coffee business. We’re sending the message that we’re not in the business of forecourt retailing, we’re in the business of convenience retailing with a big focus on a new, quality foodservice."
DCC oil ireland
DCC Retail & Oil is a leading operator of unmanned retail petrol stations in Europe with operations in France, Sweden, Denmark, Britain and Ireland. DCC supplies around 100 sites under the Emo and Great Gas brands in ROI. It also operates 17 unmanned sites. The company is segmenting the marketplace, with Great Gas becoming the brand for its unmanned sites. As dealers operating the brand come up for renewal, they are being switched over to the Emo brand. It is a deliberate strategy not to compete with the great shop and foodservice palaces of Maxol, Topaz and Applegreen. And where others in the market are using unmanned as a solution for underperforming sites, DCC is actively looking for such sites.
"Our business is about convenience, speed and price," explains Martin Clancy, managing director of DCC OIl Ireland. "We’re always very competitive on price. The average transaction takes about 2.5 minutes." The sites are also open 24 hours, and have been designed so that the customer never has to move away from the car. They have proved very popular, particularly with mums not only are they right next to their vehicle at all times, there is no pester power as there is no shop! Plus there are no drive-offs."