A new report from market analysts Datamonitor has identified growth opportunities for the expanding forecourt retailing market in Europe.
In the report Category Growth in Forecourt Convenience Retailing, Datamonitor points out that over the last few years food and beverage sales have become increasingly important to oil companies' forecourt sales, as margins on fuel sales have continued to shrink. However, the report goes on to say, in order to continue maximising growth, forecourt retailers need to focus on categories with the highest growth potential, and respond quickly to consumer trends.
Datamonitor's research found that whilst consumers are seeking convenience foods and drinks, they also want them to be both healthy and indulgent. As such, forecourt retailers who respond to these consumer trends and move away from the traditional crisps and Coke to sushi and smoothies, will maximise their non-fuel sales going forward, Datamonitor said.
Cereal bars, functional drinks and chilled ready meals have been particularly high growth areas in the forecourt sector across Europe in recent years. All of these categories are also forecast to continue growing at a year-on-year rate of at least 6% over the next few years, according to Datamonitor.
"People perceive that they are working long hours and that their lives are increasingly hectic," said Datamonitor forecourts analyst Ricky Hill. "As a result they continue to purchase convenience foods and beverages to consume on-the-go or to take home and pop in the microwave."
Cereal bars are expected to show particularly strong growth across Europe, with the category forecast to expand at an average annual rate of 7% over the 2005-2010 period. Functional drinks, such as energy and sports drinks, represent another high growth category across Europe, and are forecast to grow at a rate of 6% over the same five year period.
Increasing numbers of consumers eating meals on-the-go have also boosted forecourt sales, the report stated. "There has been a rise in so-called 'flexi-eating', whereby food consumption is increasingly adapted to people's needs and lifestyles, rather than people fitting their lives around structured mealtimes," said Hill. "This has led to increasing numbers of consumers eating breakfast whilst on the train or bus or picking something up at the service station on the way to work."
However, while seeking convenient food and beverages, consumers also want them to be both healthy and indulgent. Hill points out that generally forecourt retailers have provided more indulgent than healthy products. But if service stations can offer customers food and beverages which are convenient, healthy and indulgent, they are better placed to maximise the already strong growth of their non-fuel sales over the coming years, Hill said.
"Going forward, the most successful service stations will be those that adapt to changing consumer trends and offer foods and beverages which are convenient, healthy and indulgent. In other words, in the longer term the emphasis of forecourt retailers' food and drinks offerings will be more about sushi and smoothies, rather than the more mundane traditional offerings," Hill concluded.