By Kirsty Laschinger

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WOOLWORTHS’ prepared food and snacks are coming to an Engen forecourt convenience store near you.

Following a successful four-year pilot programme, Woolworths and Engen will roll out Woolworths Food Stops, stocking fresh and convenience foods, in selected Engen forecourts from mid-2005. Engen’s Barbara Manson says that the partners hope to open between 10 and 15 stores this year, targeting 50 to 60 stores by 2008. The Woolworths Food Stops will be situated in urban and suburban areas already serviced by Woolworths’ operations: existing delivery routes will be extended to accommodate them.

Not all Engen petrol stations will get Food Stops. Manson says that selected sites will be chosen "according to the strategic positioning of both brands in the market place".

A Woolworths’ spokesperson says that the relationship is exclusive and will see the retailer effectively wholesaling to the forecourt stores. The food will cost customers the same as they would pay in a Woolworths’ store, which the partners see as a key competitive advantage. Woolworths will earn a commission on all goods sold to Engen. The group has no plans to disclose this revenue separately in future.

For Engen, the Food Stops add to the forecourt’s range of 24-hour "value-added" goods and services, which include ATMs, Quickshops, bakeries and fast food. Manson declines to quantify the contribution made to Engen’s revenue by its retail operations.

Engen dealers, trained by Woolworths, will operate the Food Stops, and a joint operations team will manage the national network.

The strategic benefit for Woolworths is that it will be tapping into a rapidly growing market (the R4bn forecourt retail industry has grown at 15,8%/year according to ACNielsen), providing a new format to meet the shopping needs of existing customers and exposing the Woolworths brand to a potential new younger urban and suburban customer base. The group has not yet estimated the potential size of this new market.

The Woolworths’ spokesperson plays down the possibility that selling Woolworths’ products in a forecourt might undermine the quality image associated with the brand. "We do not believe that there is any risk here at all. The Woolworths good food strategy extends to all our store formats, across full-line corporate stores, food stand-alone stores and our Woolworths Food Stops in partnership with Engen.