Convenience forecourt retail challenges

Posted On Thursday, 26 July 2001 03:01 Published by
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ONE phenomenon which is very much a part of the convenience store saga has been the transformation of the old,

ONE phenomenon which is very much a part of the convenience store saga has been the transformation of the old, rather uninspiring service stations of a dozen years ago into the vibrant all-purpose facilities many of them have become today.

Where once you could only get the bare basics of motoring - petrol, oil, air and water - plus a packet of cigarettes, provided you smoked one of the few brands they carried, a cool drink and a few other items, today the choice is exceptional.

It started with the service stations of all the leading petrol companies being smartened up, and the forecourt service going from grudging to eager. Smartly uniformed attendants positively beamed with delight upon your arrival, assured you that with them you were Number One, or whatever other slogan their company favoured, and attended to your every need with alacrity.

Sometimes you got free route maps, plastic bags for your in-car litter and a host of other little giveaways, and the rest rooms were clean and well maintained. It was the dawn of a new era, the norm in the United States now reaching South Africa.

From there it was a short step to much improved fast food and take-away services, supplied by national chains, and to bigger and better shops, with a wider range of merchandise than ever before.

Today, a garage without these facilities will quickly find itself being by-passed by motorists who regard them as normal, and will lose business to its better equipped competitors.

Take Meadow Ridge Service Centre, formerly a smart and well-run garage with a small shop, now upgraded and re-named as Meadow Ridge Convenience Centre. The upgraded facility offers in addition to the usual garage facilities a dry cleaning outlet, a Nedbank ATM, a bakery, a Woolworths fast food outlet and a very well stocked shop.

As a result, says Brian Bergh, one of two partners in the business, their monthly turnover has more than trebled - and their profits have also jumped quite nicely, although not by the same percentage. That remarkable figure is the true measure of what the transformation of the nation's garages has meant to garage proprietors.

Tight margins on the convenience store side of the business are a bone of contention with some garage owners, and efforts are being made to negotiate a better deal with some suppliers or service providers. But even if the direct profits are not as good as they might be, there is no doubt that they have transformed the garage industry, and the added services bring in more people. Once on the premises they are liable to spend both on the forecourt and in the shop, so no-one is really complaining too seriously about the overall result.

'What happens,' said one garage proprietor, 'is that the customer who comes in for petrol remembers that he also needs some cigarettes or a loaf of bread, and once inside the shop may well see something else he needs. And the same applies in reverse.'

Of course, providing these services puts an extra burden on the proprietor in terms of stock control, extra administration and paperwork, and an increased staff. By and large, staff levels tend to be about double when new facilities are put in, depending on individual cases.

These developments on the forecourts of the nation's filling stations were viewed with some displeasure by supermarket and convenience store chains, who had long and thus far vainly protested that they should have the right to sell petrol at selected outlets.

'This is a head-on fight,' said Raymond Ackerman, chairman and founder of the supermarket chain Pick 'n Pay, at the time. 'We resent the presence of petrol companies in the convenience store business. For many years we've been trying to sell discounted petrol, but have been barred from competing with them. Yet they are allowed to compete in our field....'

Things have changed since then, and there are renewed rumours that in the not too distant future some convenience store outlets will be allowed to sell petrol. Just how fast the processes are which would bring this about is a matter for conjecture. But the czars of the convenience store industry are convinced it is coming.

Whatever the outcome of that squabble, the South African consumer is the winner. Wherever he goes, facilities in this area have improved out of all recognition, and he is being well served. With plans for still more facilities at convenience stores and service stations in the pipeline, the whole level of service is being raised. Not before time, perhaps, but none the less welcome for that.

Publisher: Cape Business News
Source: Cape Business News

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