Is Fuel & Food a partnership made in heaven?
It really depends on what is on offer and where. Most people know that there is no money in fuel retailing alone, it is a service that often comes down to the lowest common denominator…..price. Fuel companies have been slowly transitioning into retail hubs that just happen to offer fuel these days. Many fuel retailers are sitting on prime land on big blocks that are being under utilised and this presents a real challenge to optimise the mix to increase revenue from other sources ie. Australia Post delivery lockers, car washes, laundromats etc
Then of course this is a plethora of coffee & food options- BP was one of the first Fuel companies to introduce their own Wild Bean Cafe coffee concept back in 2008 in selected fuel stations across the country and it was “wildly” successful. Now Shell, Caltex (Foodary) and even 7 Eleven all have fresh coffee and some have employed baristas. In fact, 7 Eleven has come in and disrupted the market by offering a decent coffee out of an automatic machine for just $1. 7 Eleven were very smart in their rollout, they understood the market and even though the margin on a dollar coffee is not significant, collectively across the network they would be making a small fortune in coffee sales alone, not to mention agreements they have with Krispy Kreme and other food products to entice those coffee customers to purchase more whilst in store.
The question now becomes, what type of food works where- we see recent partnerships between Caltex, GYG & Boost Juice, and BP, Oporto, Subway etc. So what are the factors likely to determine the right mix of fuel & food and is it a one size fits all approach. Our experience suggests that most fuel is purchased either close to home or on the way to/from work. There are of course many other customers and workers who are out and about and will stop at other times during the day. This raises the question as to how some retailers might be missing out on customers if they have a standard one size fits all food offering that doesn’t cater for the local market at different times.
In addition, it is important to understand the demographic profile of the people living within the trade zone of the fuel site. You have to understand whether the food offering you have is going to satisfy the types of people that are likely to visit the store. If the pad is large enough to accommodate 2 QSR’s, then it makes sense to find two that have similar consumer profiles to maximise the benefits for both brands. There is no point having a brand that attracts 18-25 yo consumers in the same precinct as a brand that clearly targets the over 40 segment.
And what about Local Area Marketing? Why does every store in the network have to stock the same range of products? Optimise the range based on customers in the area that are most likely to shop with you.