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The modern forecourt - fuelled by convenience

The modern forecourt - fuelled by convenience

In contrast to the well-documented downfall of retail brands such as House of Fraser, HMV and Debenhams, there is one section of the retail market which seems to be thriving. And that’s the petrol retail sector.

Over the last decade major petrol stations have transformed into food service outlets and even complete supermarkets or fast food outlets. Indeed, in a report towards the end of last year, Shell reported that one in every three transactions at its service stations doesn’t include a fuel purchase at all.

A good example of this is Euro Garages - once a single filling station family business in Bury, Manchester.  Now one of the largest independent operators of garage forecourts in the world, with an expanding portfolio of around 341 owned sites throughout the UK alone. Unlike the classic petrol forecourt scene however, Euro Garages’ sites are more like small communities.

The Euro Garages empire, co-founded by brothers Zuber and Mohsin Issa from Blackburn in 2001, includes petrol stations and service stations offering multiple amenities such as coffee shops and coffee drive thru’s, supermarkets, pharmacies, laundry facilities, vaping shops, bakeries, and fast food outlets. They trade 24 hours a day. And they’ve been partnering up with nationally and globally-recognised retail and convenience brands in order to cater for drivers’ more developed needs and preferences. According to reports, they currently have more than 63 Starbucks drive-to and drive-thru restaurants, 138 Subway sub-stations and 167 Gregg’s bakeries.

They’ve replaced the traditional petrol pump with multiple islands of pumps which offer all types of fuel, making filling up easier. Electric charging bays accommodate the growing section of drivers who have made the switch to electric cars, incentivised by government subsidies. Additional parking encourages more “dwell time” by users. And their forecourts are lit up like football stadiums, making them look and feel much safer. 

It’s perhaps no surprise then that Euro Garages derive around two thirds of their income from their shops and fast food outlets. A significant change from the traditional petrol station which used to get 80% of their income from fuel sales.

Euro Garage’s objective is simple. To make forecourts more convenient and civilised. In some cases, destinations in their own right. And they aren’t alone.

Applegreen, one of Ireland’s largest fuel retailers, makes most of it profit from coffee and over the last few years have partnered up with Costa and Lavazza. They’re also seeking to diversify and expand their food offering by hooking up with big food brands such as Subway, Freshii and Burger King.

Global giant Shell is using a similar approach, selling around 60 million cups of Costa coffee at its stations. Many have a Waitrose store attached. The company even has its own brand of “Deli2Go” food.                  

Interestingly, the partnerships between forecourts and food to go outlets has resulted in ‘food-to-go’ on petrol forecourts outperforming the overall food-to-go market. According to research by MCA Insight & HM this is set to grow by 3.8 % in 2019.

Given the large chunks of land often occupied by petrol stations in high traffic areas it’s not hard to see why forecourts are ideal locations for retailers and food-to -Go operators. So much so that many retailers, such as Greggs, are taking some of their business out of the high street and onto the forecourt instead.

Inevitably, in an age of electric and autonomous cars and online shopping there will be those think that the petrol station has had its day. And as far as the traditional single filling station, soggy sandwich and cold coffee go they might well be right. However, I would argue that Euro Garages is a bricks and mortar example of the opportunities which still exist for the petrol stations up and down the country, albeit in a reshaped form. There are operators out there who are looking for new sites and to redevelop existing sites.

Developers, retailers and the property industry take note - if the Issa brothers’ future plans for motels, roof top eating areas and “architecturally distinct buildings” are anything to go by there is much more to come. 

By Stephanie Kyle
Senior Associate, Property

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