It’s hard to imagine that just 10 years ago, the consumer’s experience of shopping in a forecourt convenience store (c-store) was completely different. In the 2000s, forecourt convenience retail was still dominated by garage stores that specialised in the 5cs – cigarettes, chips, chocolates, instant coffee and cool drinks. However, the industry was about to change dramatically as new players entered the fray.
It was during this time that South Africa’s food retailers – Fruit & Veg City, Spar and Pick n Pay – formed partnerships with petroleum companies and started rolling out a number of convenience stores at Caltex, Shell and BP petrol stations, respectively. In early-2009, Fruit & Veg City partnered with Chevron, now known as Astron Energy, and opened its first franchise store in Table View, Cape Town. Three years later, FreshStop at Caltex opened its 100th store in Boksburg, its 200th store opened in 2016 in Polokwane, Limpopo and almost 10 years later, in March 2019, it opened its 300th store in Durban.
“We have had a clear growth strategy in place since we opened our first franchise store in 2009 but we are also constantly evolving and looking at ways to innovate and bring added value to our customers. As a result, our growth has outpaced the rest of the fuel retail convenience industry in SA. Not only do we lead the industry in the opening of new stores but our stores also outperform all other fuel forecourt convenience retail brands in turnover, having reached the R2.2bn mark in 2018. As a growth sector for entrepreneurs, fuel retail continues to pay dividends,” says Joe Boyle, Director at FreshStop, the largest and fastest growing convenience retail brand in South Africa.
FreshStop, which has opened 302 stores across the country, is celebrating its 10th anniversary and the team is confident of continued business growth. “We have experienced excellent growth in the past 10 years and we are working closely with our partners, retailers and suppliers to guarantee further innovation and business success in the coming years. With our larger national footprint, we are focusing more on logistics and distribution, and support services such as IT; alongside developing technologies and keeping the relationships we have with our suppliers strong”.
The rapid pace of store openings would not be possible if the retail concept itself wasn’t a successful one. Since 2009, stores that have converted to the FreshStop brand have created direct employment for more than 3,000 people and reflect post-conversion turnover increases of more than 60%; and according to Nielsen, year-to-date growth stands at 15% – leading performance figures in the SA c-store industry.
Innovation on the go
Today’s forecourt convenience retail customers expects fresh quality produce, a variety of food concepts to choose from, great coffee and excellent service. According to Boyle, the SA c-store market still offers opportunities to those wanting to experiment, innovate and find new ways of meeting customers’ needs. One way FreshStop has done this is to introduce local in-house food brands. “We have led the market in introducing food brands into our stores and we’ll continue with this strategy. We’re passionate about building and introducing local brands that will deliver a fresh, innovative and quality product to our customers,” explains Boyle. In the last few years, FreshStop has introduced Crispy Chicken, Grill to Go, Hooked On fish and chips, Hot Dog Bar, Doughnut Delite, and Seattle Coffee outlets in stores. The FreshStop Diner concept has also been a success with nine Freshstop Diners currently in operation.
Coffee remains a huge driver in the fuel retail space and competition is tight with coffee still seen as a luxury purchase. However, FreshStop at Caltex is working on a project to localise and Africanise the coffee-drinking experience by working with local producers who can create a superior coffee offering for the up-and-coming millennial market. “We mustn’t underestimate the volume at the lower-end of the market. We want a value for money product that can be sold anywhere in SA and offers consistent quality”.
Continued growth of the convenience retail market
The 24-hour convenience store retail market continues to grow with international figures reflecting a 5.1% year-on-year increase. Socio and economic factors such as smaller household sizes and longer working hours are some of key factors driving the consumers’ need for convenience shopping. Customers are looking for new and inspiring ways to shop, as well as an offering that includes elements of traditional shopping with a food-to-go option.
FreshStop at Caltex was the first convenience retailer in South Africa to introduce a consistent fresh produce offer into c-stores. “We knew in 2009 that the c-store concept could offer more than the traditional 5 c’s and we wanted to appeal to a much larger audience who could rely on FreshStop if they needed nutritious snacks, groceries for dinner, or a food-to-go meal. We believed that FreshStop could offer an innovative and exciting shopping experience and this has been realised through our inclusion of great in-store Seattle Coffee options and in-house fast food brands, such as Crispy Chicken; and new services have been introduced to make consumers’ lives more convenient such as Aramex express deliveries and Pargo online pick-up points.”
Empowering store retailers
FreshStop hasn’t just invested in its brand, it has also taken steps to empower its franchisees. Since 2011, FreshStop has been working with the Department of Trade & Industry (DTI) to support, empower and bring about financial sustainability by encouraging store retailers to take up the opportunities offered by the DTI’s Black Business Supplier Development Programme (BBSDP). “The DTI’s BBSDP has been instrumental in the development of our business. It is imperative to us that we support, empower and develop our black business store owners and ensure that they build businesses that are sustainable and create jobs in their local communities. To date, 15% of our retailers have qualified for this grant, with the DTI paying out more than R27 million in BBSDP grants to our franchisees,” Boyle concludes.
According to Brian Coppin, CEO of Food Lover’s Market, the partnership with Astron Energy, has been one of mutual understanding and a desire to be the best in the industry. “I believe our success stems from our shared passion for innovation and this is borne out by the many innovative retail strategies coming out of both groups. The fact that FreshStop’s turnover exceeded the R2.2 billion mark last year proves that our emphasis on innovation and development continues and we have some exciting initiatives lined up for the future. The 10-year anniversary is just a fantastic achievement. FreshStop at Caltex will continue to lead the way and grow from strength to strength to remain the most significant player in the c-store fuel retail industry.”