Over the years grocery retailers and fuel stations have built a strong foundation on convenience, brand trust and location. But as margins tighten across the board and competition and digital alternatives rise, these partnerships may be approaching their limit, raising the question of sustainability.
Can convenience store partnerships with fuel stations continue to make money in a tough market?
Once a niche concept, these tie-ups have become a defining feature of the country’s forecourt economy, with a footprint of nearly 850 sites. From Pick n Pay Express at BP and Spar Express at various independents to Woolworths Foodstops at Engen and Shoprite’s OK Express, these co-branded outlets have reshaped how consumers shop on the move.
But success has bred saturation. Fuel volumes are declining, while the number of forecourts is rising, and shoppers, who have become more price-conscious than ever, are rethinking what “convenience” means, especially considering the dissonance between forecourt store and traditional store prices.
What began as a simple add-on to the petrol stop has evolved into a serious retail battleground. The recent opening of Woolworths’ 100th Foodstop in partnership with Engen marked a milestone in a 25-year relationship that helped reshape the very definition of forecourt convenience in SA. From a handful of outlets, the format has grown into a national network offering premium top-up groceries, ready meals and impulse treats.
Celebrations aside, the picture is somewhat more complex. Average fuel volumes have fallen 6.3% in the past year, according to Trade Intelligence’s 2025 “Forecourt Retail Report”.
To survive, stations are doubling down on retail and increasingly relying on supermarket brands to draw shoppers and preserve margins.
Trade Intelligence reports that the number of fuel forecourts that host supermarket-branded stores is up 26% over five years. Formats vary in size and scope. For example, Pick n Pay Express, in partnership with BP, operates stores averaging 300m² while targeting high-density residential and commuter areas.
The offering focuses on daily top-up needs, quick-meal solutions and loyalty-linked incentives through Smart Shopper.
There are, however, some signs of strategic restraint, with Pick n Pay’s network of forecourt stores shrinking slightly from 195 to 188 in the past year.
Spar Express has taken a different approach, with smaller stores ranging from 90m2-300m2, and with the focus on snacking, perishables and ready-to-eat meals. By the end of its 2024 financial year, the group had more than 87 such outlets across Southern Africa, many open 24/7 and anchored by in-store food brands such as Beantree Coffee and Chikka Chicken.
For now, these partnerships work, largely because they align with how consumers shop. Trade Intelligence found that forecourt store sales rose 4% in 2024.
But analysts say this momentum may be difficult to sustain without recalibrating the model.
Independent retail analyst Lwazi Nxumalo believes the partnership trend is not “sustainable in the long run”, particularly as online grocery channels expand.
Consumers are now spoilt for choice, he said, price sensitivity is rising in step with operational costs and forecourt pricing still carries a “convenience surcharge” that may not hold up in a more competitive digital market.
Nxumalo said forecourt retail is fundamentally a margin game, not a volume one. Shoppers are not doing their weekly shops near the pumps but are rather buying for immediate need, and paying more for the privilege. That means retailers rely heavily on high-margin categories and impulse purchases, rather than scale. But rising operational costs are eating into those margins.
Still, there are advantages that are hard to ignore. These formats offer longer trading hours, trusted brand visibility, and the ability to serve transient or convenience-driven missions that supermarkets and delivery apps cannot always fulfil.
MP9 Asset Management chief investment officer Aheesh Singh said the model remains viable, if execution is precise.
“Rising input costs, such as electricity and labour, continues to place pressure on margins. High-margin convenience formats are well-positioned to help offset this, catering to time-pressed commuters and proximity-driven shoppers. Long-term viability will depend on operational efficiency, site quality and the ability to integrate technology that enhances convenience,” he said.
Loyalty schemes, app-based ordering, parcel lockers and drive-through fast food outlets are already being layered into the model to increase relevance and repeat footfall. These are no longer just fuel stops; they are ecosystems.
Singh said forecourt stores did generate incremental sales increases, particularly in categories such as ready meals and beverages.
Ultimately, the sustainability of retailer-fuel station partnerships will depend on how well they evolve. The novelty appears to have worn off, and what’s left is a high-stakes balancing act of meeting shopper expectations while managing rising costs and staying relevant.
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