Convenience retail: alcohol on the forecourt equals money in the bank
Published:22-June-2005
By BR staff writer
Although UK on-trade drinks sales are destined to falter, with a smoking ban on the horizon and consumer spending slowing down, there is an opportunity for forecourt retailers to exploit the growing off-trade industry. Both petrol stations and drinks makers would thus benefit from looking into increasing forecourt alcohol sales.
The forecourt offers an alternative distribution channel for the growing off-trade industry.
While the UK on-trade drinks market is at risk of damage from the pending smoking ban and ongoing decline in consumer spending, the off-trade industry has seen steady growth in recent times. Leading brewer InBev has caught onto this trend, announcing that it would like to see more beer sold in a wider variety of outlets, including cinemas and petrol stations.
Forecourt retailing offers one possible opportunity to help cushion the coming blows in the on-trade. Forecourt stores have grown in popularity in the UK, offering time poor consumers the convenience of buying food along with fuel. Although associations with drink-driving have deterred petrol stations from applying for alcohol licenses, there has never been a better time to increase forecourt alcohol sales. Not only is the off-trade set to benefit from the sufferings of the on-trade, but at-home drinking occasions will be a major growth area in the coming years.
Furthermore, as InBev argues, a relaxation of drinking regulations will not necessarily result in more irresponsible attitudes toward alcohol consumption. Many consumers already use cars when purchasing alcohol and there is no evidence that selling alcohol on the forecourt increases the incidence of drink-driving.
In recent years, the UK has lagged behind the rest of mainland Europe in terms of forecourt alcohol sales. In 2003, for example, petrol stations accounted for less than 0.1% of beer distribution in the UK, compared to 1.2% in France. To drinks firms, the scope for growth in UK forecourt retail could represent an opportunity to expand within a distribution channel that has not yet been fully exploited.
Essentially, drinks manufacturers can turn a dip in on-trade sales to their advantage if they diversify distribution channels and move away from the traditional straitjacket of pub and club sales. Negotiating with forecourt retailers in order to secure more shelf space for their products could give discerning drinks companies an advantage here, before their rivals beat them to it.
