Johannesburg - Taste Holdings, the parent company for Scooters Pizza and Maxi's, plans to continue rolling out forecourt stores following a 38% sales growth in the six months to August.
Last year Taste acquired strategic sit down restaurant sites on national highways in Caltex forecourts belonging to BJs, and converted them into Maxi's in terms of an exclusivity agreement.
Taste CEO Carlo Gonzaga described the growth as "enormous" and said it encouraged further investment in the forecourt format. He said Taste has entered into an agreement with Shell to establish Maxi's in its strategic sites.
"We're planning to put down three more forecourt stores in the second half of this financial year," said Gonzaga. At present Taste has 10 Maxi's outlets in Caltex forecourts on high traffic routes.
Forecourt retailing moved into higher gear when Pick n Pay opened its first forecourt store last November in Hout Bay in the Western Cape, after concluding a partnership agreement with BP to take over some of the petrol giant's forecourt stores. Pick n Pay has since opened two more and plans to add a further four this year amid encouraging growth prospects.
Cobus Barnard, general manager for Pick n Pay's convenience strategy, said the group identified a growth opportunity through the brand exposure this arrangement brings.
Woolies stores led the way
"This is no doubt a profitable enterprise. In addition to the quantitative benefits, the qualitative benefits will have a positive effect on the brand," said Barnard.
Though forecourt retailing has existed in the country for some time now, Woolworths has been the sole big food retailer with forecourt stores through its alliance with Engen until the Pick n Pay venture.
"There is definitely merit in the convenience format as people's lifestyles nowadays demand flexibility," said Warren Buys of Cadiz Asset Management.
"I believe it's going to be important for retailers to have a convenience format offer which fits in with their customers' lifestyles. However, it is more relevant for certain products and it's still critical to have good sites and an enjoyable shopping experience."
Jeanine van Zyl, retail analyst at Old Mutual, noted that Woolworths has been relatively successful in its forecourt stores.
"But it is still small in the overall mix, and I am not sure it would be worth rolling out except in very high traffic areas, which is where they currently are. Convenience, however, is still a very important part of food shopping and will remain so for Woolies," said Van Zyl.
- Fin24.com