COMMENT: Exploiting the forecourt trade
The Irish licensing board recently approved Esso's fourteenth off-license enabling it to add alcohol to its non-fuel offering on the forecourt. With an increase in at-home alcohol consumption in Ireland, as in much of Europe, stocking this product category looks certain to pay off for Esso. Other fuel players already in on the act should look to make further investment in the area.
Esso in Ireland will soon be opening its fourteenth petrol station off-licence. This is the latest in a €70m redevelopment of Esso stations to the 'On the Run' convenience concept. Currently, less than 0.1% of alcohol sales in Ireland are through petrol stations. However, there has never been a better time for forecourt retailers to capitalize on changes in off-trade alcohol consumption on the Emerald Isle.
Research has shown that there has been an increase in drinking at home in Ireland. The 2004 law prohibiting the population from smoking in public places has played a major role in driving this trend.
Ireland is not alone in seeing such a pattern though. New Datamonitor research has found that at-home drinking is slowly increasing across Europe, which is good news for forecourt retailers in those markets authorized to stock alcohol on the shop shelves.
However, the rate of growth in these consumer occasions varies markedly between countries. At-home drinking in the UK, which is most analogous to Ireland, is forecast to grow at 2.1% annually over the same period. Less than 0.1% of UK beer sales are through petrol stations currently. In contrast, at-home consumption of drinks is forecast to decline by 1.3% in Germany. Yet with the forecourt channel accounting for 3.9% of beer sales, Germany's petrol stations have already recognized the potential of this product category.
As well as country-specific developments prompting this movement towards at-home drinking, various Europe-wide trends have played a part. Entertainment technology is luring consumers back into the home as time constraints, including more time spent traveling, heighten consumers' awareness of the need to balance their lifestyles. This is a fortuitous combination for Europe's fuel retailers, and they would surely benefit from ensuring the correct mix of alcoholic products are being offered and returns from this lucrative niche are maximised.
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