Nedbank Highlights The Forecourt Opportunity As Fuel Retailers Rethink Their Business Models

Karen Keylock, National Retail Franchising Manager at Nedbank Commercial Banking. Image supplied

While fuel volumes are under pressure from shifts in mobility, technology and consumer behaviour, the forecourt remains one of the most valuable pieces of real estate in the modern economy. The challenge is not whether the sector has a future, but whether it can evolve fast enough to seize it.

From fuel-centric to customer-centric

The traditional retail fuel model was built on a single core category: fuel. Today, that model is being reshaped by a convergence of forces: fuel-efficient vehicles, hybrid work patterns, economic pressure on consumers, e-hailing services, improved public transport, last-mile delivery, cheaper domestic flights, and the gradual entry of electric vehicles.

While fuel’s dominance as a profit driver is declining, these trends are unlocking new opportunities for value creation and diversification. The National Association of Convenience Stores (Nacs) observes that globally fuel retailers must diversify as their core category comes under pressure. Add-on categories are becoming main categories and changing customer missions are redefining the purpose of the forecourt.

In South Africa, this shift is underway, but its full potential has yet to be realised. NielsenIQ research into South African forecourts shows that while around 13,000 products may be available in stores, just 1% account for 50% of sales.

The fastest-growing categories by value and volume include energy drinks, mineral water, flavoured mineral water and extruded snacks such as chips, while the top-selling items are soft drinks, cigarettes, and bread.

The implication is clear: growth is not about expanding product ranges indiscriminately, but about curating the right mix, elevating quality, and designing a differentiated customer experience.

Globally, coffee, fresh food and premium convenience offerings have become anchor categories for forecourts. In South Africa, where consumer expectations are rising and time pressure is intensifying, this represents a significant untapped opportunity.

Understanding the evolving consumer

The South African consumer remains under pressure but is also adapting. According to NielsenIQ research from November 2025, inflation is easing, real wages are improving and sentiment is gradually recovering, with 64% of South Africans reporting that they felt better off at the end of 2025 than they did a year earlier.

Yet research by Experian and Vault22 highlights the depth of financial stress in parts of the market, with gambling expenditure estimated at R190bn annually in South Africa, outpacing grocery spending.

Consumer shopping behaviour has also evolved. Before the Covid-19 pandemic, commuting routes influenced store choice. During the pandemic, proximity became the dominant factor.

Today, hybrid routines and e-commerce have established new habits, considerably expanding consumer choice and intensifying competition for foot traffic. For forecourt owners, this means that understanding local customer dynamics is no longer optional – it is vital for sustainable growth.

Technology and resilience as competitive advantages

Forecourts are now defined not only by what they sell, but also by how they operate. Technology is emerging as a powerful differentiator. Artificial intelligence, sensor-based theft prevention, data-driven inventory management, and digital loyalty platforms can significantly enhance operational efficiency and customer engagement.

Resilience is equally critical. Cybercrime, once peripheral, is now a systemic risk, while supply chain disruptions and geopolitical volatility are making diversification and inventory buffers essential components of modern retail strategy.

Energy diversification will also play a central role. As alternative fuels and electric vehicles gain traction, forecourts that integrate charging infrastructure thoughtfully and as part of a broader customer experience will be better positioned to capture emerging demand.

The power of the right partners

The transformation of the retail fuel sector cannot be achieved in isolation. Forecourt owners increasingly require strategic partners who understand not only fuel economics, but also retail, property, technology, and consumer behaviour. Financial institutions, technology providers, logistics partners, and retail specialists each have a role to play in enabling sustainable transformation.

Access to capital, data-driven insights and tailored financing solutions will be critical in funding the next generation of forecourt investments – from store upgrades and food offerings to digital infrastructure and alternative energy solutions. In this context, partnerships are not a nice-to-have – they are the catalyst for reinvention.

A future defined by opportunity

The narrative of decline in South Africa's retail fuel sector is misleading. Fuel may no longer be the sole driver of profitability, but the forecourt remains a uniquely positioned platform at the intersection of mobility, convenience, and consumption.

Those who embrace diversification, customer centricity and strategic partnerships will unlock new revenue streams and build resilient businesses.

With the right strategy and the right partners, the forecourt of the future is not disappearing – it is being reinvented.