Retailing at your convenience

Reminiscing a road journey brings the inevitable thought of the long tiring sessions. Earlier when one used to stop to fill the tank, at a fuelling station, the eyes searched for washrooms/ restrooms. With time the scenario changed and now the eyes rove in search of soft drinks, coffee, burgers, chips, namkeens, and candies etc. The stores offering these at fuel stations are set up for the convenience of passengers who stop to buy fuel and are termed as convenience stores.

Providing convenience to the travellers and the locals when the supermarkets and conventional stores are closed at odd hours, these stores are gradually getting popular in India. These stores mostly operate from 7 a.m. to 11 p m. to cater to the needs of the people visiting gas stations and petrol pumps. These stores not only provide convenience to travellers but also to the students who study late into night and often look for something to satisfy their hunger and quench their thirst.

Brands that are conveniently yours

In India, most of the fuel companies have opened their own retail chains or have formed joint ventures with some retail companies to open retail outlets at their stations. There is ‘In & Out’ from Bharat Petroleum. Another chain of convenience store is ‘Twenty Four Seven’, which is a joint venture of Godfrey Philips India Ltd and Indian Oil.  Many retailers have adopted the concept of convenience stores to expand their footprints and strengthen their presence in the market. The retailers and food chains that have outlets at fuel stations include Apollo pharmacy, Mcdonalds, Café Coffee Day, and Subway.

“Oil companies allow space, power and other assistance to external retail brands to attract and add customers. The revenue sharing model depends on the kind of location, pattern of traffic and the revenue generation,” says Udai Basant, Sr. Manager (ARB)-Retail North, BPCL.

According to Bharat Petroleum Corporate Limited, around 200 ‘In & Out’ stores are present in major cities, targeting its fuel buying customers. Café Coffee has around 20-25 outlets at the gas stations.

Creating opportunities

The road traffic is surging day by day and fuel stations have become the ‘resting spot’ for most of the travelling families and riders. Statistics say roads carry 61 per cent of the total freight and 85 percent of the total passenger traffic in India; and highways/expressways carry 40 per cent of the total road traffic. Considering these interesting facts, retailers are spreading their wings to tap the travelling customers. The response from such outlets is overwhelming especially during the holiday seasons when families or groups go for outings and stop at fuel stations for fuel, rest and of course refreshments!

Barista Lavazza has signed pan-India deals with oil companies- HPCL, IOCL and BPCL- since the firm plans to open up more outlets on highways in 2010. It has marked the Bangalore- Hosur, Delhi- Chandigarh, Delhi- Mathura, Delhi- Shimla and Bangalore- Mysore highways for opening standalone cafes as well as those along with the gas stations. Barista Lavazza will be setting up 12-15 highway stores this year.

With the deregulation of petrol prices, Reliance Industries (RIL) is looking forward to initially re-launch 750 fuel stations, which were shut down because of the uncompetitive fuel rates. The company, eventually, intends to increase the number to 5,000 outlets post the diesel price deregulation.

The company, at present, has its presence in 12 states and plans to have its footprints in other states too. Out of the four categories of petrol pumps one is The Avon Plazas that has restaurants, telephone booths besides garages for trucks etc. 

The move may provide a lucrative opportunity to small retailers who are looking at opening retail outlets at RIL’s fuel stations. Or we may also see some more outlets of Reliance Retail Limited itself coming at RIL fuel stations.

Products & pricing

Speaking about the product categories that have their presence at the convenience stores, Basant, says, “ Broadly speaking, categories are cosmetics, personal care products, soaps & detergents , confectionary items, biscuits, chocolates , major grocery items, tea & coffee, fruit Juices, food supplement, drinks & beverages, bakery items, and ice creams/ frozen desserts etc.” Apart from these postal services, recharge cards retailing and ATMs are also present at the destination.

Basant says, “As per the availability of space the store size of ‘In & Out’ varies from station to station, however, the average size of an In & Out store is around 500 sq ft. Without being very specific to the figures, revenue generation of the stores depends on the catchment and the traffic patterns.” 

There is not much of a difference in the pricing patterns of products available at convenience stores as compared to their pricing at regular outlets. The prices are competitive enough to suit the general travellers.

Will be a success

Though the convenience stores are at the nascent stage and still need to catch the pace. There are reasons that these stores would catch up in the near future. India being the fifth largest retail market in the world, positive response from various international brands perceiving India as the high potential market, huge inflow of FDI (foreign direct investments), growing tourisms, changing tastes of the young and educated customers and the growing on- road traffic due to more and more car-loans from banks are some of the factors that will drive the popularity and success of convenience stores. Moreover, such stores offer the prospects of generating revenue at odd places and timings!