Non-fuel retail growth to continue despite short-term petrol price hikes: analyst
Drive–through retail has exploded in demand during COVID, LeaseInfo executive director Simon Fonteyn said.
LeaseInfo executive director Simon Fonteyn expects non-fuel retail to continue growth, effectively becoming much more important to fuel retailers as the latter braces for further price hikes down the road.
“Fuel locations are often places of re-fueling and an opportunity to have a quick meal whilst on the road,” he told QSR Media, adding that fuel companies are increasingly “investing in a number of associated retail services to increase convenience to the consumer, including last mile delivery.”
“For example, Amazon has forged a global partnership with Shell. During the online order process, customers can select a pick-up locker at any participating Shell station. Once Amazon has fulfilled the order and stocked the locker with the customer’s order, a pick-up code is sent via e-mail,” he explained.
“All the customer has to do is walk up to the locker, enter a code and retrieve the package. Fuel retailers are increasing their investment in convenience-based retail including Coles (Shell), Woolworths (Ampol) developing strategic alliances with petrol companies.”
In the short term, petrol prices are “relatively inelastic and demand will remain,” he surmised.
Fonteyn’s comments come as LeaseInfo is set to release its Fuel Retail data set in late 2022, which was developed by the company under new owners FLNT Pty Limited for QSRs, fuel retailers, fund managers, developers, brokers and agents.
Some key data metrics include highway traffic data, sub-lease details, rent commencement and expiry date and escalations.
Fonteyn, a key person behind the dataset along with data scientist Kooshan Fashimi and general manager of operations Jennifer Lyons, said the lack of a “comprehensive” fuel retail database in Australia was the reason for creating the service.
“Drive–through retail has exploded in demand during COVID and that demand has not abated,” he said.
Whilst chains getting real estate near fuel retailers are not new, drive-through and curbside channels have gained traction over the past years due to the pandemic.
“There are certain QSRs and other Convenience retail that have a specific requirement to be either co-located (sub-leased) within a fuel site,” Fonteyn said, listing Caltex’s The Foodary, Pie Face, Boost Juice as examples, that could also be adjacent to a Fuel Site often with shared drive-through facilities.
Some sites, meanwhile, can either be ground leases or ground and building leases — with the executive naming KFC, Hungry Jack’s, McDonalds, Oporto, El Jannah and Starbucks.
LeaseInfo’s new fuel retail database will continue to evolve, Fonteyn said, with plans to expand it to surrounding retail uses such as bulky goods and other retail uses, along with further analysis on rezoning potential, full-service restaurants and environmental register.