South Africa’s hidden retail giant set to soar

On 14 July 2025, Woolworths opened its 100th Foodstop at the Engen Sandton Convenience Centre on Katherine Street in Johannesburg.

“As more people look for smart, time-saving ways to shop, the demand for trusted, on-the-go convenience has never been greater,” Woolworths said.

The partnership between Woolworths and Engen, which spans over 25 years, has grown into a national footprint, with locations across the country.

This type of partnership is not new to the South African market. Astron (formerly Caltex) has partnered with FreshStop, which the Food Lovers Market Group owns.

There are currently over 300 of these stores. Pick n Pay Express, which has partnered with BP Southern Africa, has over 181 locations nationwide.

Interestingly, while fuel forecourt retail may be growing, fuel sales are slowing. Earlier this year, Nedbank’s national retail services manager Karen Keylock said the fuel sector has been declining for several years, a trend which is expected to continue.

“The long-term expectation is a 9.2% decline in global value to $79 billion (R1.41 trillion) in 2030, driven by efficiency improvements, regulations to curb emissions, and the rise of electrification and shared mobility,” Keylock explained.

However, she said the decline in fuel retail income is expected to be offset by gains in non-fuel retail, with global forecourt value expected to increase by 36% to $30 billion (R536.3 billion) in 2030.

“While fuel retail sales in South Africa have dropped by 7.6% over the past 5 years, the number of fuel station forecourts has increased significantly, with forecourt convenience store turnovers increasing by 14% last year alone,” she said.

The Fuel Retailers Association believes that South African fuel and convenience retailers need to shift their focus from servicing vehicles to meeting the needs of drivers and passengers.

“This means viewing fuel forecourts as ecosystems that include fuel, ATMs, quick service restaurants, grocery stores, and more, essentially replacing the old-school corner café or tearoom,” Keylock explained.

Electric cars fuel the change

New energy vehicles (NEVs) are expected to continue driving the decline in fuel sales and the shift towards non-fuel retail. NEVs still represent a small share of South Africa’s vehicle market, at less than 3%.

However, Keylock pointed out that rapid international developments, regulatory pressure, and consumer demand for greener mobility are reshaping the landscape.

“The European Union is working to phase out combustion engines by 2035 and is shifting focus to autonomous NEVs,” she said.

“China remains dominant, controlling most of the global NEV supply chain and having built battery capacity exceeding global demand by 500%.”

According to the Automotive Business Council, though, South Africa is lagging for several reasons. Without access to Euro-5 and Euro-6 compliant fuels, South Africa cannot authorise or legally sell many modern vehicles.

“Currently, 38% of petrol and 67% of diesel are imported, but the Department of Mineral Resources and Energy has committed to making Cleaner Fuel 2 available by 1 July 2027, with indications it may arrive slightly earlier,” Keylock said.

Although South Africa’s NEV market is small, it is growing. Traditional hybrids like the Toyota Corolla Cross and Mercedes-Benz C-Class are dominating sales.

“Full battery electric vehicle (BEV) sales remain limited due to affordability, which is the biggest barrier to growth in this market,” she said.

Most BEVs are priced over R900,000, but, as Keylock pointed out, 74% of new car sales in South Africa are under R500,000.

More affordable options are coming, though. In fact, one original equipment manufacturer is scheduled to launch a sub-R400,000 BEV in 2025.

Expansion continues

Keylock explained that affordability isn’t the only challenge. Many South Africans lack solar panels, inverters, or batteries to charge their vehicles at home.

Concerns about the range, resale value, and long-term performance are also deterring buyers. In addition, South Africa’s current charging infrastructure is limited, poorly maintained, and inconveniently located.

“To address these challenges, NAAMSA is engaging with the private sector to build a national charging network of 120 sites, providing accessible, reliable charging along key routes throughout the country,” she said.

Keylock said the network will leverage existing fuel stations instead of building new sites. This will ensure that drivers can find a charging site within easy travelling distance, which will be public and free to access.

“These strategic partnerships with fuel stations are preferable because of their proximity to main national routes and their existing vehicle-refuelling and alternate revenue stream infrastructures,” she said.

To cut costs and speed up installation, NEV charging sites will initially rely on the national grid, with support from solar power, which is ideal for fuel stations due to their large, sun-exposed roof space.

As profits grow, owners can expand renewable energy use to reduce grid reliance and boost returns.

“EV charging facilities certainly offer great potential for fuel retailers. It’s a natural progression for them as it uses their experience and already-expanding forecourt product offerings while providing the highest potential margin,” she said.

“As Fuel Connect points out, fuel forecourts offering much more than fuel is nothing new.”

Since the 1960s, fuel stations have been incorporated into restaurants, convenience stores, car workshops, tyre fitment centres, and even hotels. They have always been important midway destinations on long journeys for family holidays.

Recharging an NEV takes significantly longer than filling up a vehicle’s fuel tank. This means that extended services such as pharmacies, laundry services, gyms, and co-working spaces will become more common at these sites.

“Operators will then become less reliant on income from fuel, as it will account for just 20% of the forecourt’s revenue, compared with the 90% it has contributed historically,” Keylock said.

Issued on Daily Investor by Kirsten Minnaar | https://dailyinvestor.com/retail/94473/south-africas-hidden-retail-giant-set-to-soar/