Fuel retailers setting up convenience stores, cafes to attract footfall

In a bid to improve their profitability, fuel retailers are increasingly setting up non-fuel retail businesses such as pharmacies, convenience stores, cafes, and gaming zones at petrol filling and EV charging stations, The Economic Times reported. Adani Total, Indian Oil, and Bharat Petroleum say that non-fuel businesses are emerging retail destinations.

Bharat Petroleum plans to open four dozen BeCafe outlets at strategic retail locations. The company launched its first BeCafe outlet in January 2023. “We plan to roll out BeCafes across our network,” the company said.

Convenience retail is being driven by infrastructure development and a rise in the number of highways and expressways, executives said. This is leading petrol companies to diversify into non-fuel businesses.

Over 100,000 petrol filling and EV stations are coming up across roadways. These will prove to be attractive consumer catchment destinations and most fuel retailers want to capitalise on the potential of non-fuel retail, Gaurav Marya, founder and chairman of franchising consultancy Franchise India, which is advising Adani Total on its non-fuel retail business, said.

In the US and Europe, it is common for refueling stations to offer a variety of retail services, including convenience stores, cafes, pharmacies, and other shops. Non-fuel retail works well in the hands of the right operators. Additional revenue can be generated by integration and capitalising on traffic, Anuj Puri, chairman at Anarock Group, said.  

Indian Oil Corporation Limited (IOCL) has signed a memorandum of understanding (MoU) with Deepak Houseware and Toys Private Limited, also known as Urban Tots, to set up toy shops and kiosks in IOCL's  retail outlets across India. Puri said the availability of such services improves the overall customer experience at refuelling stations and assists in creating a positive brand image for the operator. Having outlets at unconventional locations, which can operate at all hours is an advantage for coffee shops and retailers. Moreover, bigger spaces with parking facilities become available to these retailers.

By the end of 2025, India will have a cumulative highway length of 180,000 km and rail lines up to 120,000 km, a Bank of America report said.