Forecourt retailing: balancing in-house and third-party capability

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IGD, 25 June 2025

Explore how roadside retailing is remaining a focus for significant development and the opportunities it brings.

Roadside retailing remains a focus for significant development. Forecourt operators are seeking to target the complementary opportunities connected to the sale of fuel, and to the commercial charging of the growing numbers of electric vehicles.

In this changing world, the challenging economics of fuel sales and recharging are making complementary retail an ever more critical component of roadside sites’ commercial success. However, to target this opportunity, businesses face significant challenges. These include developing capabilities that can deliver credible and successful solutions across different areas of trade that require a diversity of non-core operational processes and skills.

As we have seen over recent decades, the simplest approach, which offers the quickest results, is to partner with other businesses, such as retail and foodservice. This enables businesses to access ready-made expertise and brands through joint ventures or franchise deals.

For many roadside operators, this has been an easy decision to make given the instant stopping power and credibility established national brands can give motorists looking for somewhere to pull over for any kind of food occasion or take-home shopping need. In the UK market, for example, third-party grocery (e.g. SPAR and Co-op) and foodservice brands (e.g. Subway and Greggs) have become ubiquitous on forecourt sites, whoever the owner and operator of the different locations are.

Profile over profit?

But if going with third-party brands is such an obvious solution, why would a forecourt operator do anything else? Well, while high-profile national brands are great for driving footfall, they can impose commercial limitations for site operators. Implementing third-party or franchise brands often curbs operational flexibility and caps profit margins, thereby restricting the scope for operators to maximise potential returns.

In contrast to a market like the UK, North America has many examples of forecourt operators that have developed all their retail and foodservice capabilities in-house, successfully creating joint fuel and food brands where the food is a major destination that can effectively compete with convenience retail and foodservice specialists. However, without a doubt, creating the retail and foodservice brands of businesses like Sheetz or Wawa is a long-term project, requiring significant investment in time and money.

Yet there is, of course, a middle way between doing it all in-house and relying wholly on third parties, with some notable examples from around the world of forecourt operators evolving to access the best of both worlds.

OTR and Applegreen: the best of both worlds?

In Australia, Viva Energy, the parent of the OTR (On the Run) chain, is growing its footprint with sites that mix a core of in-house retail and basic foodservice capability with a third-party branded foodservice franchise proposition tailored to each location. Within the ‘owned’ proposition, the key components of the foodservice offer are hot coffee, food to go, dispensing and a generic diner concept offering traditional menu options. Several of these have been developed as ‘signature brands’, creating exclusivity and differentiation, including C Coffee and Moe’s Dog & Shake and Moe’s Pretty Chill slushy. Amongst the franchise concepts in its portfolio are the ubiquitous Subway and Hungry Jacks (the Australian iteration of Burger King).

This mixed approach is echoed in Ireland, where major forecourt operator Applegreen has developed a range of in-house concepts covering hot coffee (Braeburn) and generic canteen foodservice (The Bakewell), which are included alongside the third-party franchised brands like Subway and Burger King.

Both these operators draw on the strength of national and international franchised brands to give their sites mass appeal. But, by taking control of elements of their foodservice offer, Viva (OTR) and Applegreen have given themselves scope to shape their shopper proposition and profit mix more proactively than if they were wholly dependent on those third-party brands. For Viva (OTR), this creates a store proposition that delivers a gross margin over 38%.

There are clearly potential benefits in both in-house and franchise-based approaches to forecourt retailing. However, we may expect that increasingly operators will see an advantage in creating effective mixes between these approaches that allow them to create an optimal balance to drive footfall but also boost profit to create more sustainable business models going forward.

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