At your convenience
Boasting a global asset portfolio of over 5000 petrol forecourt convenience sites and partnerships with some of the world’s leading retail brands, EG Group is a world leader in creating one-stop fuel, retail and food-to-go convenience destinations
When it was first founded in 2001 by brothers Zuber and Mohsin Issa, Euro Garages consisted of a single petrol filling station located in Bury, Greater Manchester. Today, EG Group, as the business is now known following the recent international growth, is the world’s leading independent fuel station and convenience retailer, with a diverse network portfolio spanning across nine countries; UK, France, The Netherlands, Belgium, Luxembourg, Germany, Italy, USA and Australia.
Committed to delivering a modern consumer retail offer that creates a one-stop destination where multiple consumer missions can be satisfied, by the end of 2018, EG Group was the proud operator of some 5000 sites globally and an employer of more than 30,000 people.
“Zuber and Mohsin are what can best be described as ‘serial entrepreneurs’, and it was their shared vision which has transformed the traditional petrol station model into today’s modern retail convenience destination back in 2001,” begins Ilyas Munshi, Group Commercial Director, EG Group. “Their investment approach was simple but effective and has laid-out the industry blueprint that many other operators are now trying to replicate. The underlying desire was to improve the customer’s retail experience on the traditional petrol forecourt and its accompanying infrastructure, and they did so by making the old-style kiosk shop into a larger convenience store, improving the welfare for motorists by making different grades of fuel readily accessible at all pumps, improving site cleanliness, greater parking, increasing security and providing amenities that were previously not afforded to customers such as internal seating areas. On the back of this, shop sales trebled and ironically fuel sales also increased.”
Over the years, EG Group’s strategy for delivering profitable growth has seen it partnering with a host of premium retail brands across fuel, retail convenience and food-to-go. On the fuel side, it partners with the likes of Esso, BP, Shell and Texaco, in convenience retail it has successfully cultivated relationships with well-known retail names such as SPAR, Carrefour, Louis Delhaize and in the food-to-go space its partners with globally recognised brands such as Starbucks, Burger King, KFC and Subway along with a raft of popular, local brands. However, as Ilyas goes on to explain, the group’s move into food-to-go was somewhat unplanned but has proved to be the right strategic decision.
“In the early days, it was common sector practice that brands would build their restaurants on land leased from petrol station operators and exist as tenants, however this practice led to a number of operational challenges, and perhaps more importantly meant for a poorer, less seamless customer experience,” Ilyas continues. “In response to these issues, the brothers decided to look at the possibility of running the concessions on behalf of major food and drink brands themselves, and also at how they could develop forecourt stations to accommodate more instore offerings from the likes of Subway. This approach quickly alleviated and proactively addressed many of the issues that had occurred in the landlord and tenant arrangement.”
Three revenue streams
It was also found that this new approach allowed for different food propositions that supported different parts of the day to be better catered for, and that by expanding its forecourts to include several different brands was helping to create ideal destinations for travelling customers. It also did not hurt that it soon became evident that in adding space for a food-to-go brand to operate, fuel sales again increased. “What we have established is a business model that effectively drives revenue from three main streams – fuel, convenience store and food-to-go – and this has helped make the business incredibly resilient and versatile,” Ilyas enthuses.
Another trait that has underpinned EG Group’s approach is its desire to make its offering constantly relevant to its customers, and it does so by closely watching market trends and commissioning consumer surveys and other forms of customer research. An example of this approach coming to bear can be seen in the group’s relationship with Greggs, which came about as a result of a clear desire from customers to have a bakery offer on-site. The group began working in earnest with the brand in 2015, and today operates around 175 Greggs bakery concessions across its portfolio, and is even helping to facilitate the trial of the brand’s first ever drive-through outlets.
“When it comes to our food-to-go capabilities we recognise the importance of continued investment,” Ilyas goes on to state. “To that end, we target three core areas, the first being our physical infrastructure itself, the second of which is our people, whom we rely upon to deliver the high standards both we and our partner brands expect, and the third area of investment is our ‘point of sale’ solutions, which we look to align with our brand partner own technology systems.”
The success of the above approach in its home market is there for all to see, what with EG Group expanding its presence throughout mainland UK to over 370 locations and counting. It was perhaps inevitable therefore the question of international growth would ultimately come to the fore, with many of its partners supporting the view that its business model could be easily transferred to regions such as Europe or the United States.
“Having identified an equity partner in the form of TDR Capital LLP, which itself had acquired Delek Europe (subsequently called European Forecourt Retail, EFR), a business servicing some 1350 fuel stations and convenience stores in France and the Benelux countries, we formally joined forces in October 2016 to become an European leader in our field,” Ilyas adds. “In November 2017, we secured a further 1200 forecourt assets from Esso in Italy, followed by approximately 1100 German assets in February 2018, and in April 2018, we completed the acquisition of a small portfolio of 97 sites in the Netherlands to supplement our existing network in the country.”
As its European activities prospered, opportunities also arose in the United States, where the group would go on to purchase circa 750 convenience stores from Kroger in February 2018. “What this particular investment gave us was a portfolio of assets spread right across the US, which provided EG Group with a North American platform to build upon, which we have since built on with the acquisition of another 250 Minit Mart convenience stores from TravelCentres of America in September 2018,” Ilyas says. “In the time since, we have also taken a major step forward in Australia by agreeing to purchase the petrol convenience business of Woolworths, which is made up of 540 sites.”
With particular focus on food-to-go, EG Group is all too aware that a one-size-fits-all approach does not work when it comes to meeting consumer tastes in different international markets. That is why it continues to take great care in making its brand offerings relevant to local customers, something that it honed to near perfection first in the UK and now across Europe. “In the coming months, we will be ramping up this approach in the US and in Australia as well, working with local and global brands to create the best possible retail experiences for our customers,” Ilyas concludes. “At the same time, we will continue to look out for further acquisition opportunities in those markets where we feel EG Group is best equipped to spread its wings.”