Over the past decade, fuel and convenience retail have been some of the more resilient segments in the oil and gas industry. The growth of both out-of-home consumption and small-format retail has enabled forecourts to capture considerable incremental value from convenience retail and other nonfuel retail business. As a result, industry asset values have soared. For example, acquisition multiples for US convenience stores have almost doubled—from six to seven times annual EBITDA a decade ago to ten to 12 times today—and now well exceed the multiples of integrated oil and gas companies. Apart from strong profitability, which often exceeds 20 percent return on average capital employed, this is also a result of operators having access to a large number of adjacent value pools, allowing them to create multiple customer connections.
Innovative fuel and convenience retailers play across the full space of fuel, convenience, and service adjacencies. They cluster their networks according to local customer needs, such as food to go, food for later, “take a break,” car-care centers, and innovative fleet hubs. They are also developing new or additional business models—for example, developing forecourts into destinations for food shopping, “click and collect,” and pharmacy and postal services; forming partnerships and alliances to share locations with companies such as McDonald’s and Starbucks; and enabling customers to interact with them in seamless, digital, and engaging ways.
The mobility-retail business is offering a lot of exciting developments. In this multimedia series, McKinsey will be providing insights into the industry’s performance and ideas for players to position themselves for success in this rapidly evolving area.