If you needed proof of the health of the petrol filling station sector and an indication of where this market is headed, look no further than yesterday’s announcement that the EG Group and TDR Capital have been selected as the preferred bidder for Asda.
The EG group, founded in 2001 by brothers Zuber and Mohsin Issa have amassed a portfolio of 384 petrol filling stations in the UK and a further 5,234 sites across eight other international markets (Forecourt Trader). Their business model has focused on developing revenue from the fast food and convenience retail elements of petrol filling stations, in locations with high traffic movements.
The bid for Asda is a logical move for the Issa brothers and signals a continued focus on convenience retail. With profits from forecourt convenience increasingly outstripping profits from petrol and diesel sales, what better way to future proof your forecourt business than to fully integrate it with a supermarket business that has the third largest grocery market share in the UK (Kantar)?
Throughout lockdown we have seen a consistent interest in forecourts coming to the market and convenience stores have become the cornerstone of accessible local retail. Our own data shows there is a clear pattern emerging with an increase in new buyer registrations on Christie.com suggesting an increase in activity, with buyers actively returning to the market. This sustained demand is also resulting in vendors frequently achieving or exceeding the asking price for their retail business across the market.