Aurora Magazine

Promoting excellence in advertising

Published in Jul-Aug 2020

“Meet Me at the Petro-Mart”

Aurora examines the impact of local modern trade on traditional retail and brand in-store strategies.

Three-foot long pink panthers are prominently displayed in Shell’s Select store at Karachi’s Shahrah-e-Faisal along with grey stuffed elephants bigger than a two-year-old toddler. About 20 customers are milling around at 11 at night, picking up coffee from the espresso machine or biscuits from the Pie in the Sky outlet located there.

Depending on the location, going to a petrol pump is not only about fuelling up the car. Sure, if a car’s gauge is showing empty near Zainab Market, the nearest pumps will offer little more than a quick fuel up and a tyre facility. But if it is in the Defence area, the chances are that the customer can pick up groceries, household goods, toys and withdraw money from the ATM while enjoying a green smoothie.

“Petro-marts are one of the emerging trends in retail,” says Jahanzeb Saeed, Director Consumer Division, Muller & Phipps (M&P). For such convenience stores with higher profiles, M&P buy shelf space and conduct branding and in-store activities.

The neighbourhood determines the array of products offered as well as the footfall. “People don’t enter petro-marts looking for a specific brand,” he says. “But they can afford the imported stuff, which some people prefer even if local counterparts of the same company are available.” Therefore, a higher margin can be enjoyed by the franchise owners of convenience stores at petrol pumps. “Traders sit in Jodia Bazaar and order containers with a diverse range of imported products. These products offer a higher return-on-income especially since not everything sold is legally imported.” His explanation clarifies the presence of baby bath products made in Brunei and a Russian range of Black Monster energy drinks available in some Defence outlets, not commonly seen anywhere else.

The margins need to be high to justify the rent charged in the petro-mart stores. “Often, the management changes every few months because the high rents make business viability difficult,” says Yousuf Jamshed, Director, Retail Leaders Conference. Comparing Nazimabad in Karachi to Gulberg and Model Town in Lahore, he says the rent at convenience stores is three to four times higher than a comparable small store in the vicinity. The franchise owners of these pump stores then charge rent to the other vendors present on-site, such as Greeno, ODonut and Pie in the Sky. Some of them also offer delivery through Foodpanda. 

Footfall is determined by the importance of the road where the pump is situated. “The other Total Bonjour has a better gentry visiting and thus a higher footfall,” says Jhangir Majeed, manager of the smaller of the two Total pumps on Khayaban-e-Shujaat, adding they have about 100 customers a day. However, Covid-19 restrictions have impacted daily footfall. “We have lost about 50% of our customers. Again, from today, the shop will have to close at 6 p.m. like the rest of the city,” says Kashif Hayat, manager of the bigger Total Bonjour on Khayaban-e-Shujaat.  

In non-Covid times, managers of Pakistan State Oil’s Shop Stop and Total Bonjour in Defence guesstimate that about 100 to 200 people visit a day, depending on the location and the level of services offered. Adnan Ali Khan, Manager at Shahrah-e-Faisal’s Hascol’s Hasmart, however, estimates that about 200 to 400 people visit a day, indicating the importance of the road being the key factor in footfall even though his shop has a more kiryana-store feel to it, complete with samosas and patties compared to the pet food and jolly rancher slushy offerings of the Defence pumps. 

The locality also determines the mix of products offered. An increase in road trips in recent years has resulted in a higher number of highway pumps offering convenience stores. The focus there is on snacks, car accessories and small toys that kids can play in the car with. On the other hand, a residential area would have products such as economy diaper packs and large shampoo bottles. For example, Shell Select at Askari IV not only has an array of groceries, a bakery and a Greeno outlet, it also has Meat One.

Although not commonly viewed as part of modern trade, the growing importance of petro-marts signals their importance as channels for expansion of retail services such as FMCGs. The major energy companies that operate pumps in Pakistan all have some sort of convenience store, even if it’s a small sleepy boy behind a dusty desk at Be Energy’s Shahrah-e-Faisal pump. They each have a subtle brand identity such as Bonjour’s and Select’s posh stores compared to Shop Stop’s lower-end range while Hasmart places more emphasis on a highway presence. n

Fatima S. Attarwala is an analyst at Dawn’s Business & Finance. attarwala@gmail.com