South Africa’s forecourt sector is undergoing a monumental shift, as consumers gradually shift away from internal combustion engines and see these locations as retail hubs. <\/p>\n\n\n\n
According to the latest Forecourt Retail Report 2025\/2026 by Nedbank, declining fuel demand, rising costs, and heightened competition are reshaping the forecourt industry. <\/p>\n\n\n\n
Nedbank\u00a0Economist Crystal Huntley said that South Africa’s economy is showing early signs of recovery. <\/p>\n\n\n\n
Lower interest rates, improvements in electricity supply, rail performance and port efficiency support the economy. <\/p>\n\n\n\n
Consumer spending is also improving, with GDP growth expected to accelerate in 2025, pointing to a slow but steady recovery. <\/p>\n\n\n\n
That said, global risks remain large, especially geopolitical tensions following the US and Israel’s attacks on Iran, and the Persian nation’s response of shutting down the Strait of Hormuz.<\/p>\n\n\n\n
The strait carries roughly 20% of the global oil supply and has pushed oil prices higher, reintroducing inflationary pressure. <\/p>\n\n\n\n
“Domestic conditions are improving, and consumer activity is recovering, but global risks, particularly oil, continue to pose a major threat to stability,” she said. <\/p>\n\n\n\n
“While inflation is easing, rising oil prices and a weaker rand could push it above the SARB\u2019s target range, as we saw during the Russia-Ukraine conflict in 2022.” <\/p>\n\n\n\n
Fuel consumption declined by 6.3% in 2024. Even if there is a recovery, consumers remain incredibly price-sensitive, and margins remain tight. <\/p>\n\n\n\n
She stressed that forecourt operators should plan for volatility, as price shocks, demand fluctuations, and cautious consumers will continue in the market. <\/p>\n\n\n\n
Despite the current volatility, other signs indicate this is not simply a cyclical downturn. <\/p>\n\n\n\n
Nicola Allen, Forecourt Analyst at Trade Intelligence, said that long-term behavioural and economic shifts, such as the shift to hybrid working models, are fundamentally reducing demand.<\/p>\n\n\n\n
Declining fuel consumption, increasing market saturation and intensifying competition are placing pressure on profitability. <\/p>\n\n\n\n
Some forecourts in major metros have seen volume declines of 15 to 20% since the pandemic, with operators effectively \u2018cannibalising\u2019 one another in an already-constrained market.<\/p>\n\n\n\n
Other challenges include rising operational costs, unregulated competition from informal retailers, and illicit fuel trading, which are further eroding margins. <\/p>\n\n\n\n
Due to these challenges, convenience retail has emerged as the key growth driver. The segment contributes 15% to South Africa\u2019s FMCG primary convenience channel. <\/p>\n\n\n\n
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