Consumer Intelligence
The Kenya petroleum fuels sector boasts of over 30
oil importing and marketing companies comprising of
five major companies namely Shell, Total, Kenol-Kobil,
Oil Libya, Chevron, and the Government owned National
Oil Corporation of Kenya, according to the Energy
Regulatory Commission. The major fuel services stations
mentioned offer one stop shop services for their clients,
with some offering baked goods and brewed coffees, fast
food joints for their clients.
Vivo Energy Rachel Gatome, agreed
there was a negative perception of
the convenience stores always over
priced, not well merchandised and
well stocked.
Potential of convenience stores
Convenient retail stores will play a huge role in
Kenya real estat e sector in the wake of the current over
supply in retail space, according to a prediction by the
September issue of the Fusion African Monitor. Fusion
believes the future of retail investment in Nairobi is in
the local adaption and development of convenience retail
outlets. The real estate developer and private equity firm
said that convenience stores which offer either proximity
to work, ample parking, extended business hours and
short checkout lines are better suited to cater for the
Kenyan consumer. Fusion Capital noted that consumer
shopping habits are adversely changing as shoppers
increasingly forgo weekly trips to major stores in favor of
daily shopping.
Just recently Vivo Energy the Shell licensee in
Kenya boosted customer loyalty and seen an increase
in fuel sales by revamping convenience stores at its
service stations. Retail manager at Vivo Energy Rachel
Gatome, agreed there was a negative perception of
the convenience stores always over priced, not well
merchandised and well stocked. The company in 2014
then began over hauling their non fuel retail business
partnering with Tuskys supermarket rolling out smaller
outlets, Java House and Innscor Africa which operates
brands such as Pizza Inn, Chicken Inn and Galitos. This
convenience retail strategy has seen volumes growing
over 50 per cent at the same time creating a destination
for the customers
Why are they expensive?
The convenience stores at these filling stations are
always assured of customers streaming in to fuel their
cars, and once there the attractive signage with a distant
view of neatly organized shelves displaying snacks and
soft drinks as well. Owners of the petrol stations cash in
on this opportunity charging higher prices for the spaces.
Quite honestly, the shops also charge for the
convenience of these stores where shoppers avoid long
checkout lines. The stores are much easier to navigate in
hurry. The stores as well are always open till late targeting
customers from night outs, those that are travelling and
have no other choice but pop in.
Rents at this store are a bit more expensive due
to their prime location forcing tenants to transfer the
expense to the customers to meet the high operational
costs TB
NOVEMBER 2017 • THINK BUSINESS | 39