Zandi Shabalala
Burger King’s deal with Sasol is one of many collaborations between fuel service stations and retailers that is seen as being mutually beneficial as it drives up sales for both parties.
Sasol announced this week that it would host Burger King outlets at its service stations across the country, with the roll-out expected by the end of the year.
Sasol joins a number of fuel brands that have partnered with retailers on their forecourts. These include Engen’s partnership with Woolworths, BP with Pick n Pay, Caltex with Fruit & Veg City’s Freshstop and Shell with Steers.
Such collaborations give the fast-food or grocery retailer a bigger footprint in the country and allow the service stations to differentiate themselves from competitors and benefit from the retailer’s brand.
Sasol would not comment on how many Burger King outlets would be opened at its petrol stations.
Since entering the South African market, Burger King has set up two flagship stores in Cape Town.
The chief executive of Burger King South Africa, Jaye Sinclair, said partnering with Sasol “supports our rapid expansion plans”.
Jacques Theron, a portfolio manager at Absa Investments, said the deal was a great strategic move for the fast-food company. “It’s a clever way to get a footprint… throughout the country without incurring too much capital costs.”
BP announced its forecourts would be expanded with the introduction of Pick n Pay stores in addition to the retailer’s Express stores.
BP will open 120 Pick n Pay stores in the next five years.
The Shell Ultra City brand, which is usually situated along major roads, has 29 Steers diners at the 31 service stations in the chain, while Engen has opened 45 Woolworths stores at its service stations.
Of Burger King’s main competitors, Steers has 505 outlets across South Africa and McDonald’s has 170 outlets, according to the companies’ websites.
Theron said the big question was whether Burger King had the distribution capacity to keep up the quality of the food and supply on a continuous basis.
Reuben Beelders, an analyst at Gryphon Asset Management, said the consumer stood to benefit from fast food outlets at fuel stations. “It’s all about convenience,” he said. “In these deals there seems to be synergy on both sides of the deal.”
Beelders said retailers saw fuel stations as easy access into areas where they might have previously struggled. “It gives Burger King immediate access to a whole lot of spots.”
He said fast food was becoming a way of life in South Africa and increased competition in the fast-food industry had benefited consumers.
Statistics SA reported a 16.7 percent increase in fast food and takeaway sales in May.