Food on the move
Turnover for roadside restaurants in 1997: £418m
Typical development cost of a Burger King roadside outlet: £381,000
Number of Burger Kings to be opened by Granada Roadside within two years: 75
Number of roadside McDonald's outletsin the UK: five
Number of roadside Little Chefs in theUK: 400
CHANGES in life styles have transformed us into a country that is short of time and used to eating on the move. The nation is turning its back on traditional family meals in favour of 24-hour eating. And many branded restaurants on petrol forecourts are filling customers up with both food and fuel, catering for the needs of a busy population. Restaurants on forecourts offer a sensible linkage of two requirements of people on a journey - petrol and food - and the need will continue to grow.
A Mintel survey reveals that fast food is still the fastest-growing part of the market. The turnover of roadside restaurants grew to £418m in 1997, up 21% from 1993's level of £346m.
"Fast-food sales in the UK exceeded £6b last year, and will grow rapidly in the next few years," says Kenton Lawton, retail marketing director of convenience store chain Londis. "With gross margins of up to 40%, hot foods, snacks and beverages for people on the move represent one of the most profitable categories for convenience stores with high traffic flows."
Restaurants on forecourts are a logical idea: garages have a high passing clientele and the traffic to make it work. "Thereis absolutely no reason why, with a captive market, restaurants on petrol forecourts shouldn't do very well," says Nicole Livingstone-Smith, a director of the RetailGroup.
Granada set the ball rolling in 1964 by opening the first motorway service station and shopping centre, Granada Motorway Services in Toddington, Bedfordshire. The group's other operating division, Granada Roadside, operates on A roads and smaller roads, and owns all Little Chefs apart from those on motorway service areas. Granada Roadside is also one of Burger King's biggest franchisees. At the end of 1998 the division signed an agreement with Burger King to open 75 new restaurants in the next couple of years.
Peaceful co-existence
Groups such as these have been reluctant to invite outside caterers into their forecourts for fear of damaging their own products. "Companies such as Harvester have been afraid that if they brought Café Rouge in they would simply be inviting competition," says Livingstone-Smith.
But they are gradually realising that major brands can co-exist. Little Chef's marketing manager Marc Bell does not consider his company's tie-in with Burger King on certain sites a threat. "The tie with Burger King simply offers the customer another choice and increases the size of the market," he says.
Bell stresses that the customers of Burger King and Little Chef have different needs. "If you want to get to your destination quickly you'll just want to grab a burger, but on longer journeys you'll want a half-hour stop at a Little Chef."
Burger King roadside development manager David Barrett stresses that the company considers roadside properties a priority: "Globally we are the largest branded fast-food group in the oil and gas sector, and we want to capture leadership in this country. Our number is currently 500, and we're looking to make it up to 1,000 in the UK."
Barrett says Burger King is developing this sector because oil companies have a lot of outlets in good locations.
"Petrol forecourts are open 24 hours a day, with lots of footfall, and are places people visit frequently. We're giving customers a better alternative to the soggy sandwiches in the fridge traditionally found in garages,"he says.
Burger King has a five-year forecourt expansion plan, starting with sites such as those of Shell at Balham, South London and Salford Quays, Manchester. Shell bought the property next to its Balham service station, which became the Burger King outlet. The typical 10-week design-and-build contract cost £381,000. Burger King has also just opened its first site with Total at Shoreham, Sussex. It has seven sites with Texaco and two with Shell, and a third will open in March.
Barrett foresees an increased focus on drive-through sites. "We've opened 100 this year, and I'll be surprised if the figures go down next year," says Barrett.
"Burger King simply spotted a demand - society wants more food on the go because of the growing amount of traffic moving around the country," says Burger King spokesman John Clarke.
Potential for growth
And Burger King feels the concept has huge potential. Barrett points to the USA as an indication of what could happen here. "The fast-food market is much more entrenched in the USA," he says. "We're about 10 years behind in terms of market penetration: there's already one Burger King per 20,000 people there. Naturally, we see a lot ofpotential for roadside expansion in the UK market."
Burger King's arch rival, McDonald's, also sees the potential of fast food on forecourts. McDonald's has just five roadside sites in the UK at present. And although large oil companies such as Shell act as franchisees for Burger King, McDonald's recruits only individuals.
Bryan Youlden, national roadside development manager for McDonald's, says the company will take on 15 new roadside sites in the next 12 months. "We feel the roadside market is where there is great untapped potential - a definite opportunity for forecourts," he explains.
And the grandfather of branded restaurants on forecourts, Little Chef, is still growing. It has 400 roadside restaurants, and Miles Reynolds, senior acquisitions manager of Granada Roadside Restaurants, says Little Chef aims to open another 20 in each of the next three years.
Furthermore, restaurants on forecourts are no longer just places to eat. Business executives are finding petrol forecourts convenient locations for meetings. "There's free parking, and it's easy for executives from different parts of the country to drive up the motorway, have a meeting over a meal and then drive off again," says Livingstone-Smith.
As the concept takes hold, the industry is becoming more innovative. Curry lovers are flocking to try out Birmingham's first drive-through balti house, which is celebrating a highly successful opening. In November Mr Spice opened in Sheldon, West Midlands, next to a BP petrol station, and the brothers who thought it up admit they have been startled by the response. Kamram and Razwan Inayat knew the idea of producing good-quality baltis, with a naan, salad and poppadoms, for £4.69 in less than four minutes would be a winner, but the queues have taken even them by surprise.
And now that the drive-through window is a fixture of the fast-food world, Burger King is perfecting the fly-through. A Burger King in suburban London calls the addition to its regular restaurant the "Whopper Chopper" - a landing pad where helicopter pilots can drop in, grab some food and fly out without leaving the cockpit. Pilots call first to alert Burger King that they are landing. The company is still testing the concept, but it might well take off. n
