Motorists slash fuel spend – an analysis by Datamonitor

Across Europe as a whole, the measures consumers are taking to reduce fuel spend are:

• 14% are switching to supermarket fuel retailers
• 5% are using public transport more
• 4.9% are combining multiple shops into one
• 3.7% are leaving home less as buying fewer goods overall
• 1% are shopping more online

Alex Jeater, retail analyst at Datamonitor, said: “The global financial crisis, coupled with periods ofhigh fuel prices, have led to a reduction in the number of car journeys undertaken as consumers have become more cautious. While a reduction in car usage is bad for the industry as a whole, our research suggests that supermarkets are, yet again, gaining from motorists adopting a more cautious approach to fuel spend, as they are looking to fill up at the cheaper sites”.

The study reinforces this point as 14% of consumers (rising to a third in the UK) have reported switching to supermarkets for their fuel partly due to price.

The research also found that 4.9% of motorists indicated they are reducing their car use by combining multiple shopping trips into one large shop. This is further good news for supermarkets as it suggests motorists are filling up at the supermarket at the same time. This behaviour was particularly evident in France, Poland, the Czech Republic and the UK.

“Instead of making lots of small shopping journeys, consumers are hitting the bigger retailers once a week, and are therefore using supermarket service stations in the same trip.”

On average, 1% of European consumers (rising to 3% in the UK) also said they were reducing their fuel spend because they were shopping more in general online. While this only represents a small proportion at the moment, the value of the online retail market is set to grow throughout Europe, with Datamonitor predicting the value of online retail to grow in the UK alone, by 49% between 2009 and 2012.

45% of motorists also admitted to paying far more attention to the price at the pumps in recent months. This is also beneficial for supermarkets which typically have a lower price point. The high proportion of motorists paying more attention to fuel prices has been aided by the increased visibility on service station prices, through websites such as petrolprices.com and fuel price pages on social networking sites.

Mr Jeater continued: “Fuel prices are notorious for fluctuating, but the mere fact that people are paying more attention to the price reflects a real shift in how motorists are viewing their fuel expenditure.”

Although the research demonstrates how supermarkets have been the real winners from consumers adopting a more cautious approach to fuel spend, opportunities in the market still exist for oil-branded service stations. The research found that motorist’s loyal to oil-branded service stations value non-fuel services such as food service and coffee highly, leaving this an area to be exploited by the oil companies.

“It’s not all doom and gloom for oil-branded service stations. If they cannot, or are unwilling to compete on price, oil-branded service stations must set themselves apart from the supermarkets by offering non-fuel services that give customers additional value”. 

NOTE:
The research is based on the study ‘Recessionary Motorist Behaviour at the Service Station’ which surveyed over 8000 consumers across 8 European Countries at the end of 2009 about their attitudes to their recent fuel purchasing behaviour.