SECTOR BUSINESS BROKER
Fuelling up for the future
Service stations are evolving but remain an attractive and profitable business and a highly popular choice among buyers, including those going into business for the first time.
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The Real Estate Institute of New Zealand
Jayson Hayde, National Director of Business Sales, Bayleys Real Estate
Prashant Vijan, Business Sales Broker, Bayleys Real Estate
Revenue may have dropped over the past five years due to global volatility in crude oil prices, but margins have increased for the 1,300 full-service and unmanned outlets across New Zealand.
“Location, business history and performance through fuel and shop sales are the most important factors for buyers when a service station comes onto the market.”
Bayleys business sales expert Prashant Vijan says service stations are considered a profitable business if they have two or more revenue streams – fuel, plus convenience shop sales and possibly a cafe, which can generate higher margins for the retailer.
The market is increasingly competitive for shop sales and Prashant says shop areas must be well presented, supplied and stocked with a good range of products, as people tend to impulse-buy at service stations. When run well, this can be a profitable side of the business for operators.
“They are attractive for people getting into business for the first time because they feel it is a safe commercial enterprise environment,” says Prashant.
Whether fuel or shop sales are the most profitable also depends on the service station’s location, but both sides are important. Generally, fuel revenue will be
