Business Outlook 2025 | Retail - Forecourts

Deal activity in the petrol filling stations (PFS) market continued in the same vein as H2 2023, with the market remaining robust, being driven by need.

Demand for PFS businesses remained strong with buyers continually outnumbering sellers, and by Q3 2024 we sold more sites than in all of 2023. In 2024, there was a 47% increase in the number of forecourt  exchanges between 2023 and 2024.

Many operators have made significant investments in their real estate to attract customers to the forecourt. Notable market activity included MFG's acquisition of 337 Morrisons forecourts for £2.5 billion and EG on the Move's purchase of 34 ASDA sites for £228 million.

The top forecourt operators have become more selective about what they are prepared to buy or develop. Sites will only attract top pricing if they are large enough to accommodate future development or redevelopment of various income-driving aspects.

• The increasing costs announced in the Chancellor’s Budget will reduce the profitability of some forecourts. If operators have to increase their prices, there may be some inflationary pressure. However, as forecourts are needs-based businesses, operators will be able to off-load costs onto the consumer
• Fuel costs will rise as confirmed in the Budget, however as most UK vehicles are fuel-run, this will not have a substantial impact on operators. As there were no new incentives in the Budget for purchasing EVs, no immediate effect on fuel demand is expected in 2025
• Some owners who are thinking of selling are likely to market their business sooner to avoid Capital Gains Tax (CGT) or Inheritance tax (IT) which will come into effect in April 2025
• Strong demand for forecourts is expected to continue; however, buyers may be more cautious buyers and account for increased costs when offering
• As costs rise, continued divestment from corporate multiple retailers is expected in 2025