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Retailers may be nervously looking over their shoulders as the credit crunch bites, but regional forecourt operators are set to reap the benefits of location. Dominic Ellis investigates.

As with most sectors in the UAE, forecourt retailing has come a long way in a relatively short time. The march towards convenience has been one of the driving forces but so, in a roundabout way, has the anomaly that fuel companies don't make money on fuel at the pump. This has actually been a positive for the retail marketing side, prompting companies to diversify, be more consumer-focused and receptive to market changes.

Dubai market heavyweights, EPPCO/ENOC and Emarat, are now rushing headlong into convenience, with both now planning to launch standalone and franchise operations.

Emarat, which opened its first store in Deira 12 years ago, now has 90 and rising. Over the last five years, it has been busy on a whole host of new initiatives regarding FMCG retail and vehicle services, such as Fast Track. It recently inaugurated a new vehicle testing centre at the Shamil service station in the emirate of Ras Al Khaimah.

Darren Smith, manager, retail marketing support for Emarat, said it launched Emarat Plus two years ago, an updated format which looked at layouts, merchandising and revenues and gave more emphasis on dairy, fresh produce and chilled drinks.

Merchandising chillers were installed in cash counters, providing an extra space to sell. Last year it launched Café Arabica, and such has been the success of Bakeria, introduced three years ago, that it is planning to roll out franchises from October.

"If you look around Dubai, everyone can buy the same products," he said. "So we looked at the competition, and decided to introduce bakeries. It's a nice smell and if you don't feel hungry when you walk in, you will when you walk out, and we looked at the price point."

"It's not a sit-down dining experience, just something to nourish your hunger while you're working. As is the trend the world over, the move towards fresh, quality products is the way the business will go."

EPPCO/ENOC would agree. The company has 14 Pronto bakeries now in operation, six more coming up by the end of the year and another 20 next year, which is still small when seen in the context of all its 170 stores but a significant development nonetheless.

Convenience is a key plank in the business' wider growth strategy which will see EPPCO stores phased out and the entire network branded ENOC within a few years' time.

"We went in with a ready made concept, but now our business and the market has matured," said Zaid Alqufaidi, CEO, Retail Business Stream, EPPCO.

"We now have Aqua Mart stores which are just in line, if not one step ahead, of Star Mart. ENOC is already a global brand, but retail will complement the circle."

Get ready for feverish franchising activity as both companies look to steal a march.

Smith said Emarat is talking to individuals and companies about franchises as it increasingly looks to position itself as a serious standalone retailer. Its strategy this year and next is to launch more standalone locations, whether that's convenience stores or bakerias, or both together.

"We have a lot of expertise in convenience stores and expertise, so it's taking that and converting it into a package that we can sell to individuals or companies so that they can operate the business," he said.

"We have the operating procedures, the assets, the brand names, expertise in house - it's crazy not to utilise it and make the most of it. Some people come into the franchise business with one shop - and we're sat with 90 and haven't done it."

He declined to say how many franchises it is looking at "quite a large number" and said it's primarily a question of doing it right and getting the right people on board. "It's not just money, but the expertise and motivation to do a good job," he said.

Smith said it is now starting to target commercial towers, since every single tower could potentially support a convenience business.

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