Ireland-based and internationally expanding fuel forecourt retailer, Applegreen has announced financial results for the full year 2016 (to 31 December), reporting total sales up by 8.9% to €1,178m. Growth was driven by its core Irish business (currently 59% of the business), which saw sales up by 11.4%. The UK business (now 39% of the total) saw growth in Euro terms impacted by the weakness of Sterling, up just 3.7%, though on a constant currency basis this was substantially higher on +17.1%. Meanwhile the still fledgling US division, achieved growth of over 82%, though naturally off a significantly lower base. Having added a net 43 new sites in 2016 Applegreen ended the year with 243 locations across its three markets.
Non-fuel sales a growing element of the mix
While fuel sales remain the central pillar of Applegreen's mix, still accounting for 80% of sales, non-fuel sales are a critical part of the business in terms of profitability, contributing over 50% of gross profit. Driven by new site acquisition as well as the only going roll-out of an enhanced food and grocery offer to existing locations, non-fuel sales grew by 17.3% over 2016. Key to up-weighting the non-fuel offer is the development of expanded store facilities to create service areas both on motorways and trunk roads. Applegreen now has 27 such 'service area' sites in the Republic of Ireland and six in the UK, plus a pipeline for further developments going forward.
Foodservice a strategic focus
Alongside a core grocery convenience retail offer Applegreen is also investing significantly in the development of its foodservice capability to enhance the destination status of its sites for travellers seeking rest-stops and refreshment. To ensure a breadth of appeal Applegreen has built a stable of partner foodservice brands, including Subway, Greggs, Costa, Burger King and Chopstix, alongside its own in-house brand The Bakewell. A further addition to this partner portfolio in 2016 has been Freshii, the salad-led food-to-go concept, which has been launched into two Irish Applegreen sites. Its fast-growing foodservice sales (up 26.3%) now account for over 7% of the business' revenues.
Bob Etchingham, Chief Executive Officer, Applegreen, commented:
"We continue to see opportunities for growth across our markets and have added 12 sites since the start of 2017. Our core Irish market is delivering good growth in non-fuel sales in particular, while fuel margin experience has been in line with 2016. The UK has also begun the year positively, and whilst mindful of the uncertainties created by the Brexit process, we expect to continue to grow our operations during the year."