Food and electric vehicles are at the heart of roadside hospitality firm Applegreen’s European and US plans.
Forecourt player Applegreen has revealed plans to invest €1bn over the next five years to expand its business.
Applegreen, which currently serves 180m customers per year., plans to invest in a major expansion in Ireland and the United States, as well as investments in its Welcome Break business in Britain, and its growing electric vehicle (EV) charging network.
“In the US, we are focusing on larger sites, where food is at the heart of the offer”
In the United States, Applegreen currently operates more than 100 motorway service areas, and it believes there is significant scope to expand this part of its overall business.
“This is a very significant expansion programme for Applegreen, as we continue to invest to expand our business in Ireland, the United States, and the UK,” said Applegreen co-founder and group CEO Joe Barrett.
“Applegreen plans to invest €1 billion in the business over the next five years as we redevelop our sites and grow our operations, both organically and through acquisitions. Our current operations provide a very strong foundation on which to build the next phase of growth for Applegreen in each of its three markets.”
“Our focus is on growing our travel plaza business in the US, particularly on the East Coast,” Barrett said. “We currently have 106 travel plazas in States such as New York, New Jersey, Connecticut, Maine, Pennsylvania, Delaware, Ohio, and Indiana, and we are very keen to expand our presence there building upon our established and trusted relationships with the roads authorities.”
Flames, trays and automobiles
Food is now the main element of Applegreen’s business in the US, where it operates restaurant and café brands such as Burger King, Shake Shack, Chick-fil-A, Popeyes, Starbucks, Dunkin, Panera Bread and Panda Express.
“Applegreen is a hospitality business, as we have over 700 food outlets across our estate, including 300 in the United States, and traditional fuel now accounts for less than 20% of our gross profit,” according to Mr Barrett.
“In the US, we are focusing on larger sites, where food is at the heart of the offer. We are fortunate in that we have a unique position in the US market, as we are a highly experienced operator of food businesses, convenience stores, EV charging infrastructure, and traditional gas filing stations. Most other operators in the States cannot offer that ‘one-stop shop’ for road authorities.”
Applegreen also intends to continue to invest significantly in both the Irish and UK markets. “In Ireland, we will be continuing the roll out of our very successful Braeburn coffee offer and our partnership with M&S Food. We currently operate M&S at 19 of our locations in Ireland and we intend to grow that number to over 60 sites. We also plan to expand our network of motorway and roadside service areas in Ireland and the UK, and to grow our EV charging networks in both countries.”
Earlier this year, Applegreen opened a new €10m service area at Clondrinagh in Limerick and upgraded its Midway Service Area in Portlaoise with a €3 million investment. Applegreen is also due to open a new motorway services area off the M3 in Dunshaughlin, Co Meath next year with an EV charging hub, a fuel forecourt, and four separate food options.
In the UK, Applegreen is growing its Welcome Break business, which operates 58 sites, including 34 motorway service areas, and 31 hotels. It is currently investing €66m (£55m) in a new Welcome Break motorway services area on the M1 in Rotherham, which will have six food outlets, a WHSmith and a Waitrose convenience store, as well as fuel and EV charging options and a dedicated HGV driver facility.
“Rotherham will open in the first quarter of next year, and construction has also started on a new roadside services area at Hickling in Nottinghamshire,” Barrett said. “A new services area that opened on the A1 at Newark in Nottinghamshire 18 months ago is trading very well. These new developments are raising the bar for UK roadside services, and we have a strong pipeline of new motorway and major road service area sites.”
Welcome Break added Taco Bell as a new food brand partner last year and plans to open outlets of the Mexican-inspired restaurant at a number of its locations.
Charge and go
Applegreen is also investing heavily in its growing EV charging network, which has more than 1,200 fast chargers – both company-owned and third party owned – at more than 130 of its locations on many of the busiest motorways and roads in Ireland, the UK, and the US. Applegreen intends to invest more than €85m over the next five years to expand its EV network.
Applegreen’s gross profit increased by 9% to €972m last year, according to newly filed accounts for its parent company Causeway Consortium Holdings. Earnings before interest, tax, depreciation and amortisation (EBITDA) – which is a key performance measure for the company – increased by almost 7% to just under €271m last year.
“Applegreen had a very positive performance in 2023 across all three of its markets,”Barrett said. “As we continue to bring new sites on board, upgrade some of our existing locations, and expand our EV charging network we expect significant growth in the business in Ireland, the UK and the United States.”
Revenue from Applegreen’s food operations and convenience store business increased by 11% during the year. Total turnover at Applegreen, which employs 17,000 people at its 592 sites in Ireland, the UK and the United States, declined by almost 6% to €3.9bn due to a fall in fuel prices. The Irish business generated sales of almost €1.1 billion last year, while Applegreen’s UK turnover was just over €2 billion, and US sales were worth €0.8bn.
Applegreen recorded a loss before tax of just under €83 million last year, which was marginally lower than 2022, due to the impact of depreciation and amortisation, financing costs, and €12 million in non-recurring charges related to the opening of newly refurbished sites and the expansion of the Group’s EV business.
“We are currently in growth mode and are investing for the long-term strategic success of the business,” Barrett said.
During 2023, the Irish business benefitted from its recent investment in the Braeburn Coffee brand, a strong performance from its branded food offering, and the expansion of its partnership with M&S.
In the UK, food sales at Welcome Break were ahead of expectations, helped by improvements in the speed of service, which is a key driver of turnover in roadside retail. In the United States, the travel plaza business performed well and in line with expectations. Applegreen invested heavily in the US last year, as it is currently upgrading all 27 travel plazas on the New York State Thruway and all 21 travel plazas on the New Jersey Turnpike and Garden State Parkway. Sixteen US sites were redeveloped during 2023.
“We have delivered 40 brand new or refurbished travel plazas over the past two years that represent a step change in the services that we are offering for consumers,” explained Barrett. “In every location, after we re-open, we are seeing a significant uplift in trading compared to the performance prior to the investment.”
Applegreen has invested €1bn in the US in the decade since it bought its first two sites in New York’s Long Island in 2014 and is now one of the largest Irish employers in the United States.
Main image at top: Joe Barrett and Bob Etchingham, Applegreen
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