Labor Reform, Technology Adoption and Tighter Retail Margins in Mexico Could Spur Self-Service Fueling: Analysts
Self-service fueling at Mexico’s retail fuel stations, a common feature in the U.S., could expand over the coming years as factors including shorter workweeks, shrinking profit margins and broader adoption of digital payment methods converge, industry consultants said during a recent Onexpo webinar.
Fuel stations along the U.S.-Mexico border, where motorists frequently cross into the U.S. and are already familiar with self-service fueling, have been among the first to adopt the model.
Retail stations located near warehouse clubs such as Costco and convenience stores like OXXO have also embraced the format because of their high customer traffic, with motorists more likely to prefer fueling their own vehicles.
“The customer segment where we see the greatest potential is private motorists, particularly younger, highly tech-savvy consumers who pay for everything with a bank card or their cellphone,” said Julio Escandón, a digital payments consultant at Mexico City-based consulting firm Sustergia.
One of the main advantages of self-service fueling is that it allows stations to operate around the clock.
Consultants said a recent Mexican labor reform could further accelerate the adoption. Under the legislation, Mexico will gradually reduce the standard workweek from 48 hours to 40 hours between 2026 and 2030.
“The hourly cost of employees will increase because they will be working fewer hours,” Escandón said, adding that some retailers could seek to offset higher labor costs by reducing staffing levels.
Numbers estimated by Mexico City-based newspaper El Economista, citing industry group Ampes, suggest that as many as 4,000 fuel stations could adopt self-service fueling by 2030.
Still, consultants said retailers should not overlook the “human layer” of service stations.
Trained attendants help ensure payment transactions are completed successfully and assist customers when digital payments fail because of connectivity issues or other technical problems.
Attendants also provide value-added services such as checking tire pressure, changing engine oil and cleaning windshields, while earning tips for those services.
“As electronic payments become more common, attendants will have fewer opportunities to receive cash tips, and we don’t want demotivated or frustrated attendants,” Escandón said.
In a recent interview with OPIS, Mexico City-based regulatory lawyer Luis Guzmán said additional pressures, including Mexico’s fuel price caps, which have squeezed retailers’ profit margins per liter, could provide another incentive for operators to adopt self-service fueling as a way to reduce labor costs and improve profitability.
“The labor cost of an employee is significant. Now imagine a station with about 15 employees, which is roughly the average. If you can replace just three of those positions with self-service, it’s definitely something worth considering,” Guzmán said.
Reporting by José Luis Adriano, jadriano@opisnet.com; Editing by Karla Omaña, komana@opisnet.com and Michael Kelly, mkelly@opisnet.com