Australia’s convenience store industry achieved considerable growth in 2019 as it garnered a 2.1 per cent increase in merchandise sales, i.e. those excluding petrol.
The 2019 State of the Industry Report, released by the Australasian Association of Convenience Stores (AACS), revealed that the sector achieved merchandise sales of $8.8 billion, despite challenging retail trade conditions throughout the year.
Food to the fore
Contributing to the convenience stores’ growth is the exceptional performance in the food and beverage category, with sales up by nearly six per cent, amounting to $4.038 billion.
On the other hand, non-food categories delivered sales of $4.738 billion, a more than one per cent decline from 2018. This drop was primarily down to weakening tobacco sales.
“The continued strong performance of the convenience…is an ideal accompaniment to the major milestones our industry is celebrating, including the 30th birthday of AACS,” AACS CEO, Jeff Rogut, said.
“The value proposition we provide consumers has never been clearer than right now as the coronavirus pandemic plays out,” Rogut added. “Government has deemed our industry an essential service and we take our responsibility to provide the items people need in these distressing times very seriously. The strong 2019 result, and the way we are still serving our customers today in bright, modern, clean and safe stores, is a testament to the many great operators and staff who make our industry tick.”
The AACS report noted that the value increase in merchandise sales for the convenience channel in 2019 was $179 million, slightly below $201 million (+2.4 per cent) recorded in 2018. However, the average transaction value remained constant at $9.69 while the average daily number of merchandise transactions per store increased by 3.1 per cent at 498.
Adaptability the key to success
Rogut noted of the changes the convenience industry has been going through over the years, saying, “The convenience industry, more than most, has a reputation for adaptation. Over the years we’ve seen categories rise and fall, trends come and go, but through a commitment to innovation, the convenience industry has thrived.”
He added, “In the context of these shifting goalposts, the latest result positions 2019 as one of the convenience industry’s best-performing years of the past three decades, considering the economic backdrop and challenges for retailers generally. The challenges and the changes will keep coming, the COVID-19 crisis being the latest factor to impact our stores, but convenience remains resilient, responsive, innovative and in many areas, ahead of the curve. The outstanding efforts of the retailers and suppliers to convenience give us every reason for continued confidence.”
Rogut reiterated the industry’s concerns regarding the high cost of “unfair” tap-and-go debit card fees.
“We strongly believe that a system known as least cost routing, which automatically routes customer transactions across the payment scheme with the lowest fees, would save money for our members at a time when every dollar counts to keep businesses afloat and people employed,” Rogut said. “We urge the RBA and the banks to move forward with this crucial reform immediately.”
