AACS releases 2018 State of the Industry Report

    The 2018 AACS State of the Industry Report has been launched today. It reveals a strong growth result of 2.4 per cent in 2018, boosting the value of the convenience industry to $8.6 billion – and this is excluding petrol sales.

    AACS CEO Jeff Rogut puts the result down to the efforts of leading convenience operators to evolve their offer to meet changing customer needs.

    “To record such a strong result in a challenging market is a credit to the leading retailers and suppliers in our industry to adapt their offer in a way that resonates with their customers and reinforces their value proposition,” Mr Rogut said.

    “On the basis of this result and the innovations happening in stores and down the supply chain, we have every reason to remain confident in convenience.”

    In other key numbers, the average transaction value over the year was flat at $9.90, while the average merchandise transactions per day was up one per cent to 483. The number of shopper visits improved from 2.6 visits per week in 2017 to 2.7 visits per week in 2018.

    A focus on food and beverage

    According to the report, food and beverage merchandise outperformed growth of non-food categories for the fourth successive year. Recording $3.8 billion in sales, this was up $101 million or 2.7 per cent over the 2017 result.

    Non-food, however, still showed growth of 1.9 per cent, representing an increase in sales of $90 million to total $4.8 billion.

    Looking at key individual categories, the hot dispensed beverages category has grown 14.6 per cent, while take home food was up 10.1 per cent in merchandise sales in 2018.

    The importance of tobacco

    Tobacco is still a very important legal category for convenience stores, with the contribution of legal tobacco sales to the overall mix increasing in 2018 to 39.5 per cent.

    “The AACS is focused on protecting the convenience industry’s share of legal tobacco sales while seeking reform in areas including the development of an appropriate legal framework for the sale of e-cigarettes and other stop-smoking devices through convenience stores, and cracking down on the scourge of illicit tobacco being sold in communities around Australia,” Mr Rogut said.

    The value of tobacco sales grew $204 million in 2018, growth of 6.4 per cent over the 2017 result. The industry saw changes in shopping habits, says AACS, with consumers increasingly switching to smaller pack sizes to combat regulated price increases.

    Petrol theft on the rise

    The AACS State of the Industry Report shows petrol theft, which had been on the decline over the last two years, spiked again in 2018 as the increase of the average price of fuel rose over 11 per cent.

    Theft increased by 4.4 per cent to now cost the average convenience store $169.67 in losses each week.

    After a 10.1 per cent increase in fuel prices in 2017, AACS says the industry again had a significant average price increase of 11.3 per cent in 2018. This equates to a 24c per litre increase over the last two years or an extra $8.63 per transaction based on the average of 36 litres per transaction.

    ‘We need to embrace change’

    “We recognise over the next five years the changes coming to retail and leading convenience retailers are already looking at ways to improve their offer to stay relevant,” Mr Rogut said.

    “As an industry we need to embrace change in terms of the merchandise we sell, the customers we appeal to, the technology we use and may need to use, and more. There are elements of disruption upon us in many spheres. Data analytics will play an increasingly influential role. There are regulatory changes that may be imposed upon us as we tackle another election year.

    “It is important that our industry not only embraces change, but in some areas drives the changes needed to survive, grow and profit.”

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