A servo’s business model is key to being able to adapt. Businesses that are part of a franchise network or buying group are often able to access support that enables them to react quickly when they need to.
By Peter Howard.
Barely 13 months ago the declaration of a pandemic caused a descent into pandemonium, and the world we once knew disappeared. With panic buying and local lockdowns playing havoc with regular shopping patterns, retailers needed to act fast.
Today, our world is very different. Shopping patterns have altered, loyalties have changed, and local shopping has strengthened in a trend that bodes well for the future of the convenience sector.
With market intelligence key to retail strategy, and buying power vital for profitability, this feature looks at how franchising and other collaborative business models helped many small business owners to not only survive but also thrive during a year in which a significant number of national retailers across the world went bankrupt.
While many Australian retailers experienced economic disruption, the convenience sector remained robust. This is in part because Covid lockdowns led to a resurgence in local and convenience shopping, but also because many of those businesses received important early support.
In the early stages of Covid, a huge decline in fuel sales sent shivers through the service station sector, prompting peak body the Australasian Convenience and Petroleum Marketers Association (ACAPMA) to step in and support its members on a practical level with a range of value-add services.
ACAPMA CEO Mark McKenzie told Convenience World the significant reduction in demand for fuel was a serious concern, particularly as it came before some countervailing trends emerged to help the convenience sector.
“We saw an early threat when we went to the national lockdown in April, with a 40 to 50 per cent decline in fuel right across the industry,” he said. “After the national lockdown, we had the Victoria lockdown and we’ve continued to have selective capital city lockdowns. What that does each time is reduce the demand for fuel because people just aren’t travelling.”
As soon as the fuel threat emerged, ACAPMA realised its members needed to know how to deal with the risk that, sooner or later, their area may be locked down for three or four weeks.
“They needed to develop resilience and understand how they’ll survive that period, particularly if it becomes a very severe lockdown,” Mr McKenzie said. “That means understanding what the restrictions are and what the government has decided about who’s closed, who’s open and what you can or can’t sell.
“There’s a whole lot of information that has to flow out, and one of the things ACAPMA has done over the last 12 months is make that flow our day-to-day business. We’ve connected and hardwired ourselves into every government around the country … Now, as soon as those things are announced, we get it out all to our members with the regular Covid update.
“As an industry body we’ve changed our model, so now it’s all about providing knowledge, particularly during those lockdowns, so people can make informed decisions as quickly as possible.
“That knowledge is focused on helping our members build capability in the three elements of resilience, agility and quality of offering.
“As part of building resilience, we started advocating on financial relief and were heavily involved in the design of JobKeeper under the Council for Small Business Organisations Australia, partnering with groups like the Pharmacy Guild and the National Association of Retail Grocers of Australia to work through what sort of support was needed.
“There were times in the early part of the process where I was working directly with business owners and their bankers so they fully understood what was being put on the table, and what sort of access they had to those support services.”
To read the full feature on franchising, head to the latest issue of Convenience World magazine.