Page 53 - Demo

GOING FOR THE ON-THE-GO DOLLAR On-the-go food has become embedded in lives more time pressured than ever. By IRI Lead Consultant Jackie Campbell The convenience channel failed to experience the same uplifts as other channels when consumers rushed to pantry fill on essential foods and household items. Sales were flat across March but declined from early April (down 7.2 per cent compared with last year) without the injection of Easter and school holidays and with fewer commuters shopping within the channel. This compared with supermarkets, which gained uplifts of 23 per cent in March, and US convenience with slight uplifts in March (one to five per cent) and declines in April (one to nine per cent). During March, consumers stocked up on toilet paper, paper towel, hand sanitiser, firewood and gas bottles as paper products, personal wash and fire needs categories rose into the top 10 driving growth and consumers shopped across retailers and channels to find sought-after essentials. In April, with fewer cars on the road and fewer Australians heading for the Easter break, core convenience categories that were previously growth drivers turned to drainers, with double- digit declines in value tobacco, hot drinks, sandwiches, soft drinks, gum, hot pastry and water. The impact was felt more in food, which declined 12 per cent versus a year ago compared with non-food declines of 2.9 per cent. As consumers turned to online and home delivery to limit shopping trips or navigate out of stocks, the increasing popularity of delivery services such as Jimmy Brings, Uber Eats and Deliveroo, as well as meal kit services Marley Spoon and Hello Fresh poses challenges to convenience stores, which benefit from vehicular and foot traffic. Some restaurants and cafes also began selling household essentials, with even McDonald’s offering milk, bread and eggs. As restrictions ease in some states and territories, it remains to be seen whether some of these consumer habits will continue. The challenge for the convenience channel will be to continue its role as a safe and essential service to local communities. Innovative responses among convenience retailers have included 7-Eleven capitalising on its acquisition of Tipple by launching home delivery in Melbourne in April, providing essentials and snacks via contactless delivery; and BP continuing its Couchfood offer in conjunction with Uber Eats and Deliveroo, as well as launching initiatives in support of healthcare workers. Of ongoing concern to retailers and manufacturers will be the impact of the “recessionary mindset” as Australians concerned about their economic and personal safety change their shopping behaviour. IRI’s April consumer survey showed 65 per cent of households indicated they were reining in spending due to the economic impacts of coronavirus. Retailers in all channels will be chasing value-conscious consumers, driving pricing and promotional programs to win price perception. Retailers will use private label in many categories to help win this battle. Despite the recessionary mindset, consumers will be looking for affordable treats, which convenience stores are well placed to provide. More people are working from home, therefore on roads and public transport less, which presents both opportunities and challenges for convenience retail. An opportunity is there to attract and retain local customers and increase loyalty to individual stores, and to capitalise on the potential boost in domestic tourism which may bring new shoppers, particularly to regional stores. Sources IRI MarketEdge Convenience data to 3/5/20. IRI Shopper Panel data. IRI US Convenience Total Store View. IRI Research. CONVENIENCE ESSENTIALS "The challenge for the convenience channel will be to continue its role as a safe and essential service to local communities." About Jackie Campbell Jackie has been working in insights and consulting at IRI for seven years and is currently a lead consultant in the food and beverage sector across the grocery and convenience channels. Previously she spent around seven years working in the convenience channel. About IRI IRI is a leading provider of big data, predictive analytics and forward-looking insights that help FMCG, OTC health care, retailers and media companies to grow their businesses. For more information on how IRI can provide data and insights to grow your business, visit IRIworldwide.com.au, or phone +61 2 8789 4000. JUL/AUG, 2020 CONVENIENCE WORLD 51