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NEWS ‘STRONG RESULTS’ FOR CONVENIENCE DESPITE COVID-19 The Australian convenience industry’s latest performance data follows what AACS says is the “most tumultuous” half year in the nation’s history. But on balance, according to the industry body, the numbers are encouraging. The ‘AACS State of the Industry Half Yearly Report 2020’, launched in August, reveals that the industry achieved sales growth of 0.8 per cent for the half. This was helped by a two per cent quarterly sales increase in the June quarter. Nevertheless, says AACS, just as the pandemic has impacted states differently, so has the convenience channel varied in performance across borders. Over the year to date, Victoria recorded a 3.7 per cent decrease in total sales while NSW was down one per cent. On the flipside, Western Australia achieved significant growth of 9.3 per cent for the half, while South Australia was up 3.4 per cent and Queensland convenience stores recorded sales growth of 3.3 per cent. “The first half result for the convenience channel, particularly given the circumstances, is very strong and a testament to the quality of service, safe store environment and consistent hard work of the operators and employees in our industry,” AACS CEO Jeff Rogut said. “Growth has been maintained in many categories and even though people are staying home more, meaning fuel destinations visits are down, those categories which have been the subject of innovation and which are the future of our industry, including fresh food and coffee, are well placed to rebound once a sense of normalcy returns. “The work AACS has done with government to ensure convenience stores continue to be deemed an essential service has been an important comfort to customers who have relied on our channel for the items they need. “In fact, many consumers prefer the convenience store experience in the current climate because of the safe and clean shopping environment on offer, and because stores are less crowded. “Obviously, challenges remain and the full year result for the industry – like every industry – is likely to be further impacted by the pandemic. But those who work in the industry can be confident that the value proposition the convenience channel provides to consumers is clear. “If anything, the important role we play in local communities across Australia has been reinforced in these unprecedented times.” Performance highlights Growth in the packaged beverages category was subdued at one per cent, with energy drinks and carbonated beverages being the “bright spot”, having maintained strong growth on a moving annual turnover (MAT) basis of 3.8 per cent and 3.2 per cent respectively. The tobacco category is now growing at 1.7 per cent in MAT. Last quarter’s growth of 10.3 per cent stands out, however, says AACS, as the trend towards consumers seeking cheaper options continues to play out. KPMG released its latest report on illicit tobacco in Australia during the first half, which shows illegal products make up about 20 per cent of the total tobacco market. Food on the go was the second highest category in terms of both dollar and percentage growth in 2019 but declined over the June quarter by 4.4 per cent. However, reflecting the “unique circumstances”, take home food was up 7.8 per cent in the last quarter. Hot dispensed beverages, the fastest growing category in 2019, has been impacted by Covid-19 in the first half with MAT growth of 18 per cent in 2019 down to 5.9 per cent MAT thus far in 2020. Confectionery has had a “tough start” to the year with MAT now down 0.9 per cent after a June quarter decline of 10.6 per cent. The gum and medicated category has reported a 29.8 per cent decline over the last quarter. Chocolate blocks picked up some of the slack, though, growing at 5.8 per cent over the same period. The snack foods category had its strongest growth in years in 2019, up 4.1 per cent. However, on a MAT basis, that growth is now 0.1 per cent. The ice-cream category has continued to grow off the back of strong 5.2 per cent growth in 2019, slowing only slightly to 3.6 per cent MAT as at the end of the first half. In the June quarter, though, the growth rate lifted to 8.2 per cent to be the strongest performer of the impulse snacking categories. 12 CONVENIENCE WORLD SEP/OCT, 2020