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INDUSTRY INSIGHT THE COVID EFFECT AND THE RECOVERY Masks, social distancing and sanitised hands are here to stay for a while. As Australia slowly reopens and adjusts to a new world, it’s not the same Australia that was closed down. The Covid-19 pandemic has changed consumers’ beliefs and attitudes, broken habits and threatened livelihoods and health. By IRI Lead Consultant Justin Nel. T he petrol and convenience channel has been significantly impacted by the restrictions imposed due to Covid-19. However, it’s not all doom and gloom as we start to see signs of early recovery in specific categories and states. Consumers are reacting and adapting to new conditions as the P&C channel, like all retail, deals with the effects of the Covid crisis. The channel (food and non-food) is worth $5 billion in Australia, and despite the tumultuous past six months with the bushfires and the seemingly unending ‘coronacoaster’, has had modest value growth of 0.4 per cent compared with the same period last year (IRI MarketEdge Convenience MAT 16/6/20 versus YA). However, not all categories have seen growth, with 68 per cent of employed Australians forced to work from home, changing the routine of more than 10.5 million people. This affected automotive (down 18 per cent compared with the same quarter last year), snack foods (down 12.2 per cent), confectionery (down 9.5 per cent) and ready-to-drink beverages (down 7.6 per cent). Yet, as expected, certain categories have attracted significant increases, with the channel becoming a destination for consumers wanting to avoid the disappointment of out of stocks at traditional supermarkets, as well as escape large crowds. In the latest quarter (ending 14/6/20) total household products were up 12 per cent and total grocery categories up 14 per cent compared with the same quarter a year ago as traditional supermarket consumers directed their spend towards convenience stores to stock up on cleaning essentials – such as household cleaners (up 173 per cent), household disinfectant (up 253 per cent) and bleach (up 132 per cent). As expected, the channel performance is significantly different by state. For the quarter to 14 June, Western Australia is up 8.5 per cent, South Australia up 5.4 per cent, and Queensland up a modest 2.9 per cent. However, unsurprisingly, Victoria is down by 6.9 per cent, with NSW down by 2.5 per cent and Tasmania down by 2.7 per cent. The glimmer of hope for all retailers has been the lightning fast adoption of online shopping, with ecommerce increasing by 80 per cent over the eight weeks to May 15 compared with the same period last year. It will be fascinating to see whether the consumers forced into online shopping remain there when physical stores reopen. While certain categories were less impacted and some states are showing early signs of recovery, it’s still unclear what the road to recovery looks like for the convenience channel. Sources: IRI Convenience Scan 14/06/2020 roymorgan.com/findings/8401-coronavirus-working- from-home-may-2020-202005050514 abc.net.au/news/2020-05-20/coronavirus- sends-shoppers-online-retailers-reconsider- stores/12259808 About Justin Nel Justin Nel is a lead consultant for IRI and brings with him extensive experience in the food and beverage industry. His focus is aligning clients’ business objectives with relevant insights and information, using IRI services to deliver unique strategic views of consumer trends and products that will deliver growth. 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. 36 CONVENIENCE WORLD SEP/OCT, 2020