Home' The Channel Magazine : National Newsagent November/December 2012 Contents CONVENIENCE
In reality, a convenience store is anything that the customer
treats as a convenience store. So, like it or not, newsagents are very
much in the convenience business. A lot of other stores are in the
convenience business as well. Corner stores, mini marts and service
stations as well as the major supermarkets are all chasing the
According to research companies Nielsen and Bis Schrapnel,
the 5000 odd stores that make up the major convenience chains
are responsible for only about one third of the total $20 billion-
plus in convenience sales. It stands to reason that Australia's 4000
newsagents are picking up a significant proportion of the balance.
While there has been a lot of gloom and doom in all areas of
retail in recent years, convenience sales have held up remarkably
According to this year's Convenience Industry Report, published
by the Australasian Association of Convenience Stores, merchandise
sales at the major convenience chains grew by 2.6 per cent last
year. That compares with an underlying CPI of 3.6 per cent. But
comparing the industry performance to the CPI inflation rate can be
misleading because the CPI includes a number of areas where price
hikes have been high---like education, energy and health costs.
In several areas of retail prices have gone down. In fact, various
reports have suggested a food price inflation rate of minus 2.5 per
cent for last year. According to the Australian Bureau of Statistics,
total retail grew by 2.4 per cent in 2011. But spending at cafes and
restaurants fell 1.8 per cent and food retailers saw a 0.7 per cent
So 2.6 per cent for convenience is comparatively good for an
industry that depends on foodstuffs for 44 per cent of its sales.
SLOWING AND GROWING
The beverage category was the strongest convenience category
growing at 10.1 per cent, with growth coming from flavoured milk,
energy, frozen carbonated beverage and hot coffee. The beverage
category has continued to grow over the last five years and is now
the largest contributor to total convenience store margin.
Tobacco remains the largest sales category and represents 34.2
per cent of total convenience turnover, growing in value by 7.2 per
cent on historically declining unit sales. The telco category went
backwards last year by an alarming 15 per cent. Confectionery also
had a tough year with a 0.4 per cent drop in value and 1.5 per cent
decline in unit sales.
The front counter is prime real estate for convenience sales and
the three categories that hold the most real estate are tobacco,
communications and confectionery; they all suffered a decline in
unit volume last year. This means that there is still a lot of hard
work to do to re-engage the convenience customer and to look at
opportunities to better use this space in the future.
With convenience and impulse sales playing an increasing
role in newsagents' profitability, it is more important than ever
for newsagents to keep abreast of retail trends and to adopt best
industry practice. Every second year, there is a national convenience
event which showcases the industry, with all of the latest products
and services. This represents a great opportunity for newsagents.
KEEPING UP WITH CONVENIENCE TRENDS
The Convenience & Impulse Convention & Expo will be held
Wednesday 13th to Thursday 14th March at the Melbourne Exhibition
& Convention Centre. At last year's C&I 2011 event in Sydney, there
were 115 newsagents in attendance among the 1400 visitors. In fact,
over 14 per cent of all retailers who visited were newsagents.
The focus for C&I 2013 will be "Success Though Knowledge",
with a free two-hour 400 seat convention session on each morning
of the event, before the trade show opens at mid-day. The first
morning will be focused
on Lessons from
within the convenience
channels, which will deal
with international best
practice and current
within the industry.
The second morning
will be devoted to
Lessons from other
retail channels, with
two acclaimed retail
speakers who will provide
fresh insights on how
convenience retailers can
better focus their efforts
on today's customer.
C&I 2013 will also
have a special industry
breakfast for small
players in convenience
Everyone knows what a newsagency is. But, for the past twenty years or more, the
convenience store industry has been scratching its collective head trying to work out what
a convenience store actually is. It seems that nobody has been able to come up with a
satisfactory definition of a convenience store.
By Keith Berg, Convenience & Impulse Retailing
National Newsagent November/December 2012
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