Australia’s convenience industry has been described as one of the strongest in the world, with new data showing that the sector is outperforming the grocery sector.

The newly released Australasian Association of Convenience Stores (AACS) 2016 State of the Industry report found that the Australian convenience industry is now valued at AUD $8.3 billion, excluding petrol sales.

Value growth in the convenience channel for 2016 was 4.5 per cent, outpacing pharmacy, liquor and grocery.

AACS’s Chief Executive Officer, Jeff Rogut, has attributed the growth in convenience to innovation from leading businesses.

“The short and long term outlook for the convenience industry in Australia is undeniably positive and the 2016 result underline the value proposition of convenience stores in the Australian retail landscape,” he said.

Food plays vital role in convenience sales

Food accounted for 44 per cent of all convenience store sales in 2016 with Rogut saying more progressive food offerings represents the future of the industry.

“Convenience stores are increasingly capitalising on important growth categories like On the Go Food and fresh coffee, continuously elevating the quality, variety and freshness of the food on offer,” he said.

Convenience sales help with falling petrol prices

Fuel sales volumes grew by 5.9 per cent in 2016, up from 1.8 per cent in 2015.

Petrol prices showed a -9.2 per cent year-on-year drop. Customers are however spending more money on convenience items within petrol station stores to make up for the price fall.

Tabaco still contributing significantly to sales

Despite increasing taxes on tobacco, the product category is still accounts for approximately 38 per cent of a typical convenience stores sales.

“Interestingly, while tobacco price boards play an increasingly integral role, 85 per cent of convenience shoppers still choose their preferred brand, despite tax hikes and plain packaging legislation,” Rogut said.

Call for convenience be able to sell packaged alcohol

Rogut used the release of the report to speak out about recent recommendations from the Select Committee on Red Tape which he said calls for convenience stores to be able to sell packaged alcohol.

“Convenience stores around the world are able to sell packaged alcohol and Australia is one of only a few countries where this is illegal,” he said.

“There’s no credible reason for this and the recent Select Committee recommendations have shined the spotlight on this inconsistency,” Rogut stated.

Extracted from Australian Food News