Last week, ACAPMA CEO Mark McKenzie attended the 2019 National Association of Convenience Stores (NACS) Show in Atlanta. This internationally significant event typically attracts around 25,000 people with industry representatives from more than 70 different countries.
Prior to the formal opening of the NACS Show on 1 October 2019, ACAPMA was invited to participate in NACS Global Government Affairs Council. Chaired by NACS President and CEO, Dr Henry Armour, the principal purpose of this Council is to discuss the key issues impacting the petrol convenience industry and share perspectives on the approaches taken by different economies in addressing these issues – many of which are global issues.
“It was a real privilege for ACAPMA to be invited to participate in this Council – it provides an invaluable forum to caucus globally significant issues within the petrol convenience industry and share different perspectives on how these issues can be addressed effectively”, said ACAPMA CEO Mark McKenzie.
“There was considerable interest in Australia’s recent challenges with wage underpayment as well as deep interest in possible legislative and regulatory responses to the Australian Government’s Inquiry into franchising practices”, said Mark
Discussion during the meeting largely centred around three key themes. The first of these issues related to the growing challenges associated with the attraction and retention of a skilled workforce – one that was not only capable of supporting current business models but also agile enough to support the industry as it grappled with the ever changing face of convenience retailing.
This first theme featured prominently in the subsequent Education Sessions that were delivered during the course of the Show. One of the keynote speakers, Mr Jim Knight of Hard Rock Café fame (see https://www.knightspeaker.com/), suggested that the attraction and retention of highly skilled staff in our industry was crucial to the future economic success of the petrol convenience industry in the face of digital and market disruption.
“Jim’s theme of ‘Service trumps everything’ (i.e. product, price, technology and physical enhancement of premises) was a salutary message in the face of the Council’s discussion that attracting and retaining quality people was perhaps the greatest challenge for the global petrol convenience industry – not just Australia”, said Mark.
The second theme related to factors affecting destruction of fuel demand with individual economies sharing different messages about the impact of growing numbers of new fuel-efficient vehicles and electric vehicles on observed fuel demand within individual economies.
An interesting point in this conversation is that the factors relating to demand destruction were not simply about changes in vehicle technology. The growth of the share economy – particularly amongst millennials – was also a significant talking point given that there is a whole generation coming through where car ownership is not considered essential.
“Millennials are discarding cars in favour of car sharing or e-scooters as a means of getting around and this factor appears to be having a far greater affect on fuel demand than electric vehicles at the moment”, said Mark
This second theme was also the subject of a keynote address during the 2019 NACS Show. Jacob Schram (CEO of Circle K) pointed to the fact that there were actually four forces threatening the nature of the traditional fuel business which he promoted in a model called ACES– namely: ‘A’ for Autonomous vehicles, ‘C’ for Connected vehicles, ‘E’ for Electrification and ‘S’ for Shared mobility.
“Jacob’s presentation suggested that we must focus on all four factors impacting our industry – many of which are creating new business opportunities – as opposed to simply watching the developments of electric vehicles”, said Mark
A key message from Jacob’s work is that EV’s are appearing in significant numbers in the global market, but that the rate of market adoption varies dramatically between individual countries. Countries like Norway, where the national government introduced strong incentives for EV adoption 5 years ago, are projected to see 100% of new car sales being EV’s by 2025.
But Norway is the exception to the rule with market adoption of EV’s in the larger economies expected to vary markedly through to 2030. China is very much in the lead in this area with a predicted adoption rate of 25% to 50% of new car sales by 2030, followed by the European Union (30% to 40%) and the United States (15% to 30%).
“Australia doesn’t figure in current projections, but our inherent exposure to the new vehicle industry within these three economies means that we need to watch this agenda and adapt accordingly”, said Mark
The third theme was one introduced by NACS President Henry Armour that related to the North American industry experience. This theme centered around the simple proposition that our industry was not good at telling its’ own story – telling policymakers and the wider national community about the very positive role that the petrol convenience industry plays in meeting the everyday fuel and convenience needs of the local communities that we serve.
“Henry made the point that if we, as international industry associations, don’t tell the story of our industry then no-one will hear it as no other stakeholder is in a position to tell such a story credibly”, said Mark
While all the country delegates in attendance talked about the negative perceptions of our respective national industries within government, Henry (and the Canadian delegate Michael Hamoud) highlighted the success that they have collectively had by promoting simple stories about what the many local businesses do for their communities on a daily basis.
Some of this discussion related to large state-wide campaigns where politicians were invited to spend the day in a C-store and donate their wages to charity. Others were simply promoting stories via social media about how their members are engaged in their community on a daily basis.
“This is not about sugar coating what we do, but simply communicating how the petrol convenience industry quietly goes about its business serving the fuel and convenience needs of local communities”, said Mark.
“This last theme was quite instructional and is something that ACAPMA is going to have a much closer look at because, at least in this country, the good work that our industry does in local communities around the country is often drowned out by negative commentary – some which is justified and some which is not:, said Mark.
“Our participation in the NACS Global Government Affairs Council was invaluable”, added Mark
“Not only did we get an opportunity to share a perspective on the issues impacting our industry but we gained first-hand knowledge about how other economies are addressing the very same issues we are facing” , said Mark
“Our participation in the NACS Global Government Affairs Council will continue as part of our increasing focus on all of the issues affecting petrol-convenience businesses in Australia – both the fuel and non-fuel related aspects of these businesses”, concluded Mark