The nation’s petrol stations and convenience stores want to capitalise on the growth of electric vehicle charging stations by pushing into the areas such as offering ready-made meals that challenge the fast-food industry’s supremacy.
The growth of Australia’s electric vehicle fleet is expected to keep drivers at charging stations longer and that’s when the Australian Association of Convenience Stores and its more than 7000 members believe there is a niche opportunity to sell food, coffee and other groceries.
Although drivers filling their tanks with petrol or diesel on average stay at a petrol station for five minutes, that “dwell time” will blow out to as much as 20 minutes as they recharge their EVs.
The latest “state of the industry” report from the AACS, released on Wednesday, has revealed that in calendar 2022 the convenience store sector – dominated by petrol stations – for the first time broke through $10bn in retail shop sales.
Rebounding out of Covid-19, during the second half of the year convenience store sales surged as consumers increased their mobility for work, holidays and returning to routines. The full 2022 calendar year delivered them 7.4 per cent growth on 2021.
According to the industry’s peak body, the food and beverage category ended the year with growth of 16.7 per cent while non-food retail declined 1.6 per cent – led by tobacco, which dropped 3 per cent.
The average transaction value grew 0.2 per cent to $10.74 as the frequency shoppers visited convenience stores rose to 2.7 times per week. Retail sales within the stores rose 7.4 per cent, food retailing was up 6.8 per cent, online up 8.4 per cent and cafe, restaurant and catering improved by 25.4 per cent.
The overall industry margin increased to 35.2 per cent. There were improvements in some categories through promotional mix management and a decline in the value of lower-margin categories.
Food service has now achieved double-digit growth for six consecutive years, contributing more than $1bn to be the fastest growing category and underlining the importance of food on offer.
“Coffee, fresh food and home delivery will be some of the key drivers of the industry’s growth going forward,” AACS chief executive Theo Foukkare said.
“In terms of the level of food prepared fresh on site, definitely we are seeing significant investment both from traditional and non-traditional entrants into the industry.”
Traditionally, petrol stations and convenience stores ran behind supermarkets and fast-food chains, but Mr Foukkare believed the evolving nature of the local convenience store was starting to deliver new opportunities.
“So if you think about it, on average, Australians eat 10 out of 21 meals out of the home every week across breakfast, lunch and dinner, and historically the go-to has been McDonald’s or a drive-through coffee shop, or that type of thing,” he said.
“And as our industry continues to invest in getting their bacon and egg muffins right, getting their takeaway lunches right, whether it be burgers, salads, pastas, sushi, we are catering to the time-poor customer that is in transit.
“But also we are selling prepared meals … as well as a large number of our members are investing heavily in commercial kitchens on site to be able to make take-home meals both for lunch and for people who pick up on the way home or order delivered to the house.”
The growing trend of the midweek top-up grocery shop should also benefit petrol stations and convenience stores, Mr Foukkare said.
This trend was evident in partnerships such as that struck between Ampol and Woolworths where, at its Metro store branded sites, consumers can buy fresh meat, salads, vegetables and bread baked on site.
“And as the offer continues to develop we believe that midweek top-up shop will play an integral role in that continued growth as well for our industry,” Mr Foukkare said.
Mr Foukkare said greater inroads were being made by his members into the fast-food industry.
“What we have is over 7000 locations that are closer to most people’s homes, and on major highways and suburban arterials that get people time back; no different to quick-service restaurants,” he said.
“So a lot of our members now are putting in, and have done for some years, drive-through so that they can capture that breakfast and lunchtime trade, whereas historically that’s all been left to the QSR industry.”
The slow creep towards EV, and the corresponding retreat of petrol and diesel cars, should also help petrol stations and convenience stores spruik their in-store wares to drivers.
“So if you think about the future with EVs, there’s going to be somewhere between 12 and 20 minutes’ charge time and at the moment drivers spend on average about 5 minutes by the time they fuel their car and go into the store and come out,” he said.
“So that dwell time will increase and part of the industry’s move to ensure that we’re ready for when EVs come in.”
Extracted in full from: Petrol stations and convenience stores post strong growth in 2022 | The Australian