The 2021 AACS State of the Industry Report has revealed that the convenience channel enjoyed 19 per cent growth across total convenience store and fuel sales in 2021, delivering $42.4 billion despite the challenges faced throughout the year.
Total retail shop sales grew by two per cent overall, now valued at more than $9.4 billion.
This growth was highlighted in the launch of the 2021 AACS State of the Industry Report, which was presented at yesterday’s AACS Connect 22 conference.
The channel’s growth was driven by strong performance across three key categories: foodservice delivering 12.3 per cent, packaged beverages delivering 11.3 per cent, and confectionery delivering six per cent. Fuel volume also jumped by four per cent.
Importantly, customer transactions continued their march north as more consumers discover that the convenience channel is a great place to shop for essential items, up 0.8 per cent. The migration to foodservice continued in 2021, with the category now achieving strong positive growth for six consecutive years.
Brett Barclay, Director of CMA, highlighted a 3.7 per cent decline in tobacco, which five years ago would have been disastrous for the channel, but the strength of growth categories such as foodservice and even hot beverages, has balanced the tables.
Foodservice was the highest percentage growth category at 12.3 per cent per cent and Barclay predicts that there is still further room for growth within this space. As the food for now and food for later ranges continue to be developed, the convenience channel will start to erode share away from QSR retailers.
Packaged beverages jumped 11.3 per cent to become the second largest category. All but one sub-category within packaged beverages was in growth, with energy drinks having a particularly strong year.
Confectionery remained the third largest category, growing by six per cent, largely driven by impulse purchases.
In terms of store counts, Barclay mentioned particular growth in independent store numbers, and said for the first time the numbers are showing an almost 50/50 split between the major corporate and independent retailers. Total stores reached 7,078, up +0.9 per cent on last year, with independents driving the new store growth up 2.2 per cent and the majors down 0.4 per cent.
One of the highlights was the journey ahead for convenience and roadside retailers as Australian consumers transition to alternative fuels. Whilst demand is strong for EV’s, there are significant barriers holding this back in Australia from Government investment in infrastructure to lack of availability of affordable EV options to buy. Traditional fossil fuels delivered via internal combustion engines will still be the major energy source for many years to come.
Convenience and roadside retailers are extremely well positioned to continue to adapt, innovate and win more of the customers spend not just while they are on the go but in their homes.
The full State of Industry Report is the most in depth and comprehensive review of the convenience channel. It is available to AACS Members as part of their Membership or alternatively can be purchased. If you are interested, please contact AACS CEO Theo Foukkare at firstname.lastname@example.org.