AACS 2022 State of the Industry Report reveals a thriving $10bn industry

Brett Barclay reported the findings of the 2022 AACS State of the Industry Report at the AACS Connect 23 Summit in Melbourne this week. Here, Theo Foukkare, CEO, AACS, shares an overview of the Report, which has revealed that the convenience industry is thriving.

We started 2022 with significant challenges as Covid cases skyrocketed and ran through the community as borders opened and we were able to move freely again. Then came the floods, which placed significant pressure on many parts of the country and affected confidence, while supply chain disruptions and labour shortages continued to plague most industries.

Immunisation rates climbed quickly, and we were all finally able to start living in the new normal albeit with big changes through the adoption of work from home policies now part of how we work.

Against this backdrop of uncertainty, rising business operating costs and changing consumer behaviours, the channel had a tough first half of the year declining by -0.9 per cent. This coincided with the beginning of the end of free money, as interest rates started to rise to tackle rising inflation.

The second half of the year saw convenience retail sales rebound as consumers increased their mobility for work, holidays and getting back to normal routines, with the full 2022 calendar year delivering +7.4 per cent growth on 2021, delivering incremental retail sales of $693 million.

For the first time the industry broke through the $10 billion retail shop sales, a big milestone.

Food and Beverage ended the year with growth of +16.7 per cent delivering an extra $769m in sales, while Non Food declined -1.6 per cent or -$76m led by Tobacco, which dropped -3 per cent or -$107.4m.

Foodservice and Beverages continue to shine as retailers invest heavily in these offers, together delivering incremental sales of +$570m over the 12 months.

Foodservice has now achieved double digit growth for six years running, now contributing almost $1.2 billion to be the fastest growing category. We continue to build momentum and provide everyday Australians with great quality food to keep them recharged and rehydrated.

Store growth continued, adding +102 stores for the year to finish the year at 7,180 stores up +1.4 per cent. This was mainly driven by the independent retailers with new to industry stores being rolled out at record numbers.

After a concerning start to 2022 and ongoing speed humps throughout the year, while operating in a very challenging environment the industry has delivered a strong retail sales performance.

I would like to personally thank all retailers who took the time to provide their data in confidence for the report, which makes it the most comprehensive and complete picture of sales for Convenience Retail in Australia. Thank you also to Brett Barclay and the team at CMA for the report and to Coca-Cola Europacific Partners for their exclusive sponsorship of the report.

This article was written by Theo Foukkare, CEO, AACS and has been shared with permission.

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