In 2015 the Australasian Association of Convenience Stores (AACS) celebrates 25 years as the peak body for the convenience industry in Australia. C&I WEEK asked AACS CEO Jeff Rogut what 2015 held for the convenience industry.
According to Mr Rogut, 2015 will see an increased focus on customer service and on the convenience value proposition, stores will look to optimise key categories and capitalise on new opportunities. In addition impacts from falling petrol prices and tobacco packaging will be key. Mr Rogut is optimistic that governments will begin to take steps to reduce the problem of petrol theft and that the recommendations of last year’s Competition Policy Review will help to enable small businesses to compete more effectively and fairly with the major chains.
Recent moves by the supermarket chains into the convenience space will undoubtedly continue to gain momentum in 2015, as Mr Rogut says, “Convenience and small store retail has been noted globally as having high growth potential, so it’s no surprise to see traditional supermarkets seeking further entry into this space. Longstanding convenience retailers however ‘get this’ industry and it is important that they and their suppliers continue to innovate and offer a high level of service to be able to compete with any new entrants”.
According to Mr Rogut, “It is critical that as the drive to innovate gathers momentum, convenience stores focus on customer service. This year the retailers and suppliers in the convenience industry must remember the value proposition we provide and capitalise on the point of difference we offer. An unwavering focus on customer service is essential in the ever-evolving retail landscape,” he said.
Mr Rogut told C&I that, as the larger supermarket chains enter the convenience channel, “AACS will continue to look to the ACCC and regulators to ensure that there is a level playing field as they did with excessive discount petrol discount dockets.”
The need to optimise performance of key categories has never been greater Mr Rogut said. “In particular, in line with the performance of key growth categories in recent times, a focus on food and beverages is what customers are demanding and this must be considered alongside the need to provide healthier options.
“However it’s also important for the industry not to lose sight of the needs of our core customer base and core categories including tobacco.”
Mr Rogut is cautiously optimistic that governments may finally be taking petrol theft seriously. He says that this crime that has been unaddressed for too long – to the point where it has spiralled out of control; costing the convenience industry approximately $60 million per annum nationally. “The recent change in government in Victoria gives us reason to be optimistic that something might finally be done about this crime. While a national response to petrol theft would be ideal, AACS will seek to work closely with all state and territory governments to highlight the serious nature of this crime and, more importantly, identify and implement workable solutions that don’t prevent convenience stores from going about their business,” he said. AACS has previously proposed measures such as heavy fines and loss of licence demerit points as deterrents to petrol theft.
In its submission to the Competition Policy Review last year, AACS outlined various concerns, issues and – importantly – solutions to enable small businesses to compete more effectively and fairly with the major chains. AACS is hopeful that the review will produce outcomes that will make for a more level playing field. According to Mr Rogut, “Deregulation in the retail sector has the potential to open a raft of possibilities for small businesses and the convenience industry as a whole. It is essential to create and foster a better and fairer competitive balance. The Competition Policy Review could be the catalyst to secure a genuine improvement in the competitive environment for small businesses. It represents a major opportunity, one we cannot afford to miss.”
AACS will continue its push to secure the right for convenience stores to sell packaged alcohol and to rally against proposals to implement new taxes and regulations that impact unduly on small businesses. Mr Rogut said that, “issues such as endless tobacco hikes, rumoured taxes on products like confectionery and soft drinks and proposed container deposit schemes will all negatively impact small businesses and the AACS will remain vigilant in standing up for the rights of these businesses”.