Jason Joukhador from Ampol says that several pivotal events are expected to impact the convenience retail industry in 2025.
From political developments to health initiatives and global dynamics, these factors will shape the operational landscape for retailers and suppliers. Here are the key events that industry should watch closely, if not already.
1. Federal Election Outcomes
The outcome of the 2024 U.S. presidential election and Australia’s 2025 election could significantly influence the Australian economy. A U.S. president who prioritises free trade or alters tariffs may impact Australian export prices or supply chains, affecting retailers’ costs. Australia’s 2025 election could shift policies around taxes, wages, and labor laws, influencing retail operations. Changes in environmental policy could also affect retailers’ sustainability practices, while economic stability or instability, depending on the election results, will shape consumer confidence and spending habits. Whilst we cannot largely alter the direction, being aware and planning through change is critical.
2. Tobacco Public Health Bill
The tobacco public health bill will have profound implications for convenience stores. The bill has tighter controls, including higher taxes on tobacco products, packaging, and further restrictions on advertising. Retailers in the first half of the year need to adjust their operations to ensure full compliance of the new bill. The continued evolution of the convenience offer will need to respond to the ever-changing preferences of consumers.
3. Geopolitical Events
Australia’s geopolitical landscape will continue to influence the convenience retail industry. Tensions in the region, particularly between major players like the United States and China, can impact trade relations, supply chains, and consumer confidence. Should trade agreements change or tariffs be imposed, retailers might face increased costs for imported goods, affecting pricing strategies. Additionally, geopolitical instability could disrupt supply chains, leading to product shortages. Retailers will need to stay agile, adapting their sourcing and inventory strategies to mitigate these risks.
4. Monetary Policy and Economic Conditions
The Reserve Bank of Australia’s (RBA) monetary policy will play a significant role in shaping the economic environment for convenience retailers. As inflation rates fluctuate, the RBA may adjust interest rates to control economic growth. If rates rise (or remain steady) to combat inflation, consumer spending could soften, impacting sales. Conversely, a low-interest-rate environment may boost consumer confidence and spending. Retailers must monitor these economic indicators closely, adjusting their pricing and promotional strategies accordingly.
5. Technology
In addition to the aforementioned events, technological advancements will continue to transform the convenience retail sector. By 2025, retailers will likely adopt AI-driven solutions for inventory management, personalized marketing, and enhanced customer experiences. Staying ahead of technological trends will be crucial for retailers aiming to maintain competitive advantage.
The convenience retail industry in Australia will face a dynamic and challenging landscape in 2025, shaped by a range of key events. The outcomes of the federal election, the implications of the tobacco public health bill, geopolitical dynamics, and shifts in monetary policy will all play pivotal roles in determining the future of retail operations. By staying informed and agile, convenience retailers can navigate these changes, adapt their strategies, and ultimately thrive in an evolving market.
This article was written by Jason Joukhador for the December/January issue of Convenience and Impulse Retailing magazine.
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