In this series, C&I investigates the future of roadside retailers and their ability to survive and thrive in an ever-changing environment.
C&I has been speaking with leaders in the field about how they see the petrol and convenience industry adapting to the changes in the way Australians are using the channel.
This week we speak with Darren Park, CEO, UCB Stores.
C&I: What changes have you noticed in roadside retail over the past 12 months?
Park: From an Independent Retail point of view, Roadside Retail has dealt with more change in the last two years than in the previous two decades and as a side effect, we’ve all grown more resilient. Spending behaviours are shifting, and people are more willing than ever to buy from businesses that resonate with them because of location, ease of access, safety and solving more shopper missions than we might have previously.
As an Industry, we have site locations right across Australia that provide us with a natural advantage – if we choose to embrace that challenge. Shoppers are also returning to in-person shopping so businesses that know their customers, speak to them and genuinely listen to them, will be best prepared.
As a leading independent buying group, what makes us and our members strong is communication and two-way interaction – we have all learned to communicate across various media, using a combination of print media, email, eDMs, SMS, MMS, social media and we are seeing these capabilities being used with growing effectiveness at store level too.
C&I: What categories are driving growth in-store at UCB and do you have data supporting this?
Park: We have substantial data, facts and insights into how a broad portfolio of our member sites are performing. Whilst we don’t necessarily publish these, we use them to improve and measure our shared retail performances. The best measures of improvement in roadside retail are sales performance, traffic conversion to transactions, shopper satisfaction and retail margins. We see all our hard work moving those metrics in a positive direction, but we could be doing even better which leads me to my next point. What we all know from a procurement perspective is that cost of doing business is rapidly increasing, those facts are the same for both trade partner and retailer.
We need all trade partners to recognise that we share a common interest in shopper satisfaction and value. If we see product inflation escalate too rapidly and retailers can’t recover this through instore pricing, category growth is at risk!
C&I: How has UCB adapted it’s in-store offer over the past few years?
Park: Across the over 1250 UCB Members, change is a constant. I think the biggest change we are managing and are still improving on is food. Not each site has the need to build a QSR style Food Service offer, but every site needs to sell shopper mission relevant Food. So, what we are doing is informing and educating members to do the simple retail steps well and ask shoppers what their needs are.
What we are seeing is a growing sophistication with fit outs where appropriate and also tailored offers that are relevant for today. What is a timeless need is that a full display of pastries and other snacks, presented in an appealing way with speedy service times remains a core focus.
C&I: What changes to roadside retailers do you expect to see in the future?
Park: Speed, accessibility and reliability are fundamental to any well utilised transport solution. Have all three and people will want it, people will use it and people will pay for it. I don’t necessarily know what the future will look like, but it’s these fundamentals that I truly believe will guide all roadside retail on that journey.
C&I: Have you noticed any emerging trends within the industry?
Park: Many of our industry trade partners have businesses across multiple channels, from convenience to Foodservice and Grocery. Over the years, we have worked with many in the industry to support channel differentiation, but as an Industry have we been rewarded for that approach? My largest issue is with pricing conflicts across customers and channels, especially Grocery.
There are stark differences in Convenience vs Grocery. In Grocery, there are in many cases lower margins, costs of just getting in the door, contracts and terms that strongly favour retailers, logistical issues, costly data access and the list goes on. Convenience is a channel that allows you to build brands – and is at the sharp end of NPD. We can’t allow the bad elements of “Grocerfication” to enter our channel.
C&I: Do you have any examples of how UCB has adapted or will adapt its offer to cater to the introduction of electric vehicles?
Park: What impact good, bad or indifferent EVs will have on our channel remains at best a guess. What we do know is that as an Industry we can and do adapt to any and all challenges that we have faced. Right now, we have some very nice retail offers that support shoppers and travellers when they need to rest, recharge or meet friends and colleagues in a convenient and safe location.
We will all need to be thinking about the changing needs of the EV driver, their passengers, and their missions but what we don’t know is “What will an EV of the future look like”? How could this change the way shoppers behave? What if the car’s “brain” needs to accept an emergency software download for example? Will they need to park somewhere safe to do it and how long might that take? Irrespective, I still truly believe that mobile shoppers will value our retail offers.