SUPERMARKET PUSH INTO CONVENIENCE RAISES INTERESTING QUESTIONS

MEDIA RELEASE
October 10, 2014
With the major supermarkets reportedly looking to rollout smaller outlets in city locations to compete with traditional convenience stores, the Australasian Association of Convenience Stores (AACS) has raised a few interesting questions about this strategy and renewed calls for a level playing field in the retail sector.
Speaking from the USA where he is attending the NACS Show, the largest global convenience conference and exhibition, AACS CEO Jeff Rogut said it will be important for the ACCC and other regulatory bodies to ensure convenience stores and small businesses in general are not disadvantaged by such a strategy from the major chains.
Price is one area to watch, according to Mr Rogut, while the unfair restrictions on convenience stores selling packaged alcohol, for instance, will be thrust into the spotlight.
“It will be important to ensure the retail environment is competitive should the major chains push ahead with such a strategy. For instance, we would be concerned if schemes similar to the previous excessive fuel discounting were to be introduced,” Mr Rogut said.
“The AACS has always argued for less – not more – regulation in the retail sector to enable small businesses a greater opportunity to compete. As an industry we are not fearful of the competition in city locations from the majors so long as the playing field is level.
“Packaged alcohol, for instance, remains readily available from supermarkets yet convenience stores are prevented from competing in this category. It makes no sense for two large chains to enjoy a favourable trading environment in this category, especially if they are to be competing directly with small businesses.
“We are sure the ACCC will be closely following what the supermarkets are doing to rejuvenate their business model to ensure small businesses are not disadvantaged and anti-competitive behaviour doesn’t eventuate,” he said.
Mr Rogut said the fact the major chains were looking to the convenience model is evidence of the industry’s strong performance in recent times.
“The year on year growth of the convenience industry in Australia, particularly against the backdrop of challenging retail conditions, is a testament to the professionalism and commitment to innovation among the retailers and suppliers to our industry,” he said.
“Our value proposition remains clear and by driving innovation and putting the customer experience first, our industry has cemented a bright future. Clearly this strong performance has drawn the attention of the major chains.
“With increased scrutiny of international supermarket business models, including the decline in profitability of certain large UK chains, it’s perhaps not surprising to see the majors in Australia look at the convenience market. But this is a model our retailers know better than anyone and we welcome the competition, so long as it occurs on a level playing field,” he said.
Further information:
Jeff Rogut
Chief Executive Officer
Australasian Association of Convenience Stores
Ph: 0467 873 789
Media enquiries:
Stephen Naylor
Wise McBaron Communication
Ph: (02) 9279 4770