Watershed year for Australia's convenience industry

15th December 2014
With Christmas fast approaching and Australia’s retailers gearing up for what is hopefully another busy festive season, Australasian Association of Convenience Stores (AACS) CEO Jeff Rogut has reflected on what has in numerous ways been a ground breaking year for the country’s convenience industry.
“The convenience sector’s performance in recent times has reinforced the professionalism and expertise of the many retailers and suppliers in the industry,” Mr Rogut said.
“Amid continuing economic uncertainty, an unpopular budget and an ever-evolving retail landscape, the response of the convenience sector to changing consumer behaviours and needs has contributed to another year of strong performance for the industry.
“Specific challenges remain but, with the need to innovate at the core of what we do, 2015 shapes as another solid year for the convenience channel.
“With next year marking the 25th birthday of the AACS, we will continue to advocate on behalf of retailers and suppliers to ensure small businesses receive the due recognition and acknowledgment they deserve for the important role they play in the national economy,” he said.
Mr Rogut outlined various areas in which the retail landscape has changed this year – areas in which the AACS has been vocal.
Competition finally goes under the spotlight
The Australian Government’s review into competition policy is a positive exercise and something small businesses across the country, including convenience retailers and suppliers, have long called for.
The AACS has been outspoken this year about the need for a more level playing field in the Australian retail landscape. Its submission to the Competition Policy Review outlined various concerns, issues and – importantly – solutions to enable small businesses to compete more effectively and fairly with the major chains.
“We were supportive of the review into competition policy in Australian retail and, based on initial feedback as well as the Draft Report, we have reason to be optimistic that a genuine improvement in the competitive environment for small businesses can be achieved,” Mr Rogut said.
“The AACS has long argued for deregulation as a means of achieving a better and fairer competitive balance. For instance, we will continue our push for convenience stores in Australia to be permitted to sell packaged alcohol as our counterparts around the world are able to do.”
Supermarket push raises questions
Mr Rogut said it was with raised eyebrows that convenience retailers reacted to news reports that the major supermarket chains would continue a push into city locations with smaller format stores.
“The concerns the AACS has about this strategy are not borne of fear of new competition. Convenience stores know this market better than anyone. However where there is potential for smaller retailers to be disadvantaged competitively because of the immense buying power of the major chains, we will call on the ACCC to monitor the situation closely,” Mr Rogut said.
“It is critical that a level playing field is promoted and maintained should the supermarkets increase their competitive efforts in the traditional convenience space.
“For instance, the major chains are able to sell packaged alcohol from their premises while convenience stores, competing directly against the majors, cannot. Overt examples of anti-competitive policies such as this should be addressed without delay.”
New tax temptations and unnecessary regulations
The AACS continues to rally against an array of new taxes, either implemented, planned or merely proposed, to guard against the retail sector and small businesses in particular being unduly impacted by Government’s need to raise revenue.
Endless tobacco excise hikes are a case in point, Mr Rogut said.
“The relentless increases in tobacco excise not only represent unimaginative policy, it isolates small retailers as the sector which bears the main financial brunt. Too often the impacts of these type of ineffective taxes are felt most acutely at the small business level as the major chains, with their buying power, simply offset the extra costs,” Mr Rogut said.
“Similarly, measures like capping the number of outlets able to sell tobacco and charging retailers a license fee plays directly into the hands of criminals enjoying the profits of the flourishing market for illegal tobacco products.
“Then there are rumoured taxes on products like confectionery and soft drinks, and even on the containers that certain products come in, that get floated from time to time. The AACS will remain steadfast in our commitment to be a voice for small business in this regard.”
Australian convenience – international success
It was pleasing to see Australia’s entrants take out the two major honours this year at the international convenience industry awards for the third year running.
In front of an audience of leading international convenience industry professionals in the US, Callum MacKay of 7-Eleven won the Global Scholarship Award in the Retailer category and Kathryn Newiss from Philip Morris Australia won the Supplier category award.
Both Callum and Kathryn were winners of the AACS Peter Jowett Scholarship Award, earning the right to compete at the global awards.
“The scholarship program consistently unearths talented convenience professionals and it’s an important way for our industry to tap into the minds of young people. The program will continue in 2015,” Mr Rogut said.
Petrol theft – a crime that won’t go away until properly addressed
The latest figures show that petrol theft costs the convenience industry approximately $60 million per annum nationally. It’s a crime that has for too long been unaddressed to the point where it’s spiralling out of control.
“Urgent reform in this area is a must. A coordinated response from Police is needed, with the support of Governments at all levels who recognise the criminal nature of petrol theft. Otherwise small retailers will continue to suffer losses and, ultimately, motorists will pay in the form of higher fuel prices,” Mr Rogut said.
“Heavy fines and loss of license demerit points are potential coercions to petrol theft put forward by the AACS will remain focused in our endeavour to have this crime receive the attention it deserves.”
The Australasian Association of Convenience Stores (AACS) is the peak body for the convenience industry in Australia. In 2015 the AACS celebrates 25 years of representing the interests of these small businesses; their owners, staff, suppliers and customers.
Nationally the convenience industry employs over 40,000 people in over 6,000 stores. The majority of these stores operate as family run businesses, often under licence or franchise agreement. They regularly employ family members and people from the local communities in which they operate.