Convenience Stores in Australia

PROSPECTS

Convenience stores face growing threat from smaller supermarkets formats

Convenience stores in Australia are facing growing competition from smaller-sized supermarkets. Best exemplified by the Woolworths Metro and Coles Local formats, these smaller outlets are increasingly found in busy inner city locations and densely populated suburban areas.

Wages and franchising scandals continue to plague 7-Eleven

7-Eleven, Australia’s second biggest convenience stores chain, has been plagued by scandal in recent years. During the review period, several 7-Eleven franchisees were fined for underpaying staff following investigations by the Fair Work Ombudsman (FWO).

Innovation set to become more important as competition intensifies

As competitive pressures intensify, over the forecast period it will become even more important for convenience stores operators to try to differentiate their offers via innovation. For example, operators could benefit from the launch of new smartphone apps that improve customer experiences and provide exclusive access to special deals, loyalty rewards etc.

COMPETITIVE LANDSCAPE

7-Eleven acquires majority stake in alcohol delivery service Tipple

In August 2018, 7-Eleven announced its acquisition of a majority stake in Tipple, one of Australia’s fastest-growing on-demand alcohol delivery start-ups. The acquisition gives the convenience stores chain access to the proprietary “last mile” technology that has allowed Tipple to partner with local off-licences to make deliveries within 30 minutes in over 120 suburbs of Melbourne and Sydney.

Potential for investment in digital technologies to improve customer experiences

As consumer lifestyles become increasingly hectic, investment in technologies that facilitate simpler and faster shopping experiences or provide added-value services could help convenience stores operators to strengthen their competitiveness. Examples include in-store mobile checkouts, parcel collection facilities and apps that enable customers to pre-order ready-to-eat food, coffee and other items.

Flexibility may give IGA X-press outlets advantage against smaller supermarkets

IGA X-press, which remained Australia’s leading convenience stores chain in 2018, is arguably the player most exposed to the growing threat from smaller supermarkets. While Metcash owns the IGA brand, individual IGA X-press outlets are independently owned and operated.

Files are delivered directly into your account within a few minutes of purchase.