Convenience Stores in Australia

2020 IMPACT

7-Eleven works with its franchisees to manage through the COVID-19 crisis

Due to the widespread impact of COVID-19, 7-Eleven was granted approval by the Australian Competition and Consumer Commission (ACCC) to work with its franchisees to reduce the number of trading hours or in some cases close stores in response to the lower demand resulting from the pandemic. As 7-Eleven operates stores in areas where it sometimes compete with its franchisees any such discussions would normally be subject to the country’s competition laws.

Convenience stores faces competition from new areas as businesses adapt to the lockdown

Following the outbreak of COVID-19, shoppers used convenience stores more often as they looked to adapt to the lockdown. Looking to avoid straying too far from home, consumers were actively looking for the most easily accessible and least crowded alternatives to supermarkets to purchase their essential items.

Tobacco sales remain steady

Despite the downward trend being seen within the tobacco industry, sales through convenience stores remained steady during 2020. Sources indicate that loyalty to convenience stores as the main channel for tobacco purchases remains strong with almost half of shoppers buying their cigarettes and tobacco products from these outlets.

RECOVERY AND OPPORTUNITIES

BP and David Jones form successful partnership to offer healthy and convenient meal options

BP and David Jones have formed a partnership to open convenience stores in Australia offering gourmet-style food alongside other grocery items to busy, urban consumers. Following the success of its 10 trial stores located in Victoria and New South Wales, the partnership continues to expand with it having planned to open 21 new stores in Sydney and Melbourne by the end of 2020.

Technology set to fuel the development of convenience stores over the forecast period

Convenience stores operators will likely continue to invest in new technologies to help deliver safer, more efficient and better value services. From improved coffee machines to keep up with increased demand for hot beverages to delivery drones and mobile ordering, these are just some examples of areas that could receive investment.

Smaller format supermarkets treading on the toes of convenience stores

Smaller format supermarkets could pose a threat to existing convenience stores over the forecast period. In particular, Woolworths Metro and Coles Local are increasingly found in busy inner city locations and densely populated suburban areas.