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Convenience sales climb 2.1 per cent to $8.8bn

PASADENA CA/USA – OCTOBER 25 2014: 7-Eleven store exterior and sign. 7-Eleven is the world’s largest operator and franchisor of convenience stores with more than 50000 outlets.

The Australian convenience industry saw sales lift by 2.1 per cent to $8.8 billion last year, driven by a strong performance in Food and Beverages.

The AACS State of the Industry Report, released online this week, showed that despite the challenges in retail trade conditions in 2019, convenience proved of value to consumers.

Food sales rose nearly 6 per cent to $4.038 billion last year, while Non-Food categories fell more than 1 per cent on 2018 figures, partly due to poor growth in the Tobacco category.

On average more than 70 per cent of convenience shopping baskets included a beverage, the report found. Packaged Beverages grew 4.4 per cent over the year to deliver the greatest dollar value contribution of any convenience category of $79 million.

“Convenience customers are increasingly including a beverage among their purchases, in many instances combined with a Food on the Go purchase, with the trend to healthier alternatives continuing to play out and new market entrants in 2019 having a positive impact on the category,” AACS CEO Jeff Rogut said.

Energy drinks, soft drinks and flavoured milk led the way in terms of dollar share in this category, while Tea Drinks and Protein drinks delivered the best performance in terms of dollar growth.

Hot Dispensed Beverages was the fastest growing category in convenience for the third year running, growing 18 per cent and taking the category value to in excess of $300 million.

The Food on the Go category was the second fastest growing category in convenience in 2019, accounting for 38 per cent of total channel growth and total sales of $659 million for the year.

In the Take Home Food category, growth slowed to 3.5 per cent. AACS said this is a sign the category is maturing with the consumer “having now accepted that meals on offer from convenience stores represent value for money”.

Across other food categories, Confectionery was up 2.1 per cent, Snack foods rose 4.1 per cent and Ice Cream grew 5.6 per cent

Rogut said the industry’s value proposition has never been clearer than it is right now.

“Government has deemed our industry an essential service and we take our responsibility to provide the items people need in these distressing times very seriously, ” Rogut said.

“The strong 2019 result, and the way we are still serving our customers today in bright, modern, clean and safe stores, is a testament to the many great operators and staff who make our industry tick.”

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