Convenience-store sales slump in states worst hit by Covid-19 - Inside FMCG

Convenience-store sales slump in states worst hit by Covid-19

Ice-cream sales soared at Australian convenience stores in the June quarter.

Convenience-stores in states least affected by the Covid-19 pandemic posted strong sales growth in the first half of this year – but those in NSW and Victoria suffered from lockdowns and social-distancing measures.

According to the AACS State of the Industry Half Yearly Report 2020, prepared by Convenience Measures Australia, convenience-store sales across the nation rose by a meagre 0.8 per cent in the six months to June 30, with 2-per-cent growth in the June quarter. 

Sales in Victoria slumped 3.7 per cent and in NSW by 1 per cent. 

However sales in Western Australia soared 9.3 per cent, in South Australia by 3.4 per cent and in Queensland by 3.3 per cent. 

“The first half result for the convenience channel, particularly given the circumstances, is very strong and a testament to the quality of service, safe store environment and consistent hard work of the operators and employees in our industry,” said AACS CEO Jeff Rogut.

“Growth has been maintained in many categories and even though people are staying home more, meaning fuel-destination visits are down, those categories which have been the subject of innovation and which are the future of our industry, including fresh food and coffee, are well-placed to rebound once a sense of normalcy returns.”

Rogut said it was obvious that challenges remain in the market as the pandemic continues. 

“But those who work in the industry can be confident that the value proposition the convenience channel provides to consumers is clear. “If anything, the important role we play in local communities across Australia has been reinforced in these unprecedented times.”

Ice cream provides Covid-19 comfort 

Meanwhile, the report revealed varying performances in core convenience-store categories during the half year. 

It appears Australians sought out ice cream as a ‘comfort food’ in the pandemic’s wake. The ice-cream category grew by 8.2 per cent in the June quarter, making it the strongest performer among impulse-snacking products. Ice-cream sales in convenience stores grew by 5.2 per cent last year and were up 3.6 per cent on a moving annual turnover (MAT) basis at the end of the first half. 

Food on the go was the second highest category in dollar sales and percentage growth last year, but declined over the June quarter by 4.4 per cent. However sales of take-home food were up 7.8 per cent.

Packaged beverages growth was subdued at 1 per cent, with energy drinks and carbonated beverages standouts, MAT of 3.8 per cent and 3.2 per cent respectively.

The pandemic eroded demand for hot dispensed beverages: the fastest-growing convenience store category last year at 18 per cent, sales growth slowed to 5.9 per cent MAT to June.

In the confectionery aisle, sales were down 10.6 per cent in the June quarter, producing a 0.9-per-cent MAT decline. Sales of gum & medicated products fell 29.8 per cent over the last quarter, but chocolate blocks improved by 5.8 per cent.

Snackfood sales were static at 0.1 per cent on an MAT basis.

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