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THE CATCH OF THE DAY BEGINS HERE!
Who is winning
the convenient shopping battle?
By Brett Barclay
Did you know that only 14% of shoppers
who visit a convenience store do so
because it is convenient? This is well
below the numbers that we see coming
out of the UK and the USA with both just
being below 50%.
We have seen more and more Petrol
and Convenience retailers trying to
differentiate their offer. However outside
of 7-Eleven, the association with fuel is
as strong as it was four years ago when
we first started measuring shopper
missions. So what is convenience and
how is it measured?
Firstly, convenience is all about being
able to get what you want, when you
want it and as easily as you can possibly
get it. Secondly, measuring its success is
a more difficult task. However, to satisfy
all of the above is a good starting point.
If you, like me, shop many different
formats looking for everyday needs, you
would have to say that supermarkets are
still going the closest to meeting those
needs. Channel blurring is a strong buzz
word and more and more retailers are
looking for ways to compete. This is no
more evident than Woolworths taking
Wesfarmers (Coles) on in large format
hardware. Daring, yet not unexpected!
So who is meeting the needs for
The him! Sector Track program
identifies which format shoppers are
visiting most frequently. It is probably no
surprise that large format supermarkets
are continuing to increase weekly visit
frequency, with an increase from 63%
of the population in 2006 to 67% this
year. They continue to do a better job of
meeting small top up basket needs.
The offer on daily essential items Milk,
Bread and Fresh Food has got better and
it is now more conveniently located in
store. In saying this though, you would
still take more than double the time
than you would in a convenience store -
yet people are prepared to do that.
Why? Is it value, trust, what you know,
offer or availability? Or is it an element
of all of these? No matter what we do,
until we build trust in the offer we will
never win the battle of the shopper.
It is worth noting that a major player,
Foodworks, is really starting to set the
benchmark for convenience retailing.
Foodworks is opening many different
formats (or acquiring stores through
the Coles deal) including the CBD in
Melbourne and preparing to take on
both the supermarket and convenience
This type of offer has been hugely
successful in the UK through M&S, Tesco
and Sainsbury. Now Tesco (Fresh and
Easy) and Walmart (Neighborhood) are
taking on a small convenience format in
the US. The offer of top up items at value
for money, store front parking or easy
access via foot, quality fresh food and
impulsive lines at the front of store are
appealing to the time poor shopper.
The prize is a big one for the future,
with more and more shoppers looking
to be able to spend less time shopping
for day to day needs and especially now
with over 30% of supermarket baskets
containing five items or less. We see
that while Convenience stores battle it
out to win this type of shopper, currently
the association with fuel is a barrier,
especially with the significant shift in
fuel prices and the driving of the fuel
offer through various forms of dockets.
We know with the power of the
big supermarket players and their
involvement in fuel outlets right now, a
number of supplier companies continue
to look for opportunities. However these
opportunities already exist and have
simply been overlooked.
Recently when we were looking at
launching the him! route program, I was
staggered to see that the Newsagents
channel was worth an estimated $6
billion and had over 4,000 outlets. It has
the second highest weekly visit frequency
with 34% of the population visiting
on a weekly basis. This has dropped,
however, from 45% in 2000. Nearly 80%
of their sales come from 3 categories:
Newspapers, Magazines and Lottery.
It is fair to say that this channel is
fragmented, with buying groups having
token relationships with suppliers
outside these categories at best. Why is
As we continue to look for the next
emerging category to come through,
we need to look at the future trends of
shoppers. There is no doubt that no one
is meeting all the needs of the consumer,
yet large supermarkets are at least able to
offer the majority of needs.To compete,
all retailers need to understand that the
consumer is very aware - through media
and word of mouth - of what is good and
Some difficult decisions need to
be made on where retailers stand and
where to extend the offer past traditional
strengths, and this is happening as we
Brett Barclay is CEO of him! Shopper
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