Corner stores struggle against servo convenience stores
Corner stores in Australia are continuing to disappear as service stations move towards having convenience stores within the station, according to research from Australian industry research group BIS Shrapnel.
Service stations with convenience stores – defined as those with more than a very simple food and beverage offering – increased almost 10 per cent from an estimated 3,162 outlets in 2010 to an estimated 3,450 outlets in 2012. Service stations without a convenience store declined from an estimated 3,471 stores in 2010 to 3,168 outlets in 2012, suggesting that most service stations are moving towards offering more food and beverage options.
While the number of independent service stations that depend on petrol and a limited food offering is on the decline, the major supermarket retailers continue to increase their presence in the sector. Woolworths/Caltex has grown from 611 stores in the route trade market in 2010 to 848 stores in 2012, accounting for nearly the entire increase in service stations with a convenience store.
Despite the significant increased in the total number of stores, the market for service stations with a convenience store, is not immune to the generally poor economic sentiment among consumers.
“Since 2010 we’ve seen an increased movement in successful promotional strategies from multi-buys to ‘buy one get one free’ in service stations with a convenience store,” said Rosengren. “This is another indicator of tougher economic times, and this is the case in many other route trade channels,” he said.
The demise of the corner store
The number of independent convenience stores continues to decline, following a persistent downward trend. In 2010, there were an estimated 4,131 outlets, but in 2012 the number of stores dropped to an estimated 2,725, a decline of 1,406 stores. The total market size of the corner store channel fell from $754 million in 2010 to $613 million in 2012.
The average turnover per store also shrank from $985,000 to $750,000. Independent convenience stores now make up just 12 per cent of the total route trade market. In 2007, that number was 20 per cent.
“We continue to see the decline in the number of independent convenience stores – the demise of the corner store is a fact,” said Rosengren. “We fully expect this decline to continue, due mainly to the rise in the number of supermarkets and convenience stores attached to service stations,” he said.
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