2 0 1 P R E S E N T E D B Y J E F F R O G U T 8 B R E T T B - - PowerPoint PPT Presentation

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P R E S E N T E D B Y

J E F F R O G U T B R E T T B A R C L A Y

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C A T E G O R Y P E R F O R M A N C E K E Y H E A D L I N E S I N D E P T H A N A L Y S I S

Sponsors Producing Report A C K N O W L E D G E M E N T S Providing Scan Data and Commentary AACS Retailer Members AACS Suppliers Members Providing Market Performance Providing Shopper Insights I N T R O D U C T I O N

METHODOLOGY

Overall Sales & Category Performance

• Category Margin
• Fuel Measures
• Transactional Data

A A C S R E TA I L E R M E M B E R S P R O V I D E P E R F O R M A N C E D ATA I N C LU D I N G

Industry Overview which includes non AACS members

• State Performance

R E TA I L E R S C A N D ATA P R O V I D E D BY I R I M A R K E T E D G E TO S U P P O R T

CMA Shopper Report 2018

• CMA Shopper Matters Community

2018

S H O P P E R D ATA P R O V I D E D BY C M A

A L L D ATA I S T H E N C O M P I L E D B Y C M A

KEY INDUSTRY ANNOUNCEMENTS IN 2018

Announce the sale of the fuel business to EG after BP pulled out of deal (finalised April 2019) Public Listing making it the second large fuel operation to list on the ASX Announce distribution alignment and Woolworths Rewards Programme

E X P L R E

Demerger from Wesfarmers creating a single identity on the ASX as part of Coles Group

KEY INDUSTRY HEADLINES Growth

+2.4%

+1% in 2017 Sales

$8.6bn

$8.4b in 2017 Margin

33.4%

33.5% in 2017

KEY GROWTH CATEGORIES

Take Home Food

+10.1%

$13m Tobacco

+6.4%

$204m On the Go Food

+9.9%

$53m Hot Beverage

+14.6%

$36m

INDUSTRY COMPARISON

C H A N N E L G R O W T H

+2.4%

P&C

+3.0%

Total Retail

+3.1%

Packaged Grocery Pharmacy

+3.2%

Liquor

+2.9%

2017: 6412 6644

P&C STORE NUMBERS Growth

+3.6%

2017 +2.1%

KEY FUEL HEADLINES Average Price

+11.3%

$1.42 Per Litre Cost of Fuel Theft

+4.4%

$169 Per Store Per Week Litre Per Transaction

• 2.6%

2017 +1%

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I N D E P T H A N A L Y S I S

PERFORMANCE DASHBOARD

+2.4%

2017 +1.0% Growth

+3.6%

2017 +2.1% Store Numbers Margin

33.4%

Down -0.1% Fuel Litres Per Transaction

• 2.6%

2017 -1.1% Average Transaction Value

$9.90

Flat

+1%

483 Per Day Merchandise Transactions Shopper Visits per Week

2.7

2017 2.6 Items Per Basket

2.1

2017 1.9

CATEGORY PERFORMANCE SALES GROWTH

$3.8b +3.0%

2017 $3.7b FOOD & BEVERAGE 2017 +2.5% FOOD

$4.8b

2017 $4.7b NON-FOOD

+1.9%

2017 -0.1% NON-FOOD

AN INDUSTRY WITHOUT TOBACCO

G R O W T H

+2.4%

2017 +1.0% Growth

$8.6b

2017 $8.4b Sales

$5.2b

2017 $5.2b Without Tobacco

FLAT

2017 +1.0% Without Tobacco Tobacco growth includes Government Regulated tax excise increase of 12.5% in September 2018

PERFORMANCE TREND

• 1

1 2 3 4 5 6 7 2015 2016 2017 2018

Industry Performance Food & Beverage Non Food

$4.8b

2017 $4.7b NON-FOOD

+1.9%

2017 -0.1% NON-FOOD

2018 VALUE ($000,000s)

TOBACCO GROCERY

• GEN. MERCHANDISE

CAR ACCESSORIES PRINTED MATERIALS COMMUNICATIONS TRAVEL TICKETS

CATEGORY 2017 VALUE ($000,000s) ACTUAL GROWTH YA ($000,000s) SHARE 2018 GROWTH 2017 GROWTH

3389 210 447 151 117 291 182 3185 210 464 159 132 335 212 204

• 17
• 8
• 15
• 44
• 30

39.4% 2.5% 5.2% 1.8% 1.4% 3.4% 2.1% 6.4% 0.0%

• 3.7%
• 5.1%
• 11.2%
• 13.0%
• 14.0%

3.4% 17.5% 19.6%

• 7.0%
• 10.2%
• 10.7%
• 13.5%

5 of the 7 Non-Food Categories are in decline while Grocery is flat versus 2018

$3.8b

2017 $3.7b FOOD

+3.0%

2017 +2.5% FOOD

6 of the 9 Food Categories are in growth which is up from 4 of 10 in 2017

HOT DISPENSED BEV. TAKE HOME FOOD ON THE GO FOOD PACKAGED BEV. SNACKFOODS CONFECTIONERY MILK BREAD ICE CREAM 256 144 591 1806 194 483 144 38 154 220 131 538 1785 194 483 146 40 162 36 13 53 21

• 2
• 2
• 8

3.0% 1.7% 6.9% 21.0% 2.3% 5.6% 1.7% 0.4% 1.8% 14.6% 10.1% 9.9% 1.2% 0.7% 0.1%

• 1.4%
• 3.9%
• 4.8%

16.1% 18.0% 13.3% 2.5% 2.1%

• 3.2%
• 4.6%
• 4.8%
• 2.4%

2018 VALUE ($000,000s) 2017 VALUE ($000,000s) ACTUAL GROWTH YA ($000,000s) SHARE 2018 GROWTH 2017 GROWTH CATEGORY

TOP 5 GENERATING AND DECLINING CATEGORIES

Tobacco On The Go Food Hot Dispensed Beverages Packaged Beverages Take Home Food Car Accessories Printed Materials General Merchandise Travel Tickets Telecom- munications

Growth

$204m $53m $36m $21m $13m $-8m $-15m $-17m $-30m $-44m

Decline

Sales Dollar Value

PERFORMANCE TREND – CATEGORY GAINERS

5 10 15 20 25 30 2015 2016 2017 2018

Packaged Beverages Tobacco On the Go Food Take Home Food Hot Dispensed Beverage

Dollar Sales % Growth

PERFORMANCE TREND – CATEGORY DRAINERS

• 15
• 10
• 5

5 10 15 20 25 2015 2016 2017 2018

General Merchandise Car Accessories Printed Materials Telcoms Travel Tickets

Dollar Sales % Decline

70% SHOPPER CATEGORY PENETRATION

E X P L R E

21% 2018 22% 18% 2018 19% 18% 2018 17% 17% 2018 18% 7% 2018 7% 2018 73%

• 12%

STORE STATS AND STATE GROWTH

V I C T O R I A remains the fastest growing state both by population and growth rate W E S T A U S T R A L I A WA indexation is the strongest at double population growth SA and Qld growth rate below population growth S O U T H A U S T R A L I A & Q U E E N S L A N D WA

+0.9 +1.8 +100%

SA

+0.8 +0.1

• 87.5%

NSW

+1.5 +2.4 +60%

VIC

+2.2 +3.8 +73%

TAS

+1.2 +2.1 +75%

QLD

+1.7 +1.5 Population P&C Index Key

• 12%

E X P E C TAT I O N S as stand-alone small formats expand e.g. Woolworths Metro S U P E R C O N V E N I E N C E O F D E L I V E R Y Shoppers wanting it now F O O D O N T H E G O Competitive threats and expanding offers G O V E R N M E N T R E G U L AT I O N Tobacco, Liquor, and Sugar P R O M O T I O N A L E F F E C T I V E N E S S Struggling Categories, Day Part Promotions

ONGOING THREATS TO CONVENIENCE

The change comes as the retail giant addresses potential barriers at its cashless convenience stores.

April 12, 2019 SEATTLE –Amazon will add other payment mechanisms, including the ability to accept cash, to its Go locations, CNBC reports. In March, Steve Kessel, senior vice president of physical stores for Amazon, informed workers that the addition of alternative payment methods, including cash, is a move to address “discrimination and elitism” at Go stores. Kessel pointed to the additional payment options Amazon has put in place online, such as a test program that lets users pay with SNAP benefits and Amazon Cash, which allows users to upload money to their digital accounts at local stores like 7-Eleven. “We’re in earlier days, but it’s an important focus for us and we’ll continue to extend those methods with our stores,” Kessel said. Amazon hasn’t revealed a timeline for implementing those changes. An Amazon spokesperson said customers will “check out, pay with cash, and then get your change. … We are working to accept cash at Amazon Go.” The move comes as more states and cities mandate retail outlets must accept cash as payment. This year, New Jersey and Philadelphia prohibited cashless stores. Massachusetts has had a law

• n the books for years that requires retailers to allow customers to pay with cash. A New York City councilman introduced a similar bill

last year, while San Francisco also is considering a cashless ban.

Amazon Go to Accept Cash

From (today)

Fuel provider Commodity-driven business Limited interaction with customers (less than 4 minutes) Offers and promotions are one-size-fits-all Limited assortment (coffee, tobacco,

• ther channel staples)

Traditional buying channels

To (tomorrow)

Energy provider Service-driven business Best-in-class customer experience to create a destination that delivers convenience in products, food and services Tailored and personalized experiences and services Hyperlocal or differentiated assortment Omnichannel, frictionless options S O I 2 0 1 9 : H a l f O f T h e I n d u s t r y I s ‘A 1 0 - y e a r - o l d B u s i n e s s M o d e l ’ E v o l v e n o w o r g o t h e w a y o f B l o c k b u s t e r : c - s t o r e l e a d e r U S S TAT E O F I N D U S T R Y S U M M I T I N S I G H T S

CHARLIE MCILVAINE

C h a i r m a n & C E O o f C o e n O i l

FUEL

AV E R A G E P R I C E 2017 +10.1%

+11.3%

F U E L O N LY S H O P P E R S 2017 48%

54%

F U E L T H E F T 58.5m

+4.4%

L I T R E S P E R T R A N S A C T I O N 2017 -1.1%

• 2.6%

F U E L M I S S I O N 2017 25%

23%

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M E R C H A N D I S E G R O W T H C A T E G O R I E S

2017 $220m S A L E S

$256m

2017 +16.1% G R O W T H

+14.6%

+$36m in Sales and +$26m in GP Growth rate slowing at category matures Visit frequency @3.5times per week Average Retailer Margin 54.8% Spend per basket 37% below Channel average Quality is the main driver

HOT DISPENSED BEVERAGES

2017 $131m S A L E S

$144m

2017 +18.0% G R O W T H +$33m of value in the last 2 years Average items purchased is 3.7 per visit Margin dollar growth flat 47% of Shopper purchase as a meal for now Higher female participation in the category Above Average Spend of $15.90 per basket

TAKE HOME FOOD

+10.1%

2017 $538m S A L E S

$591m

2017 +13.3% G R O W T H

+9.9%

+$53m of growth in 2018 after +$63m in 2017 Still male dominated at 70% of Shoppers Margin percentage increased from 38.7% to 49.8% Visit frequency 8% below the average Sandwiches and Wraps +17% Average Spend

• f $11.00 per

basket

ON THE GO FOOD

2017 $3.2b S A L E S 2017 +3.4% G R O W T H Delivered growth

• f $204m in

sales Spend per basket of $32.10 Unit growth of 2.2% versus decline in 2017 of 2.9% as smokers switch to smaller packs Margin percentage decline of 1.9% to 20.6% Tobacco represents 39.4% of Sales Value

TOBACCO

$3.4b +6.4%

2017 $1.79b S A L E S 2017 +2.5% G R O W T H

PACKAGED BEVERAGES

Dedicated Iced Coffee -2.4% and Water -1.4% Growth coming from Kombucha +37% off a low base Margin improvement of +$20m Energy Drinks +5.5% up from 0.8% in 2017 Visit Frequency is 15% below the channel average Major Beverage announce a commitment to reduce sugar by 20% by 2025

$1.81b +1.2%

2017 $194m S A L E S 2017 +2.1% G R O W T H Chips represents 64% of category +0.5% The main mission is a Drink Mission @ 30% Notable increase in health with Nutritional Bars up 17% Dollar Margin decline of $4m Visit frequency twice a week - 26% below average

SNACK FOODS

$194m +0.7%

2017 $483m S A L E S 2017 -3.2% G R O W T H Chocolate Confectionery +1.6% Main Mission is Fuel mission @35% Remains the most impulsive category and is highly influenced by Promotions Visit frequency is 22% below channel average Category Margin value

• $11m

CONFECTIONERY

$483m +0.1%

edible Grocery category was up 3%

2017 $210m 2017 +17.5%

GROCERY

The Main mission is Top Up @ 41% $11m margin decline driven by lower average margin Males represent 53% of Grocery Shoppers

$210m Flat

S A L E S G R O W T H The traditional edible Grocery category was up 3%

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M E R C H A N D I S E D E C L I N I N G C A T E G O R I E S

2017 $146m S A L E S

$144m

2017 -4.6% G R O W T H

• 1.4%

Full Cream Milk +1.2% Reduced Fat Milk

• 9.0%

Margin -4.1% resulting in a $7m drop in value 53% Female shoppers 15 points above average

MILK

2017 $40m S A L E S 2017 -4.8% G R O W T H Margin -5% resulting in $2m decline in value

BREAD

• 3.9%

$38m

Visit frequency dropped to 2.3 times per week

2017 $162m S A L E S

$154m

2017 -2.4% G R O W T H

ICE CREAM

Main mission is fuel mission @35% Visit Frequency is 41% below average Highest Female participation of any category at 55% Category margin

• 10% resulting

in an $8m margin decline

• 4.8%

2017 $335m S A L E S

$291m

2017 -10.7% G R O W T H

• 13.0%

COMMUNICATIONS

2018 Highest percentage decline of last 4 years Margin -$9m represented 20% of margin Recharge Cards main reason for decline dropping 17.5% Spend is double the average at just under $20 per basket

$447m

GENERAL MERCHANDISE

2017 $464m Sales

• 3.7%

2017 +19.6% Growth

$151m

CAR ACCESSORIES

2017 $159m Sales

• 5.0%

2017 - 7.0% Growth

$117m

PRINTED MATERIAL

2017 $132m Sales

• 11.2%

2017 -10.2% Growth

AACS AWARDS

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Retailer average score improved by 4 points with each Performance area improving Supplier average score declined by 5 points with each Performance area declining Category Management remains the lowest Performance Area across both the Retailer and Supplier Report

AWA R D W I N N E R

Retailer of the year BP Supplier of the year PepsiCo Tobacco Philip Morris Food on the Go Patties Grocery & GM Pacific Optics Beverages Frucor Suntory Snacking PepsiCo Confectionery Stuart Alexander Telecommunications Vodafone Distributors The Distributors

E Commerce and the engagement with the next generation Delivery/Ordering Trends Super Convenience Health coping with increased demand Modern Consumers want Convenience that delights Shopper are looking for an experience Female Engagement how do we build participation in the channel Government Regulation Perception of needing to do something Electric & Autonomous Vehicles issues with declining fuel mission

TRENDS AND OPPORTUNITIES

Improvement in the amount of Categories in growth driven by Food categories Food and Hot Beverages continue to drive strong growth although percentage growth is softening as they mature Heavy reliance on Tobacco value in terms of generating growth with Channel in Negative growth excluding the category Non Food negative categories continue multi year trend in terms of performance

SUMMARY

S E LEC TION O F EV ENTS 2 0 1 9

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T H A N K Y O U