Petrol Stations Thrive as Fresh Food Sales Surge

More Australians are turning to local petrol stations and convenience stores for fresh food, snacks, and groceries, challenging the dominance of traditional supermarkets.

Despite a decline in tobacco sales due to the rise of illegal tobacco and vapes, sales of fresh and convenient food items are on the rise. Leading brands like 7-Eleven, Ampol, BP, and Coles Express have reported strong retail sales, with food and beverage purchases increasing by 12.6% over the past year. This growth comes despite significant economic pressures such as the cost-of-living crisis, according to a report by the Australian Association of Convenience Stores (AACS).

The AACS’s 2023 industry report revealed a 3.1% increase in total retail sales, reaching $10.408 billion, adding $313 million in sales. The number of retail outlets also grew by 1.5% to 7,357 stores.

This surge in sales is driven by a shift in consumer perception. More people now view petrol stations and convenience stores as viable options for purchasing food, meals, groceries, and snacks. In 2023, food and beverage sales dominated, totalling $6 billion, while non-food sales, including fuel and tobacco, reached $4.3 billion.

The trend began during the COVID-19 pandemic, as lockdowns and travel restrictions led consumers to bypass supermarkets in favour of local petrol stations for fresh produce, dinner options, and drinks. The quality of these products has significantly improved, contributing to the shift.

Petrol stations have moved beyond offering just meat pies, chips, chocolate, and soft drinks. They’ve heavily invested in store upgrades to feature fresh produce, healthy meal options, and higher-quality coffee. 

Theo Foukkare, CEO of AACS, stated that the convenience industry is evolving, with many stores transforming from traditional service stations into well-stocked suppliers of immediate and future food needs, great coffee, and popular snacks.

“Customers now see their local convenience store as a place to top up groceries and enjoy quality food and drinks in a comfortable, clean environment,” said Foukkare. He noted that food and beverage sales have delivered $676 million in additional revenue over 2023, with food service achieving double-digit growth for seven consecutive years, now contributing over $1.34 billion.

However, the report also highlighted a decline in non-food and beverage sales, which dropped by 7.7%, with tobacco sales down by 11.2%, representing a loss of $392 million.

Foukkare pointed out that the petrol station and convenience store industry now has a significant opportunity to compete with fast-food chains. In 2023, cafes, restaurants, and catering services at petrol stations grew by 10.3% after a 25.4% growth in 2022.

Many petrol stations are partnering with fast-food chains like Pie Face or Oporto, co-locating their stores on site. Foukkare cited Viva Energy’s acquisition of convenience store brand OTR, which is a master franchisee for Hungry Jack’s, Subway, Wokinabox, and Oporto, as an example of this trend.

“We will see more of these brands entering the convenience retail space, either run by our operators or leased out for them to operate,” he added.

The shift towards working from home is also driving more shoppers to petrol stations and corner stores. “The hybrid work model is now well entrenched in society, and businesses are adapting to maintain productivity, innovation, and business culture,” said Foukkare.

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