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INDUSTRY UPDATES: AACS 2023
AACS International Study Tour heads to Europe
The AACS 2023 International Study Tour saw retailers and supplier members travel to Europe to seek out the latest trends and insights from some of the continent’s leading markets.
-Words Theo Foukkare
THE AUSTRALIAN ASSOCIATION of Convenience Stores (AACS) held its 2023 International Study Tour from 28th May through to 6th June this year.
The tour, which was hosted by Theo Foukkare, CEO of AACS, and supported by 37 Australian retailer and supplier members, visited Dublin (Ireland), Oslo (Norway), and London (United Kingdom), in search of the latest trends and insights from leading markets in Europe.
The AACS International Study Tour is a carefully curated event designed to showcase the latest in store design, retail formats, food concepts, technology, and loyalty. AACS was fortunate to be hosted by leading retailers with key senior executives from various companies, meeting us onsite to share insights into their offer and answer any questions to assist in providing context.
The tour kicked off in Dublin, Ireland, a market known globally for its excellence in foodservice and small-box retail offers supported by operational excellence in supply chain. The group was hosted by Thomas Ennis, a leading SPAR retailer, who has developed arguably one of the leading foodservice offers in convenience retail.
Ennis shared his journey from a single store to becoming a leading multi-site operator in Dublin. Some of Ennis’ key messages were to listen to your customer, talk to them and understand their needs, then ensure you can deliver it consistently every day. Ennis isn’t afraid to try new concepts or ideas with his motto of ‘fail fast and move on’, which means to try new ideas as quickly as you have them, and if they succeed, tailor it to each store based on the local community.
In Dublin, the group visited a combination of motorway service centres, local suburban small format grocery stores, convenience, and grocery stores – a total of 17 different store formats over two days, including Circle K, Applegreen, Shell, Maxol, Avoca, and Donnybrook Fair to name a few.
Key learnings which were evident across the market is that foodservice is at the heart of the retail offer, delivered through either delicatessen-style food, made fresh on site daily, or with a leading quick service restaurant brand incorporated into their offer.
The AACS International Study Tour is a carefully curated event designed to showcase the latest in store design, retail formats, food concepts, technology, and loyalty.
Store aesthetics and design of store format in Dublin is focused on creating a warm ambience in materials and beautiful aroma of food, where the offer is easily navigated depending on the customers’ needs. Given that Dublin isn’t a huge city, a daily fresh supply chain allows the retailers to easily offer café style meals for breakfast, lunch, and dinner.
The group then joined the NACS Convenience Summit Europe for two days of insights and thought leadership, along with 200 other leaders from across Europe. Henry Armour, NACS CEO and President, shared the strategic challenges facing the industry across Europe and the globe, reinforcing that convenience retail around the world is faced with similar strategic issues, however different markets were at various stages of the life cycle.
Presentations across the two days were heard from Florian Naegele at McKinsey on How to Play the EV Game, Regan Leggett at Nielsen (NIQ) on The Changing Consumer and Their Needs, The Future of Work by Oliver Wyman, Paul Martin from KPMG spoke about Inflations Strategies and Tactics, The Future of Payments and The Future of Nicotine.
Retailer case studies were also showcased by Jose Barreiro, CEO of Repsol, who spoke about multienergy transition, digitalisation, and customer centricity. Carlos Arenas, CEO of OXXO, offered a truly inspiring case study.
Arenas’ key messages were to build an organisation powered by culture but built by engineers. With their mission in simplifying life to create human and economic value, creating a store factory which has seen OXXO open one and a half stores a day for 45 years, including three per day for the last 15 years. Arenas spoke of adding layers to the value proposition, building his culture based on values, attitudes, and trust, and to then build capabilities.
Overall, a successful two days of insights from Europe with excellent networking and information to take back home to their businesses.
The group moved onto Oslo, Norway, the most developed electric vehicle market in the world, to get a first-hand look at how convenience retailers are adapting their forecourt and store offers to remain relevant, profitable, and at the leading edge of the transition to cleaner energy for mobility.
The group was expecting to see EV cars everywhere. However, the biggest surprise was that after 12 years of adoption, only two out of every 10 cars on the road were an electric vehicle. In terms of new car sales, eight out of 10 cars being purchased are electric, where the adoption has been accelerated by enormous government investment in rebate incentives, free parking, reduced registration fees, fuel efficiency standards, and a government mandate to have all new cars electric by 2025.
There is no doubt that the transition to EVs is very advanced, however the key learning was that the transition of the entire carpark (all passengers vehicles in Norway) still has a long time to take effect.
Almost every forecourt now has electric charging available, however traditional fuels still dominate in terms of numbers of fuelling/ charging. In Norway, approximately 75 per cent of all charging is completed at home or at work, with the remaining 25 per cent undertaken on the go – which is where traditional fuel retailers and other retail offers are fighting for the EV charger to frequent their stores.
Pret A Manger was one of the standout offers, with great in store execution of their food offer, great coffee options and speed of service.
The on-the-go charging market is now focused solely on fast or rapid DC charging, ranging from 150kw to 350kw charging equipment, which can deliver 80 per cent charge in approximately 20 minutes.
Another interesting fact is that the price of electricity traditionally has not been advertised like fuel has been, it is only available to compare online or within an app. Uno-X, owned by the Reitan Group and master franchisee for 7-Eleven, were the first, and only very recently, to advertise the price of electricity on the main price board. It will be interesting to see if the market follows this move.
The group visited 16 stores across brands including 7-Eleven, Deli De Luca, Shell, Circle K, Uno-X, Narvesan, Reima, and COOP – a broad cross section of convenience, grocery, and small format convenience.
The focus of all retailers in Norway has quickly moved to providing seating, great food offers, Wi-Fi, and a place to be comfortable while they now have to spend approximately 20 minutes on site. The integration of food into store formats is now front and centre for all retailers, where in most cases foodservice contribution to shop sales is at 50 per cent on average and growing. Convenience retailers have integrated the food offering into their format, so it is a blend of a quick service restaurant and convenience store, but the priority is food, supported by traditional essentials.
The group then moved onto London, visiting 20 stores across leading brands including Shell, Amazon Fresh, Waitrose, Pret a Manger, M&S Food, Sainsbury, and Tesco. Convenience and grocery retailing was very well developed many years ago, but it was great to see some of the latest offers, new technologies, and to see how EV charging is progressing in the UK. Whilst the standard of stores was very good, the group felt that there were more learnings in Dublin and Norway than in London.
Pret A Manger was one of the standout offers, with great in store execution of their food offer, great coffee options and speed of service. We visited the Shell Fulham store; the first EV only offer by Shell globally. Well executed and with a nice retail offer, but clearly a store developed by Shell to test and learn from as they continue to rollout their charging network globally.
Another highlight was the visit to Gridserve at Braintree, a store with over 50 charging points at various charging speeds, on-site battery storage to feed the operation and sell back to the grid, test drive options for the Polestar brand, lease options for EV drivers to purchase various models, micro-meeting pods that can be hired on a short term or full day basis, combined with a convenience offer including food, coffee, alcohol, pharmacy, and a WH Smith offer.
The Gridserve store is currently being used 130 times per day for charging, but interestingly it is being visited by over 500 shop-only customers per day. The group also visited the latest version of Amazon Fresh at Monument, running with their Just Walk Out payment technology. The latest version of Just Walk Out includes all the learnings from previous executions, now with a wide store access point, ability to tap your card to enter vs needing to be an Amazon Prime member. It worked really well, even with fresh food, bakery, and alcohol, as well as traditional goods.
To close out the study tour, Red Bull hosted the retailers in Salzburg Austria at their Global Head Office. The group heard from Red Bull global leaders in a workshop on the future of energy drinks, best practice execution, and consumer insights into the broader beverage category. The visit to the home of Red Bull was truly inspiring to see where it all started from, including the original office building that stands on the property, and is still used today.
AACS wants to thank all retail and supplier members that participated in the very successful 2023 International Study Tour, along with all retailers that supported the group with their time, hospitality, and knowledge transfer across the 10 days of the study tour.
Expressions of interest for the AACS 2024 study tour to Barcelona and Switzerland will open in September.
