Grocer’s struggle so Entering the C-Store Sector is the Rage

Grocerant niche Ready-2-Eat and Heat-N-Eat fresh food continues to be the fuel that is driving consumers into new avenues of distribution, new meal choices, a new fast fresh food service options according to Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.

The undercurrents of consumer shopping behavior have driven Australia’s two largest grocery store groups Coles and Woolworths to move into the convenience sector, taking on smaller corner stores in capital cities around the country.

According to local media reports, “the trigger has been the increase in city-based population and the conversion of office blocks to apartments where space is not available for traditional supermarkets.

In Sydney, for example, it has been reported that Woolworths is trying to find sites of 200-400 square metres. This format would see the smaller format stores in direct competition with convenience businesses 7-Eleven and City Convenience. Woolworths confirmed to Fairfax Media that it had a small number of smaller format supermarkets.

The initial branding for Woolworths’ corner store push is “Woolworths Small Format” and it will start in Sydney and Melbourne. The stores will offer a limited range of products, and will be feeder stores to the medium-line Woolies Metro stores, such as the one in Melbourne’s Southern Cross Station.

It has been reported that Coles is also looking at a business model that would allow it to offer smaller format supermarkets.

Australia’s largest convenience store operator 7-Eleven recently announced the opening of its 600th store at Gumdale in Queensland, continuing what it said was “strong, sustainable growth”.

7-Eleven CEO Warren Wilmot said “this milestone for 7-Eleven comes at an exciting time, only weeks before the Company’s first store opens in Western Australia, our first new market entry in more than 30 years.” The first Western Australia store at 100 High Street in Fremantle is scheduled to open its doors on 30 October 2014.

7-Eleven is the largest convenience retailer in Australia. The company is privately owned by the Withers and Barlow families.  The move by Coles and Woolworths into the convenience sector comes amid increasing concerns about the market power of the two major supermarket groups. However, Australian Competition and Consumer Commission (ACCC) chairman Rod Sims told Fairfax Media the regulator did not and should not have the power to push the supermarkets to divest assets.

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