Small Australian retail food formats, including C-stores and small format supermarkets have struggled to reach the performance of similar formats in other developed retail food markets.
This is despite substantial investments by food retailers into this format size, including embracing petrol offers and expanding some food categories in those networks. Let’s Eat, Foodchain and Macro Foods are some of the more visible attempts in the Australian market in recent years.
In recent weeks more changes are signalled, with Caltex and BP circling to acquire the Woolworth’s fuel site network and speculation that the four remaining Thomas Dux stores will migrate to Woolworth’s Metro in early 2017.
Yet this performance is in contrast to what has been achieved in the UK and also neighbouring Asian capitals. In the UK, the advanced food and ready meals offers has driven performance and in Asian capitals the small format food stores are now the high growth retail food channel.
Why the gap? Is it driven by; population density, an expansive housing footprint, fuel centred site branding or just shortfalls in the offer. We suggest all those factors contribute but the content and quality of the food offer is at the core.
A key question is whether this latent food distribution capacity that exists in so many C-store type formats is now under increased pressure from the breadth of new food channels.
If the disrupter mode is to find and align lazy assets, is there potential for the new emerging food offers to align with the distribution potential of these existing smaller stores?