Despite COVID-19 dominating the petrol channel negatively for most of 2020, with lockdowns restricting movement and travel, there was overall dollar growth of 1.5%1. This was a slow-down of the +7.5% growth experienced in the previous year1.
Quarter growth is performing at 1.6% compared to 7.2% in the previous year, however the latest four-week period has seen growth improve to 2.8%, while still comparably down on growth over the same period in the previous year (5.1%), it’s positive to see things moving in the right direction1.
Kiwis spend more at Christmas in the petrol channel
Macro factors rounded out 2020 on a positive note. Overall retail electronic card spending was up 5% over the Christmas period compared to the previous year. And the Department of Statistics annual retail spend showed 1.5% growth for the year ending September 2020 compared to a year ago2.
Over the Christmas period, Kiwis spent $122 million in the petrol channel, up 2.8% in value sales compared to the previous year2.
The channel growth was primarily driven by non-edibles, which contributed 64.2% to overall channel dollar growth. Non-edibles unit sales we down 5% driven by product mix and price per unit changes. But categories such as beverages, ice cream and medicinal all picked up share during Christmas over the MAT2.
There were a number of categories that saw accelerated dollar growth during the Christmas period compared to 2019, including beverages, ice cream, snack foods, and bread. The holiday period also saw an increase in sales of gift cards which grew by 51.7%2 compared to the year prior.
Retailer initiatives
The petrol channel has pivoted to a technology-forward strategy to amplify its ‘speed and convenience’ with things like contactless fuel pay. But the question is, has contact-free purchasing come at a cost to the channel’s in-store sales with a trip to the service station becoming just about fuel?
To combat this, petrol retailers have continued to evolve their in-store offerings, with innovation and convenience at the heart.
In November, BP launched its first fast & fresh modular store format (which you can read all about on page 46). The concept focuses on convenience and evolving the service station experience. It creates a modern food market feel and features many much-loved New Zealand food brands that can be picked up in-store or ordered via Uber Eats.
Edible-based categories have become more important to the petrol channel gaining 0.1pts and in fact over-index in their contribution to the channel’s overall dollar growth at 42.7%1. Categories such as beverages, ice Cream and snacking have all gained share of edible sales.
On-the-go food increased its value share to 20.2% in the quarter to January1 however that share has softened compared to the same period last year (22.3%).
Take home beverages have seen growth accelerate this year (9.2% value growth compared to 7.4% last year1), but also within RTD drinks we saw energy drinks volume growth outperform unit growth indicating growth of larger pack sizes.
There has been a great deal of innovation, premiumisation and larger pack sizes within the snacking category (see New Products of 2020). We’ve seen NPD drive overall category growth and ice cream has also seen growth off the back of NPD and larger take home pack sizes.
In some cases, the petrol channel became a go-to through the COVID-19 pandemic as supermarkets struggled to meet demand for essential items such as bread and milk. Both saw growth in this quarter compared to last year with category share of 0.7% and 3.1% respectively1.
Consumers have also been seeking out a wider range of products with the personal care and household categories reversing the decline of the previous year with dollar growth of 3.2% and 5.8% respectively (compared to 2.3% and -2.7% last year). There was also significant continued triple digit value growth in the medicinal category (150.7%) driven by nicotine replacement therapy.
To win in 2021, petrol retailers should assess their in-store offering and make sure they are focusing on the categories that are in high demand within their store. A particular focus should be paid to their on-the-go food and beverage offerings along with working with suppliers to range NPD in a range of pack sizes.
Sources:
1 IRI Market Edge Petrol, New Zealand, Data to 17/01/21
2IRI Market Edge Petrol, New Zealand, Data to 27.12.20 [Christmas/Festive period = 4wks to 27.12.20, MAT = 52wks to 27.12.20]
