James Lowman is the CEO of the Association of Convenience Stores (ACS) in the UK. James recently spoke at the AACS Leadership Summit in Sydney and shared with attendees insights into the UK convenience market. ACS is the voice of over 33,500 local shops in the UK. In this interview, I found out how James enjoyed his trip to Australia, things he learnt and what the differences are between the UK and Australian convenience market.
How did you find your recent trip to Australia? Have you been here before and how was the experience?
Well, firstly, I love Sydney and my brother lives there, so on a personal level, I really enjoyed catching up with him and spending time in the sunshine in a great city. I went to Australia around Christmas and New Year 2010-11, including seeing us beat you in the Ashes at the MCG and SCG, so that was a great time! Sydney is really well set up for hosting an event like the AACS Conference and Jeff Rogut did a fantastic job of organising a very enjoyable and informative conference. So, overall, it was a memorable experience and somehow I didn’t get hit too badly by the jet lag, so that was a bonus.
When in Australia, did you get a chance to have a look at some petrol and convenience stores? Was there anything that surprised you?
I looked at some of the city centre stores and a couple of petrol forecourt sites. It’s not always easy to get a true picture of the market from the stores in the heart of a major city. I wouldn’t say central London stores are that representative of the UK market. With that caveat, I thought the Australian city centre stores were very focused on immediate consumption – food and drink for now – and that was probably a clearer focus than in the UK. Also, of course, no alcohol in the stores, which is a difference to the UK where it’s a very important category. I hope the AACS continue to make progress in the campaign for allowing alcohol to be sold in more convenience stores because it can be a significant part of the business. It’s good for consumers to have that choice and availability of professional, responsible outlets selling the products they want.
Could you give us a brief outline of the role the ACS plays in the UK?
Our priorities are very similar to those of the AACS. Our mantra is lobbying, advice and networking and that’s really what we spend our time doing. The main role is representing the convenience store industry to government on issues like employment costs, product regulation, business rates, and waste and recycling. We put a lot of resources into doing this and I think we’ve become an important consultant for government. We produce lots of compliance advice for retailers and because of an agreement we have with central government, this advice is valid throughout England and Wales. If local enforcement officers have a different opinion or interpretation of the law, our advice trumps that, which is really important peace of mind for retailers.
Then we run lots of events – dinners, conferences, study tours and information briefings. It’s a very important part of what we do and we’ve become the key network in the UK industry. I think we’re fortunate with the geography of the UK, that if we hold an event in Manchester or London or Birmingham, that’s two or three hours on a train or in the car for most people in the country. Distances in Australia are obviously much larger so it’s probably harder to bring everyone together for events. Increasingly, our research reports are at the heart of everything we do. Having relevant and credible information is vital in talking to government and to our status in the sector.
What do you see as the main differences between convenience stores in the UK and Australia?
I think stores in the UK have come from a different place to Australian c-stores, and indeed those in the United States. Many of our members have started out as local neighbourhood grocers and food retailers. They’ve moved, over time, to a convenience model of longer hours, a broader range of products, and more food and drink for immediate consumption. In Australia and the US, many retailers have come from a heritage of selling products to transient customers, based around food-for-now, and that’s reflected in the offer. I think we’re converging towards a similar convenience model but from very different starting points. To illustrate this, about 80% of Australian convenience stores sell fuel but less than 20% of UK convenience stores are located on fuel sites.
In the next 10 years, what are the main obstacles that convenience stores will face? What are the main opportunities?
Fundamentally, I think convenience stores are in a good place because we’re relevant to customers’ lives. People want to shop little and often. Convenience, however they define it, is becoming more important in the purchasing decisions people make. We have great relationships with our customers, which is ultimately all any business really has to trade on. I see us providing very tailored solutions to our customers and a wider range of services, based on our location and convenience, to customers in every type of community. There are real threats though. As online shopping becomes more about short lead times and small quantities, that erodes our point of difference.
ServoPro is all about helping Independent Petrol and Convenience Retailers in Australia. What advice would you give to the Independents in order to compete with their much larger competitors?
Convenience stores are the ultimate micro-market business. In the UK, half of our customers come from within a quarter of a mile of the store and while this may be slightly different in Australia, just because of geography, the principle remains the same: differentiate and serve your local market and you can have great success. I also think that as communication technologies change, businesses need to be prepared to try things, measure the results and fail a few times. Better to make some mistakes than to miss out on opportunities to engage your customers in the ways they want to talk with you.