Industry operators must diversify to maintain revenue growth
Melbourne, Australia (PRWEB) October 06, 2012
The Tobacconists and Other Specialised Grocery Retailing industry in Australia has endured a challenging trading environment over the five years through 2012-13, with industry sales expected to rise by an annualised 0.1%. Following the implementation of graphic warning labels in 2006, spending on cigarettes and tobacco products as a share of household final consumption expenditure has trended downwards. According to IBISWorld industry analyst Claudia Burgio-Ficca, ‘the introduction of bans on the display of tobacco over this period has contributed to the overall fall in demand’. Health and wellbeing have also played central roles in demand for confectionery and small-goods as a result of continued social awareness about the fat and sugar content of these goods. Retail demand over the past five years has also been driven by trends in real household disposable income, changes in consumer sentiment, increasing competition from supermarkets and convenience stores, rising input costs and a shift in consumer tastes and preferences towards a healthier lifestyle.
Sales for the Tobacconists and Other Specialised Grocery Retailing industry in Australia are expected to rise by 1.6% to $5.93 billion in 2012-13. The modest rise in sales will stem from stronger growth in disposable income and an increase in consumer sentiment. ‘The introduction of plain packaging on tobacco products is expected to have mixed results for the industry’, Burgio-Ficca adds. While it is expected that the short-term effect of plain packaging will be minimal, it is hoped that the new packaging will have a long-term effect by reducing the appeal of smoking to younger consumers. Industry sales during the year will also be affected by competition from supermarkets and other external players.
Tobacconists and other specialised grocery retailers are forecast to achieve modest growth over the next five years. The introduction of plain packaging on tobacco products from 1 December 2012 will have a minimal effect on cigarette sales, though the industry may be affected by a rise in demand for cigarettes on the black market as all packets will look the same and will be easier to copy. Tobacconists and other specialised grocery retailers will experience low levels of market share concentration over the five years through 2012-13. This has stemmed from a number of factors including the vast assortment of products retailed by this industry, the fragmented nature of operators and the lack of a dominate player accounting for a notable share of the industry.
For more information, visit IBISWorld’s Tobacconists and Other Specialised Grocery Retailing report in Australia industry page.
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IBISWorld industry Report Key Topics
Industry operators retail tobacco and a range of specialised foods including confectionery, smallgoods, bread and cakes, which are not manufactured on the same premises. Products are sourced from specialised wholesalers and sold via retail outlets to the general public. Businesses that primarily operate as supermarket or grocery stores or offer food for takeaway or immediate consumption are excluded from the industry.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Technology & Systems
Regulation & Policy
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