Tobacconists and Other Specialised Grocery Retailing industry operators must diversify to maintain revenue growth
Melbourne, Australia (PRWEB) June 06, 2012
Tobacconists and other specialised grocery retailers endured a challenging trading environment over the five years through 2011-12. Following the implementation of graphic warning labels in 2006, retail spending on cigarettes and tobacco products declined as a share of household final consumption expenditure. According to IBISWorld industry analyst Claudia Burgio-Ficca, “the introduction of bans on the display of tobacco over this five-year period also contributed to the overall fall in demand”. Health and wellbeing also played a central role in the demand for confectionery, smallgoods, bread and cakes as a result of continued social awareness about the fat and sugar content of these goods. The combined effect of these factors led industry sales to decline by an annualised 0.5% over the five years through 2011-12.
Tobacconists and Other Specialised Grocery Retailing industry revenue is estimated to rise by 0.9% to reach $5.94 billion in 2011-12. Burgio-Ficca adds, “the modest rise in sales will stem from stronger growth in disposable income and a continued increase in consumer sentiment, which will bode well for retail shopping values”. Industry sales during the year are expected to be affected by a continued decline in smoking rates, which will negatively affect consumer demand for cigarette and tobacco products. Competition from supermarket and other external players will ensure that price remains a focal point for generating sales. Market share concentration is low due to 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. There are no major players in the Tobacconists and Other Specialised Grocery Retailing industry.
Tobacconists and other specialised grocery retailers will experience modest growth over the five years through 2016-17, with revenue projected to rise by an annualised 1.1%. The introduction of plain packaging on tobacco products from 1 December 2012 is expected to lead to further declines in smoking rates (and the overall demand for tobacco). Tobacconists and Other Specialised Grocery Retailing industry revenue will be supported by growth in disposable income and consumer sentiment. Sales across the industry will continue to be affected by price and product competition from supermarkets. Consumer concerns regarding the fat and sugar content of smallgoods, confectionery, bread and cakes will also influence industry performance.
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 that are not manufactured on the same premises. Products are sourced from specialised wholesalers and then 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 this 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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