Theo Foukkare, CEO AACS
The CEO of the 32-year-old organisation AACS (Australian Association of Convenience Stores), Theo Foukkare, shared that his start within the industry began as a graduate of British American Tobacco approximately 25 years ago. For six years, this opportunity gave Foukkare the foundations he needed for learning and development, customer management, and trade and brand marketing.
"They provided me with a solid platform to have a springboard for my career," said Foukkare.
Following this, Foukkare met the owner of Pacific Optics while on an overseas study tour when the company was in the preliminary stages of building its business. When Foukkare returned from the trip, he was offered a job with equity in the company, which he accepted after discussing it with his wife.
"We decided it was right for us, so we relocated from Sydney to the Gold Coast."
The business grew its turnover from six million to 80 million dollars after 17 and a half years of work, transforming from a small supplier to the largest supplier of general merchandise products to the Australian petrol and convenience market. Through his work at Pacific Optics, Foukkare cultivated strong relationships with all major retailers and independent buying groups across all levels.
“Then we sold our business to private equity. Before selling, I was a supplier director with the Association [AACS], so supply directors voted on the board. I held that role for a few years while still at Pacific Optics as General Manager."
Foukkare’s predecessor in his current role then retired, allowing Foukkare to put his hand up and be considered as the next CEO of AACS. From 100 applicants shortlisted to 20, the board selected Foukkare as the right candidate for the role.
The AACS has 100 supplier and manufacturer partners. It represents the interest of significant petrol and convenience retailers in Australia and all the major state-based groups and multi-site operators, where the focus is zeroed on the retail component.
Foukkare shared that the AACS-specific focus has been on developing small box retailing to provide the local community, suburban or regional areas, and Australian motors as locations where consumers can rest, recharge, and keep themselves busy between travelling destinations.
The AACS performs three key features. First, it undertakes significant advocacy for its strategic priorities with federal and state governments. Secondly, it provides local and global insights into convenience, retail, and trends to its members. Finally, it creates networking opportunities between its members.
Through his own experience, Foukkare shared that he was connected to the wants of retailers, which helps the CEO articulate the association's strategic priorities regarding key areas such as health foods.
"Looking at the customer and what drives them to go into a retail outlet to make a purchase, that's provided me with a solid understanding of what our supplier members need to deliver to achieve results with their retail partners."
Retail has run in Foukkare's family through his grandfather. With the CEO sharing his personal experience, he can think from a retailing point of view. Furthermore, Foukkare works closely with senior executives who manage significant retail businesses. Therefore he's been able to take both of these learnings and apply them to his current role.
Foukkare detailed that when reflecting on the quality of convenience food available from a decade prior, customers could buy an 'okay' pie and an average sandwich. Comparatively, Foukkare shared that consumers today are more informed and revealed that the association was in the business to make customers' lives easier.
Tobacco remains one of the most significant drivers of sales in the petrol communion space at 35 percent, despite experiencing the most significant decline as a category. This decline has been offset by the robust illicit tobacco and illegal vaping market, propelled by cost efficiency and Australia's bans on nicotine vapes that have wavered in consumer demand.
However, the second largest category at 25 percent is packaged beverages accounting for two and half billion dollars, and it has continued to grow. Following this is food service, totalling 12 percent of sales, with a good amount of growth within the category, making up close to 50 percent of total shop sales for many of the association's retailers.
The food service category encompasses not only pies and sausage rolls but high-quality sandwiches delivered daily and meals that can be heated at retail stores, which have become a popular choice for the busier, time-poor consumers looking for a convenient and nutritious dinner. The category has experienced six years of consistent growth, which grew by 21 percent in 2022 compared to the previous calendar year, which Foukkare estimated will continue to grow. Due to the development and popularity of the category, retailers are predicted to have complete commercial kitchens within the premises in future.
Meal combinations with beverages and home delivery have also been significant growth drivers for the food service category. Retailers have started creating more opportunities by combining deals for high-quality food and drinks, ranging from hot coffee to functional beverages to classic sodas.
Another significant growth category is snacks, the fastest-growing category in 2022 despite only making up two and a half percent of the total shop sales. However, Foukkare shared that the growth driver for snack foods had been items such as chips and convenient share bags.
Foukkare revealed that grocery has also been a growth area for convenience retailers. With Australians entrenched in purchasing weekly, the growth has been centred around midweek top-ups for essential items such as milk, bread, or any other small things the consumer wants to avoid travelling to the supermarket to buy. Hence, retailers have begun stocking shelves with more grocery items to accommodate convenience options for consumers, with the category growing by 12 percent over 2021.
"That's on top of 7 percent the prior year and on top of 20 percent the prior year, which happened through COVID as consumers were looking to either not be around a lot of people in a big supermarket or go to a location closer to their home where they could get in and out quickly."
The CEO revealed that there would continue to be a focus on consumer choice with prioritisation of health as consumers have become more knowledgeable about the impacts of their food and beverage choices.
We're seeing a significant investment into low or no sugar across the board.
"We're seeing a significant investment into low or no sugar across the board."
Furthermore, plant-based trends have started influencing convenience options with products such as plant-based sausage rolls and pies, including vegan take-home meal options. In snacking, protein balls, biscuits, and health-related fitness drinks with functional purposes have become more popular.
Foukkare stated that significant challenges for the convenience industry were directly related to the black market developing in Australia for tobacco and nicotine products, the second being EV cars as the CEO shared that while demand for the vehicles had increased, the opportunity to capitalise on charging time was not supported by the evidence from overseas, where Foukkare shared 70 to 80 percent of charging would happen at home. However, Foukkare does believe that the industry is in a position to offer a quick recharge. This will be between 12 to 15 minutes or five to seven if it's a fast charge. Therefore, the industry will continue to invest in other areas, making service stations a destination rather than a pit stop.
"We want to be a destination. And we don't want to be referred to as a servo. We want to effectively be, you know, a roadside retailer in the future. That just so happens to sell fuel."
