The Australian Roadshow: understanding the Victorian market

As a relatively small state with a high population, Victoria is a highly competitive retail environment.

Customers have multiple choices in offers, explains Ritchies Stores CEO Fred Harrison, and it’s not difficult to travel to a nearby town to do your weekly shopping.

“In other states there’s a tyranny of distance. However, in Victoria, we’re packed in a little like sardines, and it’s always easy to shop on price in many close locations,” he says.

Weather is also a contributor to sales performance in Victoria.

“Nothing drives a strong week of sales more than five or six consecutive days of hot weather coming off the back of the winter/spring months,” Mr Harrison says.

As the grocery industry evolves, retailers are noting changes in customers’ buying habits. Most suppliers are now launching premium new lines, says Mr Harrison, and much of the growth (particularly in Ritchies Fine Food and Wine stores) has come through premiumisation.

“That’s not to say that it’s all about selling dearer products, as quality is integral, but there’s been a real push across the industry to concentrate on providing consumers with a more premium offer,” he says.

Another significant development that has been accelerated recently is around environmental and sustainable initiatives, whether it be LED lighting, carbon reduction, energy consumption or plastic reduction.

“All retailers have a role to play in lowering their impact on the world we leave the next generation,” Mr Harrison says.

In Victoria, as in many other parts of the country, customers are looking for local and Australian products.

Retailer and IGA State Board Chair Jeff Harper expects this interest to continue to grow.

“The major chains stopped stocking small local producers because they couldn’t offer national distribution, but independent stores like IGA have the ability and the space to get them on board and give these suppliers the opportunity to thrive,” he says.

“It’s more important than ever that we give these opportunities to these businesses. The ripple effect will be massive.”

Read more on the Victorian market in The Australian Roadshow feature in the July issue of Retail World.