1 00:00:05,880 --> 00:00:08,520 Speaker 1: Welcome to the Fear and Greed Business Interview. I'm sure Alma, 2 00:00:08,640 --> 00:00:12,840 Speaker 1: Australia's spending habits are shifting. In the latest quarter, beauty, 3 00:00:12,840 --> 00:00:16,639 Speaker 1: pharmacy and retail surged while categories like alcohol, petrol and 4 00:00:16,720 --> 00:00:19,320 Speaker 1: PetCare took a hit. It's all part of a changing 5 00:00:19,320 --> 00:00:23,160 Speaker 1: consumer landscape tracked by consumer data and research group FONTO, 6 00:00:23,480 --> 00:00:26,280 Speaker 1: which captures real time purchasing behavior from tens of thousands 7 00:00:26,320 --> 00:00:29,960 Speaker 1: of Australians. Ben Dixon is the CEO of FONTO. Then, 8 00:00:30,000 --> 00:00:31,040 Speaker 1: welcome back to Fear and Greed. 9 00:00:31,240 --> 00:00:32,480 Speaker 2: Thanks Sean, nice to be here. 10 00:00:32,720 --> 00:00:37,080 Speaker 1: Just remind me again how you capture the data and 11 00:00:37,120 --> 00:00:39,479 Speaker 1: create the statistics that you do. 12 00:00:39,680 --> 00:00:42,960 Speaker 2: Sure, we've got let's call it, ninety thousand Australians who 13 00:00:43,360 --> 00:00:45,839 Speaker 2: opt in to share their daily transaction data as you 14 00:00:45,840 --> 00:00:48,519 Speaker 2: would see it on their bank statements, and we reward 15 00:00:48,560 --> 00:00:50,720 Speaker 2: them for doing that, and then we bring that down 16 00:00:50,720 --> 00:00:53,720 Speaker 2: to a representative subset and we weight that to ABS 17 00:00:53,760 --> 00:00:56,840 Speaker 2: statistics so that it's a nice neat set. And from that, 18 00:00:57,120 --> 00:00:58,959 Speaker 2: with all that data that they share, we're able to 19 00:00:59,000 --> 00:01:01,960 Speaker 2: build category in our category insights all those sorts of things. 20 00:01:02,160 --> 00:01:04,080 Speaker 1: Okay, so that's how you do it. Let's take some 21 00:01:04,120 --> 00:01:07,039 Speaker 1: of the categories there. Alcohol's an obvious one for many people. 22 00:01:07,959 --> 00:01:10,480 Speaker 1: It's actually not doing as well as it was. 23 00:01:10,920 --> 00:01:15,039 Speaker 2: Yeah, it's interesting. What we're seeing is that penetration. It is, 24 00:01:15,080 --> 00:01:17,800 Speaker 2: the number of people who are spent in that category 25 00:01:17,840 --> 00:01:20,400 Speaker 2: in the last quarter versus the same quarter last year 26 00:01:20,640 --> 00:01:23,880 Speaker 2: is down. It's down about five percent. But also the 27 00:01:23,959 --> 00:01:26,920 Speaker 2: frequency at which those people are spending in that quarter 28 00:01:27,360 --> 00:01:30,119 Speaker 2: is also down and around about six percent. So overall, 29 00:01:30,120 --> 00:01:34,200 Speaker 2: when you look at spend per capita across the whole country, 30 00:01:34,319 --> 00:01:38,679 Speaker 2: we're seeing quite a significant decline in spending alcohol for 31 00:01:38,760 --> 00:01:39,800 Speaker 2: the quarter year on year. 32 00:01:39,840 --> 00:01:42,920 Speaker 1: As you're saying, so whatever reason that is, it's health, whatever, 33 00:01:42,959 --> 00:01:45,200 Speaker 1: people are deciding that, maybe it's the cost of living thing. 34 00:01:45,440 --> 00:01:48,960 Speaker 1: I'm interested that what that means for the actual companies 35 00:01:49,080 --> 00:01:52,480 Speaker 1: selling the alcohol. Now that's obviously based on the fact 36 00:01:52,480 --> 00:01:55,800 Speaker 1: that Coal's consolidating its brands is do you think that's 37 00:01:55,800 --> 00:01:56,960 Speaker 1: a reflection of that trend? 38 00:01:58,080 --> 00:02:00,559 Speaker 2: Look at is but what's been interesting for us, first, 39 00:02:00,600 --> 00:02:03,640 Speaker 2: if we go to the market, really only celebrations in 40 00:02:03,680 --> 00:02:07,440 Speaker 2: bws both grew the basket size, so the amount spent 41 00:02:07,520 --> 00:02:10,200 Speaker 2: in each time and the frequency at which the others 42 00:02:10,200 --> 00:02:14,040 Speaker 2: were coming basket size, probably driven by price increases, still 43 00:02:14,040 --> 00:02:18,560 Speaker 2: grew for the likes of Dan Murphy's and others. But 44 00:02:19,040 --> 00:02:21,840 Speaker 2: the big movement that we've been watching and watching closely 45 00:02:21,919 --> 00:02:26,000 Speaker 2: is the consolidation under Coleslicker, so first choice and vintage 46 00:02:26,000 --> 00:02:30,960 Speaker 2: sellers moving under Lickland banner. So we're seeing significant declinents 47 00:02:31,040 --> 00:02:35,720 Speaker 2: in first choice and vintage sellers, penetration and the number 48 00:02:35,760 --> 00:02:39,200 Speaker 2: of people going as we should. What's been surprising to 49 00:02:39,400 --> 00:02:42,280 Speaker 2: us is that in this quarter we haven't seen the 50 00:02:42,320 --> 00:02:47,080 Speaker 2: shift yet to Liquorland, so one plus one isn't necessarily egaling. 51 00:02:47,200 --> 00:02:49,679 Speaker 2: Now Lickland is still beating the category average, so that's 52 00:02:49,680 --> 00:02:52,760 Speaker 2: good news for them, but we'd expected to see a 53 00:02:52,800 --> 00:02:55,519 Speaker 2: bigger uplift in Lickland and we haven't seen that yet. 54 00:02:55,600 --> 00:02:57,800 Speaker 2: We're going to continue to track every day and we 55 00:02:57,840 --> 00:02:59,400 Speaker 2: may well see that. We just haven't seen it yet, 56 00:02:59,400 --> 00:03:00,600 Speaker 2: which was surprise to us. 57 00:03:00,800 --> 00:03:03,679 Speaker 1: Okay, pharmacy, let's take the other side. So pharmacy is 58 00:03:03,680 --> 00:03:04,639 Speaker 1: actually doing pretty well. 59 00:03:05,120 --> 00:03:06,160 Speaker 2: Farmercy is doing very well. 60 00:03:06,160 --> 00:03:07,000 Speaker 1: Why is that well. 61 00:03:07,240 --> 00:03:10,320 Speaker 2: We're seeing stable or half a percent up on penetration 62 00:03:10,480 --> 00:03:14,040 Speaker 2: and that's okay, it's actually good. But we're seeing growth 63 00:03:14,080 --> 00:03:16,720 Speaker 2: in one, the number of times in a quarter, and 64 00:03:16,760 --> 00:03:19,000 Speaker 2: again we're talking quarter on quarter, a year on year. Here, 65 00:03:19,400 --> 00:03:21,280 Speaker 2: we're seeing the number of times people are going to 66 00:03:21,320 --> 00:03:24,720 Speaker 2: pharmacy increasing, and we're seeing the spending there, and we 67 00:03:24,760 --> 00:03:27,040 Speaker 2: think a lot of that has to do with what 68 00:03:27,040 --> 00:03:30,240 Speaker 2: we call grocery migration. So there's obviously this battle around 69 00:03:30,240 --> 00:03:33,640 Speaker 2: toilet paper and personal care and beauty products that's going 70 00:03:33,680 --> 00:03:38,640 Speaker 2: on pharmacy versus the big grocery outlets. And we ask 71 00:03:38,720 --> 00:03:40,840 Speaker 2: our members, so we also get to survey our members, 72 00:03:41,080 --> 00:03:43,520 Speaker 2: so we ask them why, when we know they've bought 73 00:03:43,520 --> 00:03:47,000 Speaker 2: those particular products, why did you choose a pharmacy not 74 00:03:47,120 --> 00:03:50,120 Speaker 2: the supermarket? And the three top answers that we're getting 75 00:03:50,160 --> 00:03:53,400 Speaker 2: back are I found that the discounts or the pricing 76 00:03:53,520 --> 00:03:56,200 Speaker 2: better in the pharmacy. I was already in the pharmacy, 77 00:03:56,200 --> 00:03:59,000 Speaker 2: so that was easier to buy while I was there, 78 00:03:59,400 --> 00:04:02,800 Speaker 2: and the supermarket didn't have the exact brand or product 79 00:04:03,160 --> 00:04:06,160 Speaker 2: that I wanted. So pharmacy is sort of starting to 80 00:04:06,240 --> 00:04:09,120 Speaker 2: encroach into that space as we're seeing Bunnings do I 81 00:04:09,160 --> 00:04:11,600 Speaker 2: suppose a little bit with things like laundry detergent and 82 00:04:11,600 --> 00:04:12,200 Speaker 2: that sort of thing. 83 00:04:12,600 --> 00:04:16,800 Speaker 1: Yeah, in pharmacies are they. I think of chemist Warehouse here, 84 00:04:16,839 --> 00:04:21,040 Speaker 1: but they're kind of almost they're not quite big box retailers, 85 00:04:21,040 --> 00:04:23,880 Speaker 1: but they're sort of medium box retailers nowadays compared to 86 00:04:23,920 --> 00:04:24,400 Speaker 1: what they were. 87 00:04:24,800 --> 00:04:27,400 Speaker 2: Yeah, they're certainly moving in that direction. And if you 88 00:04:27,440 --> 00:04:30,200 Speaker 2: think about the number of skews on shelf today in 89 00:04:30,279 --> 00:04:33,880 Speaker 2: some of the particularly places like Chemists Warehouse and price Line, Yeah, 90 00:04:33,880 --> 00:04:37,599 Speaker 2: they're moving towards a much broader number of categories. And 91 00:04:37,640 --> 00:04:39,400 Speaker 2: again it's one of the things we're starting to track 92 00:04:39,520 --> 00:04:42,360 Speaker 2: very closely is what's happening in pharmacy, both back of 93 00:04:42,440 --> 00:04:44,920 Speaker 2: shop where you get your ethical goods from a pharmacist, 94 00:04:45,200 --> 00:04:47,160 Speaker 2: and front of shop as well, and how is that 95 00:04:47,240 --> 00:04:47,839 Speaker 2: playing out? 96 00:04:48,080 --> 00:04:51,599 Speaker 1: Stay with me, Ben, we'll be back in a minute. 97 00:04:56,279 --> 00:04:59,120 Speaker 1: I'm speaking to Ben Dixon, chief executive of FONTE. We've 98 00:04:59,120 --> 00:05:02,560 Speaker 1: been talking alcohol. You mentioned Bunnings then, I mean that's 99 00:05:02,640 --> 00:05:04,960 Speaker 1: kind of like a category owner, isn't it. 100 00:05:04,960 --> 00:05:07,960 Speaker 2: It is so when we think about you know, DIY 101 00:05:08,120 --> 00:05:13,320 Speaker 2: or home improvement, it has a huge percentage of the category. Interestingly, 102 00:05:13,360 --> 00:05:16,440 Speaker 2: we've seen penetration flat in the last corner, but actual 103 00:05:16,600 --> 00:05:19,000 Speaker 2: spend going down a little bit, which surprised this and 104 00:05:19,080 --> 00:05:22,360 Speaker 2: might mean people are doing slightly less DIY, but we've 105 00:05:22,400 --> 00:05:26,039 Speaker 2: seen about a six percent decline in spending the DIY category, 106 00:05:26,080 --> 00:05:29,560 Speaker 2: not all Bunnings. But we also are seeing that they 107 00:05:29,600 --> 00:05:31,960 Speaker 2: are starting to take from the supermarkets. And you know, 108 00:05:32,000 --> 00:05:34,760 Speaker 2: the supermarkets have talked about it openly, and as we 109 00:05:34,800 --> 00:05:38,120 Speaker 2: all know, they now have submitted their price list for 110 00:05:38,160 --> 00:05:40,560 Speaker 2: the a trip le c to go through the top 111 00:05:41,279 --> 00:05:44,920 Speaker 2: twelve products or so. But supermarkets doll openly talk about 112 00:05:45,040 --> 00:05:48,200 Speaker 2: the DIY and the pharmacy sector taking some of their lunch. 113 00:05:48,839 --> 00:05:51,040 Speaker 1: Mind you, the supermarkets have taken some of the pharmacy 114 00:05:51,040 --> 00:05:52,960 Speaker 1: sectors lunch over the last fifteen or twenty years. 115 00:05:53,040 --> 00:05:55,240 Speaker 2: Yeah, I think it's all fair game. And you know, 116 00:05:55,279 --> 00:05:58,400 Speaker 2: there was no surprise that particularly pharmacies started to fight back. 117 00:05:58,440 --> 00:05:59,280 Speaker 2: If that's the right word. 118 00:06:00,080 --> 00:06:01,400 Speaker 1: I'm going to throw one at you that we haven't 119 00:06:01,400 --> 00:06:03,080 Speaker 1: even talked about off here. But I'm just interested because 120 00:06:03,080 --> 00:06:05,920 Speaker 1: I'm looking at the number. See petrol, Yeah, wow, what's 121 00:06:05,960 --> 00:06:06,520 Speaker 1: happened there. 122 00:06:07,040 --> 00:06:09,640 Speaker 2: Look, we're saying a bee decline in petrol, and we 123 00:06:09,680 --> 00:06:11,680 Speaker 2: think that aligns with the fact that people are moving 124 00:06:11,680 --> 00:06:15,360 Speaker 2: to hybrid and electric vehicles, So it makes sense to us, 125 00:06:15,400 --> 00:06:18,719 Speaker 2: and again we track it, but that's the biggest explanation 126 00:06:18,839 --> 00:06:21,200 Speaker 2: we can see. We can see that decline in spend 127 00:06:21,640 --> 00:06:25,119 Speaker 2: and yeah, that's an easy explanation, I think. 128 00:06:25,680 --> 00:06:27,560 Speaker 1: And then I also just want to mention beauty because 129 00:06:27,560 --> 00:06:30,119 Speaker 1: that's at the other end. Some of us are spending 130 00:06:30,120 --> 00:06:32,120 Speaker 1: a lot more on beauty products spend. I'm not sure 131 00:06:32,160 --> 00:06:35,360 Speaker 1: about yourself. I'm only seeking from me every day, every day. 132 00:06:35,960 --> 00:06:38,120 Speaker 1: I mean the customers spend on that's up enormously. 133 00:06:38,320 --> 00:06:40,359 Speaker 2: Yeah, And it's funny, there's a number of categories, so 134 00:06:40,920 --> 00:06:43,680 Speaker 2: delivery aggregators, I think maybe we're getting a little lazier 135 00:06:44,000 --> 00:06:47,640 Speaker 2: fast food up, delivery aggregators up. But beauty and pharmacy 136 00:06:47,640 --> 00:06:50,120 Speaker 2: we've already talked about. But beauty definitely up. It's a 137 00:06:50,160 --> 00:06:52,120 Speaker 2: category that's in a bit of a boom time at 138 00:06:52,120 --> 00:06:54,840 Speaker 2: the moment, which is great. But yeah, we're definitely seeing 139 00:06:54,880 --> 00:06:56,160 Speaker 2: beauty up. Yeah. 140 00:06:56,279 --> 00:07:02,359 Speaker 1: Okay, so broadly, can we draw trends out of what's 141 00:07:02,400 --> 00:07:05,239 Speaker 1: going on? You almost did, then write wrote the last 142 00:07:05,240 --> 00:07:07,000 Speaker 1: but what are some of the big trends you can 143 00:07:07,040 --> 00:07:08,920 Speaker 1: see across consumer spending? 144 00:07:10,000 --> 00:07:13,520 Speaker 2: I think some of the what we would call need 145 00:07:13,600 --> 00:07:17,800 Speaker 2: to haves versus the luxury or the discretionary items we 146 00:07:17,840 --> 00:07:20,360 Speaker 2: are seeing shifts in the discretionary and shifts to the 147 00:07:20,400 --> 00:07:23,120 Speaker 2: positive for more of the discretionary, and we are seeing 148 00:07:23,600 --> 00:07:25,920 Speaker 2: slight declines or tightening of some of the what we 149 00:07:25,960 --> 00:07:28,640 Speaker 2: would call basics or need to have. We've actually even 150 00:07:28,640 --> 00:07:31,280 Speaker 2: seen a slight decline which is interesting in telco and internet, 151 00:07:31,600 --> 00:07:33,960 Speaker 2: which Yeah, so it's just the spend and of people 152 00:07:34,040 --> 00:07:37,120 Speaker 2: finding better deals. Are they pushing pushing down? But yeah, 153 00:07:37,200 --> 00:07:41,560 Speaker 2: so Petrolco, some of those things. Yeah, slight declines, but 154 00:07:41,840 --> 00:07:43,880 Speaker 2: beauty and fast food and those sorts of things. 155 00:07:43,960 --> 00:07:46,960 Speaker 1: Yeah, does that suggest that the cost of living crisis 156 00:07:47,120 --> 00:07:48,600 Speaker 1: has peaked. I'm not saying it's over. 157 00:07:49,440 --> 00:07:51,600 Speaker 2: Yeah, I think that's it. We're very careful what we 158 00:07:51,640 --> 00:07:53,400 Speaker 2: say about that because there's a lot still to come 159 00:07:53,440 --> 00:07:56,640 Speaker 2: down the line as people move through the process. But yeah, 160 00:07:56,680 --> 00:08:00,160 Speaker 2: definitely we're seeing, as I say that, discretionary spend up 161 00:08:00,160 --> 00:08:03,880 Speaker 2: across different categories, and I think people are just shifting 162 00:08:04,640 --> 00:08:07,400 Speaker 2: at the moment or we're still going through a period 163 00:08:07,400 --> 00:08:09,680 Speaker 2: of head buried in the sand. But I don't think 164 00:08:09,720 --> 00:08:12,200 Speaker 2: that's the case. I think we're just seeing hopefully a 165 00:08:12,240 --> 00:08:14,560 Speaker 2: bit more stability, which means people are spending where they 166 00:08:14,600 --> 00:08:17,560 Speaker 2: want to spend in addition to where they need to spend. 167 00:08:17,680 --> 00:08:23,280 Speaker 1: Okay, so Fondo's data. I presume your customers are retailers 168 00:08:23,720 --> 00:08:28,680 Speaker 1: different types and sizes. I'm sure they act on it. 169 00:08:28,720 --> 00:08:32,520 Speaker 1: But how agile are Australian retailers in terms of being 170 00:08:32,520 --> 00:08:34,920 Speaker 1: able to use the data and doing something about it? 171 00:08:35,559 --> 00:08:37,800 Speaker 2: And it's one of the points we really push in 172 00:08:37,800 --> 00:08:40,400 Speaker 2: that is, if you can get more timely, more accurate 173 00:08:40,480 --> 00:08:43,120 Speaker 2: data in the world of research, you know, that's got 174 00:08:43,160 --> 00:08:44,760 Speaker 2: to be the focus. How do we get things on 175 00:08:44,800 --> 00:08:48,000 Speaker 2: your desk that's a real data, not claimed or recoll behavior, 176 00:08:48,280 --> 00:08:51,360 Speaker 2: as quickly as possible. It allows those people running the 177 00:08:51,360 --> 00:08:53,640 Speaker 2: strategy and the tactics within any of the retailers or 178 00:08:53,679 --> 00:08:56,520 Speaker 2: in fact the manufacturers and supplies as well, to move 179 00:08:56,559 --> 00:08:59,640 Speaker 2: a bit faster, and customers aren't prepared to wait around 180 00:08:59,640 --> 00:09:02,120 Speaker 2: anymore or have things out of stock, are offshelf, or 181 00:09:02,240 --> 00:09:04,960 Speaker 2: lack of innovation. So for us, it's a big focus 182 00:09:05,080 --> 00:09:07,160 Speaker 2: to push the retailers when we can get the more 183 00:09:07,160 --> 00:09:08,280 Speaker 2: accurate dNaM more timely. 184 00:09:08,400 --> 00:09:09,640 Speaker 1: And are they getting better at it? 185 00:09:10,040 --> 00:09:11,880 Speaker 2: I think they are. I think they are own pockets 186 00:09:12,160 --> 00:09:14,440 Speaker 2: and I think they've got different structures on how they 187 00:09:14,480 --> 00:09:16,840 Speaker 2: attack things. Quite quickly. And it's interesting to see some 188 00:09:16,880 --> 00:09:18,520 Speaker 2: of the old school businesses. And we do a lot 189 00:09:18,520 --> 00:09:21,760 Speaker 2: in QSR or fast food, and some businesses are very 190 00:09:21,760 --> 00:09:24,679 Speaker 2: agile and how they'll put new things out in terms 191 00:09:24,679 --> 00:09:26,800 Speaker 2: of types of burgers or types of chicken or whatever 192 00:09:26,840 --> 00:09:29,040 Speaker 2: it might be, versus others who have to go through 193 00:09:29,080 --> 00:09:31,480 Speaker 2: a long process and it takes too long and you 194 00:09:31,520 --> 00:09:34,160 Speaker 2: can try and fail, or you can go through a 195 00:09:34,160 --> 00:09:36,480 Speaker 2: long process and it becomes too long. 196 00:09:36,880 --> 00:09:39,079 Speaker 1: And are those that are agile and able to get 197 00:09:39,080 --> 00:09:41,840 Speaker 1: it up the new burger for the sake of the example, 198 00:09:42,400 --> 00:09:43,440 Speaker 1: do they tend to do better? 199 00:09:43,840 --> 00:09:46,600 Speaker 2: I think so yes, because you can fail fast, but 200 00:09:46,679 --> 00:09:48,719 Speaker 2: then you know, if you do a good job, it's 201 00:09:48,760 --> 00:09:50,719 Speaker 2: out and it's running. And people got to think, oh, 202 00:09:50,760 --> 00:09:52,680 Speaker 2: that wasn't a bad idea and can I copy that? 203 00:09:52,920 --> 00:09:54,920 Speaker 1: Yeah? Fantastic, Ben, thank you for talking to Fear and 204 00:09:54,960 --> 00:09:58,560 Speaker 1: Greed Pleasure Sean. It's Ben Dixon, CEO of FONTO. This 205 00:09:58,679 --> 00:10:00,520 Speaker 1: is the Fear and Greed Business Interview. You join us 206 00:10:00,520 --> 00:10:02,760 Speaker 1: every morning for the full episode of Fear and Greed 207 00:10:03,040 --> 00:10:06,280 Speaker 1: Business News you can use I'm chanelma Enjoy your day, 208 00:10:11,240 --> 00:10:11,600 Speaker 1: m HM.