FLOURO-lit convenience stores in service stations are outperforming the humble corner shop in the ultra-convenient route trade market.

A new survey, by forecaster and analyst BIS Shrapnel, shows chain convenience stores and independent convenience stores, milk bars and delis are the sector's strongest-performing channels.

The route trade market competes in price, location and product range against food service outlets and supermarkets - substantial and well-defined channels, says BIS Shrapnel's

Interviews with route trade outlets indicate consumers patronise each channel for different reasons. BIS Shrapnel senior project manager and analyst Jan Kosky Roach says service stations with convenience stores - which attract customers with their long opening hours, quick service, short queues and convenient location - are expected to continue to increase.

"Chain convenience stores benefit from last-minute shoppers picking up forgotten items and the value people place on a clean environment and long opening hours. There is also an increasing incidence of food service being offered in this channel, which opens up a further revenue stream for owners and operators," she says.

BIS Shrapnel estimates fast-food sales account for about 12 per cent of turnover in the route-trade channel and expects this to grow to an average 27 per cent of turnover a year in the next two years.

However, Ms Kosky Roach says the percentage is low compared with European markets. In many EU markets, food service accounts for up to 60 per cent of turnover in route-trade outlets. The share of food service is much lower in many South-East Asian markets.

"The key to the success of independent convenience stores, milk bars, delis and corner stores lies in their customer service and the personal relationship between owner and customer. Given the independence of non-chain corner stores, they are better able to tailor their product range to suit the neighbourhood," says Ms Kosky Roach.

BIS Shrapnel estimates Australia is home to 40,000 route trade outlets, which turn over sales of confectionery, bakery products, snacks, dairy products, grocery products and beverages worth more than $3.3 billion annually. Ms Kosky Roach says the market is saturated.

"Some of the smaller outlets in the route-trade channel have expanded their product range to compete," she says.

The report shows the most significant products for route-trade outlets are cold beverages, confectionery, bakery items and snacks. BIS Shrapnel forecasts growth of only 0.4 per cent in turnover in the next two years.