ANALYSIS

a) Competitive retail selling prices:

Coffee and hot drinks are 13-31% below the average street price and placed in the bottom quartile:

AAFCANS Coffee

• 12oz $4.00 / 16oz $4.50

MARKET Coffee

• 12oz $4.50 / 16oz $5.00

AAFCANS continues to offer one of the most competitive loyalty plans in Australia.

50% of AAFCANS top-selling hot snacks surveyed in the bottom two quartiles (below market pricing).

80% of AAFCANS key breakfast products surveyed in the bottom two quartiles (below market pricing).

Top selling energy drinks and retail showed pricing at median or an average 4-11% below median pricing.

An internal national survey of pricing of retail products was undertaken. 74 different local competitors were surveyed, representing businesses surrounding 25 AAFCANS outlets.

• 130 top-selling food products and 60 top-selling retail product lines were compared with a data set of 1,604 price entries collected. AAFCANS overall retail offer either meets the median pricing or is lower by up to 25% compared to the median price

• AAFCANS coffee and hot drinks offer surveyed on average between 13-31% below median pricing. 70% of AAFCANS coffee and hot drinks offer, when compared to market, placed in the bottom two quartiles

• With barista-made coffee products AAFCANS provide a quality offering at some of the lowest retail selling prices in Australia. AAFCANS loyalty offer scores highly with comparable external offers. The coffee menu, loyalty app incentive and ice-drinks menu continue to show growth and form an important connection with customer frequency and overall brand loyalty

• 20 top-selling hot snacks were bench-marked:

- 50% of products were less than median

- 20% of products were 45% less than median

• Our retail offer (cold drinks and snacks) bench-marked from the 2^nd quartile to the median, with some products 4-25% less than Civvy Street prices.

• Data showed the top selling energy drinks were on average 4-11% lower than competitors. Flavoured milks and carbonated drinks were on average equal to market pricing or 5-40% below market.

b) Target a 10% sales growth on the redesigned MFV for that run against prior period.

The 2WD MFV that was initially built in early June 2018 continues to be fine-tuned with rectifications being done to ensure the consistent delivery of AAFCANS offerings. The 4WD MFV has been utilised for exercises and on base activities at Gallipoli Barracks through the year.

No growth comparisons can be made as the new MFVs have not yet replaced specific runs.

c) Post implementation: using ADFA canteen, increase transaction volume by 10% between 12.00pm – 2.00pm over base year FY2018 excluding December/January.

Trial an online portal and APP called “AAFCANS On-Demand”, supplying customers with products for pickup or delivery. Assess ongoing viability.

The new electronic point-of-sale system increased transactions at ADFA between 12:00pm to 2:00pm from 108,000 to 210,000 during FY19, demonstrating faster process speeds. During FY20 the impact of the COVID-19 pandemic has significantly affected the sales at ADFA. The transactions slowed significantly in the Feb – June period making comparisons on previous years inaccurate and ineffective.

AAFCANS On-Demand webstore development was completed in June 2020. Live trials were undertaken in the first quarter of 2020-21 (outside the year in review).

d) Two facilities established or upgraded.

The following facilities were upgraded or established during 2019-20:

• Completion of Gallipoli Barracks canteen refurbishment
• Refurbishment of Holsworthy Barracks canteen and the establishment of a new cafe facility
• Fit-out of the new canteen at RAAF Williamtown
• Opening of the new kiosk facility, RAAF Edinburgh Sea Lion café
• Opening of the new RAAF Amberley Heritage Centre kiosk

e) AAFCANS deploys on request in support of at least 2 of the 3 major exercises (Exercise Pitch Black, Talisman Sabre and Hamel).

AAFCANS participated in the Gallipoli Barracks Open Day, Exercise Hamel and AASAM at Greenbank (Qld). The other exercises did not run due to COVID-19 restrictions.

Our participation in exercises and events are a key element of our business, ensuring that AAFCANS is not only of assistance and service to Defence personnel but increases our understanding of the Defence environment and improves communication with our stakeholders.