What the sale of Woolworths Petrol will mean for Australia’s convenience and food industries

Posted by AFN Staff Writers on 9th January 2017
Petrol

For Australian Food News readers that may have been away over the recent holiday period, on 24 December 2016 Woolworths finally reached an agreement with BP to sell the 527 Woolworths fuel convenience sites for AUD $1.78 billion.

The sale, which is still subject to approval by the Australian Competition and Consumer Commission (ACCC), will mean BP will become Australia’s largest petrol station owner (if approved by the ACCC).

So what might the sale mean for Australia’s petrol, convenience, food and supermarket industries?

  • Convenience to focus on fresh, ready-to-go food

The sale could mean a shake up to the focus of the convenience sector in Australia with BP already saying the ‘Metro at BP’ stores “will be a first of its kind for Australia’s growing convenience sector”. BP says it will be introducing a new range of high quality, ready-to-eat and take home fresh food products.

  • More loyalty offerings

It is proposed that BP will become a “cornerstone” partner in Woolworths’ Everyday Rewards loyalty program, inviting customers to earn reward points on both fuel and in-store purchases at any BP site across Australia. Woolworths Everyday Rewards cardholders will now be able to redeem points at the register as discounts on purchases at BP.

  • Further discount offerings

BP will maintain the Woolworths’ 4 cents per litre redemption offer at existing Woolworths fuel stores along with BP Australia’s existing sites, giving Australians more opportunities to be enticed by the discount offering.

  • A loss for Metcash

Independent grocery wholesaler, Metcash, currently provides many of the products sold in BP stores. With BP now honouring Woolworths discount dockets and getting involved with its Everyday Rewards program, it is suspected that Woolworths would most likely take over as the product supplier.

  • Woolworths will be able to concentrate more on its core supermarket business

According to investment management firm, Morningstar, now Woolworths has sold its petrol business it will not only be able to channel the sale money back into its business to help improve its bottom line, but it will also be able to concentrate more on improving its core supermarket business.

  • BP’s experience

BP has international experience in similar business arrangements, teaming up with UK retailer Marks and Spencer to run its petrol convenience stores in the UK.

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