Coles Express will begin to disappear from local petrol stations next month if fuel producer and retailer Viva Energy gains approval from the competition watchdog for its merger with On The Run, an upstart quick-service restaurant and convenience brand.
The fuel refiner is rapidly building a network of convenience fuel stores, occupying prime real estate nationwide, that it intends to rebrand under the OTR model. It also plans to roll out fast electric charge stations to diversify and future-proof its business against declining fossil fuel sales.
South Australian based OTR brand sells a blend of traditional convenience items, fresh brewed coffee, squeezed juices, hot food, ready-made meals, and actively promotes pre-paid fuel and food sales through its app with loyalty discounts.
South Australian based OTR brand sells a blend of traditional convenience items, fresh brewed coffee, squeezed juices, hot food, ready-made meals, and actively promotes pre-paid fuel and food sales through its app with loyalty discounts.
“We’re doing our network assessments and working out which stores we do first, so we can move on with that as quickly as we possibly can,” Viva chief executive Scott Wyatt said. “Fast forward maybe 20 years and clearly any retail service stations that are completely reliant on selling fuel ... are going to find it difficult to survive.”
The deal is waiting on approval from the Australian Competition and Consumer Commission and Foreign Investment Review Board, expected by late September.
Viva Energy acquired the Coles Express retail convenience business in May. It covers more than 700 stores nationwide, but its bid to add OTR’s network of 205 company-owned and leasehold stores will boost its payroll to nearly 15,000 employees.
Wyatt said OTR’s sophisticated operation was an attractive model that generates about 70 per cent of its revenue from convenience sales, an inversion of Coles Express where convenience sales account for about 30 per cent.
“It will reshape the company,” he said. “It’s a massive shift for us. Selling hot food and running quick service restaurants and now service stations is something we haven’t done in the past. It’s all brand new for us. It’s very different from distributing and selling fuel.”
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