Twenty per cent of the convenience store spending is done at petrol stations and Caltex boss Julian Segal wants to tilt the balance his way, by rolling out a new model to take a lock of the market.
Longer term the model makes plenty of sense because the petrol station we know today will clearly change in the decades ahead, with electric cars and driverless cars taking more of the market.
After a long study with Bain, Segal will roll out around 20 pilot stores early next year to test the market.
His new store will have up-market coffee, dry cleaning, freshly made food, be a parcel pick-up point and will sell the usual dry goods you can buy from the service station today.
Segal is at pains to say he is not competing with the supermarkets, which is a different sort of shopping experience, but that is exactly what he is doing because they are trying to get into the same game.
Caltex owns and operates 650 petrol sites around the country with a retail share of around 16 per cent but it sells petrol as a wholesaler to one-third of the market and there are some 1,800 Caltex sites around the country.
Most of these sites are already serviced by the company today so it’s not a huge leap to the new grab’n’go type store.
In round terms the big retailers have around 23 per cent each and BP around 14 per cent.
BP is supplied by Metcash.
These figures alone tell you Caltex’s move will put more pressure on the retailers because a new enlarged wholesaler will be born.
Woolworths is rumoured to be selling the 520 sites it owns and operates but it has yet to formally hand out the ‘for sale’ sign.
Segal will be a buyer of these stations at the right price.
Today’s first-half profit numbers were in line with estimates and its stock price was trading down slightly at $33.98 in lunchtime trade.
Segal didn’t dispute ACCC figures showing retail petrol margins averaged 11.5 cents last year. But he cautioned the regulator was cherrypicking the numbers to make its case.
He said the company had spent $2.5 billion in the last few years and needed to make some money to justify its spending.
He said the company sold 8 billion litres of fuel last year and made just three cents a litre on the petrol.
Extracted in full from The Australian.