This week, bp made a big splash by announcing it’s set to acquire X Convenience’s network of 52 outlets across South Australia and Western Australia. This move acknowledges the strong market position that X Convenience, under the Kosmidis family, has built since they started in 2006.

“The Kosmidis family has done an incredible job focusing on non-fuel convenience offerings, which really set them apart. They’ve grown to 50 stores in South Australia and just recently dipped their toes into the Western Australian market with two new sites in 2021”, said ACAPMA CEO Mark McKenzie.

Both bp and X Convenience have agreed on the terms, but there’s one hurdle left – the deal needs the green light from the Australian Competition and Consumer Commission (ACCC). This step is crucial, especially after the rigorous review the ACCC gave the Viva-OTR deal last year.

“On the surface, this deal looks positive for competition. It brings another well-resourced player into a market where Viva Energy and Chevron have a renewed presence,” Mark said.

“However, we expect the bp-X Convenience deal to face the same level of scrutiny as the Viva-OTR deal to ensure there’s no undesirable market concentration at the local level”, added Mark.

Viva Energy’s acquisition of OTR added about 200 sites to its network in South Australia, and Chevron entered the market by picking up 25 sites divested by Viva Energy. This backdrop makes BP’s move even more intriguing.

Losing the OTR network as a fuel supply channel was a driver for bp to acquire X Convenience, but bp also sees value in X Convenience’s larger sites and innovative convenience offerings.

Lisa Archbold, bp Australia’s Vice President of Business Development and Low Carbon Solutions, shared bp’s perspective. “This acquisition isn’t just about filling the gap from losing OTR. It’s about acquiring a fantastic network with a strong convenience brand that fits well with our strategy,” Lisa explained.

bp plans to replace Mobil as the fuel supplier for X Convenience, meaning customers will soon be able to use bp fuel cards at these outlets. The deal also includes in-store convenience brands like Coffee Station, Smokes Express, Burger X, and Down Dog N Shakes.  bp is also eyeing these larger sites as perfect spots to expand its electric vehicle charging network, with more than 120 bp Pulse charge points already rolled out nationwide.

Mark reflected on the broader market trends; “This deal, along with the recent Viva-OTR and 7-Eleven ownership changes, highlights the ongoing vibrancy and strategic shifts in the Australian fuel and convenience market”,

“It shows the economic value of investing in innovative convenience formats, a strategy available to all retailers regardless of size”, added Mark.

One question lingers, however: what’s next for Mobil? With bp taking over X Convenience, Mobil will likely need to strategize their next move to maintain their market presence.

In essence, bp’s acquisition of X Convenience is a strategic play that underscores the dynamic nature of the Australian fuel and convenience market. It’s a clear sign that innovation and strategic investments are key to staying competitive in this evolving landscape.