Woolies still trying to find servos exit
WOOLWORTHS chief Brad Banducci says the supermarket giant will work towards exiting its petrol station network via a sale or new share market listing despite penning a new supply deal with Caltex.
Caltex Australia – which will now use Woolworths to supply food to 700 of its standalone petrol stations – has also indicated it would not be interested in grabbing a stake in any float of the Woolworths petrol station network.
Woolworths yesterday announced it had signed a new 15-year supply deal with Caltex that will give motorists more places to earn the supermarket’s loyalty points and use its discount fuel vouchers.
Caltex, which already supplies Woolworths’ petrol business with fuel, will also introduce the supermarket giant’s Metro convenience store offering at up to 250 of its petrol stations, with 50 to be up and running within the next two years.
The new deal will hand Woolworths an $80 million-a -year earnings boost. Caltex had warned that losing the Woolworths fuel supply contract would tear a $150 milliona-year hole in its earnings.
The move by Woolworths to renew its arrangements with Caltex follows the competition watchdog indicating it would block a $1.8 billion sale of the supermarket giant’s 534 petrol stations to BP.
Mr Banducci yesterday said he remained convinced Woolworths was not the “natural owner” of a petrol station network and he would pursue a trade sale or initial public offering which would see the business listed on the stock exchange as a new company.
“We just think we’re not the natural owner and others who are more global or looking at the trends are much better placed to operate it,” Mr Banducci said.
“It still will be in partnership with us, so we think that there’s a lot of benefit there.”
Mr Banducci unveiled a new management team for the petrol business to “position it for growth”.
Woolworths corporate development director James Goth has been appointed chief executive while Fuel and Metro acting general manager has been appointed chief operating officer.
Under the new deal, motorists will be able to earn Woolworths reward loyalty points at more than 700 stand-alone Caltex sites for the first time.
Caltex sites will begin redeeming loyalty points on purchases within the next 12 months.
The change will allow Woolworths shoppers to earn reward points at about 1235 petrol stations.
Caltex has 810 petrol stations which provide a convenience offering, most under its Star Mart brand.
“This is very exciting,” Mr Segal said.
“The alliance with Woolworths will allow Caltex to provide a very competitive convenience retail offering to its customers, along with an expanded redemption and new loyalty offering.”