Coles offloads fuel business, selling Coles Express sites for $300m

Supermarket giant Coles will sell its fuel and convenience business to Viva Energy in a $300 million deal which will see it give up ownership of 710 Coles Express sites.

The retailer told the ASX on Wednesday morning it had entered into a binding agreement with Viva, which has been a long-term partner for the supermarket’s fuel network.

Coles was keen to highlight that the sale would not mean consumers lose out on long-running discounts and loyalty benefits, with shoppers still able to use 4 cent-off per litre fuel dockets across Coles Express sites. Viva Energy will also remain part of Coles’ Flybuys loyalty program, meaning customers will still be able to accumulate points.

The sale marks a transition in Coles’ focus away from convenience stores and petrol stations and back to its core grocery and liquor businesses.

“Viva is well-placed to make the most of opportunities to grow the Express business into the future, while we will strengthen our focus on our omnichannel supermarket and liquor businesses and our ambition of becoming Australia’s most sustainable supermarket group,” Coles boss Steven Cain said.

Coles Express sites generated sales of $1.13 billion in 2022 and earnings of $42 million.

Coles will net $300 million in proceeds from the sale and the agreement will also remove $816 million worth of leases from its balance sheet, with the company set to hand these over to Viva at the completion of the transaction.

The sale will depend on approval from Australia’s competition watchdog and the foreign investment review board.

The companies expect to complete the deal in the second half of this financial year.