Gas stations in Australia are undergoing a transformation, with companies like Ampol leading the charge to expand their convenience retail offerings and diversify profit streams beyond traditional fuels.
Industry Trends
Major players such as Ampol, Viva Energy, and Chevron have been actively acquiring and upgrading gas stations to provide a wider array of products and services. These include groceries, takeaway food, and even fast-food restaurants on site. By increasing their footprint, companies can also leverage economies of scale to negotiate better deals with suppliers.
Recent Developments
Viva Energy recently received regulatory approval for the acquisition of OTR Group, a deal that involved selling 25 stores in South Australia to Chevron. The move was part of Viva Energy's strategy to reduce reliance on income from fuel sales. Similarly, Ampol has been making moves to bolster its market share, including the acquisition of Z Energy in New Zealand in 2022.
Financial Performance
Despite inflationary pressures, Ampol reported a 2.1% increase in earnings before interest and tax from its Convenience Retail business, reaching 355 million Australian dollars (US$231.9 million) in 2023. This highlights the success of their strategic expansion efforts in the retail sector.
Gas stations in Australia are no longer just pit stops for fuel – they are evolving into vibrant hubs of convenience and variety, ensuring sustainable growth and profitability for companies in the industry.
Industry Evolution Fuels Ampol's Expansion Strategy
"In the ever-evolving industry landscape, we anticipate more consolidation," shared Matt Halliday, Ampol's chief executive.
Fueling Growth in Convenience Retail
Ampol is actively rebranding its stores to Foodary as part of its strategy to enhance its Convenience Retail division. The recent extension of a fast-food restaurant trial with Hungry Jack's at select gas stations is a testament to this approach. Moreover, the company is eyeing expansion on online delivery platforms like Uber Eats and DoorDash.
Embracing Electric Vehicles
Looking towards the future, Halliday predicts that the rise in electric vehicles will drive the need for more gas stations. The push for creating a dense network of fast-charging points is on the horizon, presenting ample opportunities for companies in this space.
On-the-Go Charging Network Expansion
Ampol has ambitious plans to bolster its on-the-go charging network, aiming for 300 bays in Australia and 150 bays in New Zealand by the year's end. These bays will not only cater to electric vehicle owners charging up but also boost their Convenience Retail business as motorists engage in shopping activities during the wait.
"In this realm, we possess a competitive edge," highlighted Halliday. "It's crucial to bridge the gap between infrastructure and the increasing adoption of electric vehicles."
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