Why Coles is getting out of the servo game
Welcome to a Friday edition of Unmade for those few people who remain at their desks on this unofficial (except for Victoria) long weekend.
You can support Unmade by becoming a paying member. You’ll get all our emails before anyone else, access to our paywalled content, and discounts on our forthcoming events (more on that soon).
In case you missed it during an otherwise slow week on the ASX, Coles dropped a big announcement on Tuesday.
The company is getting out of the fuel game, and the Coles Express brand will eventually disappear from the nation’s servos. In terms of scale, it’s one of the biggest shakeups of the retail sector that we’ve seen recently.
Topics
premium-tag
Unmade Substack
Unmade Substack
Interesting to see Coles make a complete exit via sale whereas Woolworths retained a financial stake in Endeavour Group post demerger – I guess WOW just loves those pokies!
Thanks for the comment Rich. I wonder whether Woolworths pragmatically had to stay invested in the Endeavour float at the time to give the financial market confidence, and whether it ends up staying invested
David Jones did try to replicate the M&S/Waitrose experience in servos (in association with BP) but that only lasted about a year. COVID probably didn’t help that “trial”, but I’m just not sure that sort of initiative can be successful in the Australian market. We don’t have the same “instant supermarket meal” culture here that the UK does, and now that Uber Eats and its fast food delivery friends are so ubiquitous I don’t think we ever will.
That’s a great point, Gavin. It probably wasn’t the best time for the trial. And in order to change behaviour, the offer has to be really great, and really consistently up there with the main brand.
I wonder whether the Uber Eats model will stick. I have a sneaking suspicion that as the VC money dries up and Uber & co have to charge a more realistic fee for the service, it becomes far less compelling for consumers. As a sample of one, I noticed my usage was rapidly falling away as the price became increasingly painful, particularly once I started to notice the artificially boosted menu prices (I’m surprised the ACCC hasn’t taken a look at that element yet).
Uber Eats isn’t a cheap way to eat these days for sure (if it ever was). It’s the “Service Fee” on top of the “Delivery Fee” that I question. Other than delivering the food, what “service” are Uber providing me that needs a separate/additional payment?