VIVA ENERGY’S PLANS TO SUPERCHARGE COLES EXPRESS, OTR NETWORK

A revamped digital loyalty program and a rollout of electric vehicle (EV) charging stations across its expanding network are among plans being drawn up by Viva Energy as it looks to assert its dominance of Australia’s fuel and convenience sector.

The first step in shaking up the local industry came on Monday with completion of a $300m deal to take over Coles Express and its 700-plus sites.

A second acquisition of Adelaide-based OTR, currently being reviewed by the competition watchdog, would add more than 200 additional sites and a development pipeline of close to 100 more to Viva’s network

The plan is to use the geographic spread of the Coles Express chain as a platform to roll out the OTR brand and convenience offering, which dominates the South Australian market and has started to make early inroads in other states.

Most of the Coles Express sites will be rebranded to OTR over the next two years.

In November Viva’s former chief operating and financial officer Jevan Bouzo was appointed chief executive of the company’s newly formed convenience and mobility division, tasked with overseeing the integration of brands and growth of the retail network.

He said Coles Express loyalty programs, including the 4c/litre shopper dockets and Flybuys benefits, would continue following Viva’s acquisition, but would eventually be overhauled with a new customer offering.

“When you think about the Coles Express offer, it’s great, but the opportunity to really build that out and bring a differentiated offer like the OTR format to the rest of the country means that we’re really taking what I think is the best located network in the country, and we’re acquiring what I also think is the best ­convenience offer in the country, and putting the two together,” he said.

“I think one of the key opportunities that exists in the OTR business is the digital app and the digital presence that they’ve got. They’ve got some great take-up in their mobile app and they’re able to communicate with customers digitally.

“Likewise, we’ve digitised fuel dockets that you can redeem through the Flybuys app, and have a Shell card and Coles Express application as well – so we’re seeing a growing demand, like all businesses, for digital interaction and to be able to personalise ­offers.

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“The opportunity is to take the best of both and develop something customers haven’t yet seen.”

In addition to providing more exposure to the fast-growing convenience segment, the deal to take over the Coles Express network has also been described by Viva as an opportunity to invest further in new technologies including EV charging stations and hydrogen refuelling facilities.

Fuel operators including Coles Express and OTR have been slow in their development of EV charging infrastructure, with Viva having installed just half a dozen charging stations across its network and OTR even fewer.

However, with a growing number of electric vehicles requiring frequent charging and over a longer period than a combustion engine car, Mr Bouzo sees an opportunity for convenience-based service stations to capitalise on the trend by increasing their in-store sales.

For OTR, that includes more spending at its in-store franchises which include Subway, Guzman Y Gomez, Oporto and Krispy Kreme.

“When you think about the opportunity for EV charging, I think there’s a real place for fast charging in convenience and mobility stores,” Mr Bouzo said.

“When you think about the opportunity to sit at a site for 10, 15 or 20 minutes and fast charge your EV, you have much more of a focus on food-to-go, barista coffee, the opportunity to sit for a moment, have a rest, have a bite to eat.

“And an offer like the OTR offer really brings the best of that to customers.

“It’s been hard for us to take the leap on investing in a major way in EV infrastructure in the past because the offer at service stations, or many of our service stations, hasn’t necessarily supported it.

“So as we look to rollout a more full-format convenience offer to customers going forward, I think we’ll be able to do that in conjunction with an expansion of the way we think about our EV infrastructure as well.”

The ACCC is reviewing Viva’s $1.15bn bid to acquire OTR, and analysts have warned the combined group’s market power in South Australia could loom as a potential stumbling block.

However, Mr Bouzo said he was confident the deal would get over the line.

“We’ve done quite a lot of work on the regulatory approval process,” he said. “I won’t comment on any of the specifics, but we’re very confident that we’ll be able to find a satisfactory way through that with the regulator.”