Viva Energy is pressing forward with its plan to reposition itself as more than just a fuel supplier, aiming to expand deeper into the convenience retail space. The move follows its $1.2 billion purchase of the OTR Group and will see existing Coles Express sites converted into On the Run outlets. These new-look stores are designed to offer a higher-end convenience experience, encouraging customers to visit more often and spend more while they’re there.

Big Changes, Tough Market

The company’s strategy comes at a time when its financial results have been under pressure. Viva reported a significant drop in half-year profit, with earnings from both retail and refining hit hard. Retail sales were down nearly 40 per cent, while refining earnings fell by more than 80 per cent. The Geelong refinery, a key part of Viva’s operations, is facing further challenges and is expected to record a loss in the coming months.

Despite this, Viva is staying focused on its growth plans. It has slightly scaled back the speed of its site conversions but remains confident it can deliver steady progress through 2025. The company believes that as economic conditions improve, especially with cost-of-living pressures easing and interest rates trending down, consumers will be more willing to spend on premium convenience offerings.

Industry Context

The challenges facing Viva reflect broader industry pressures. Refining margins have softened across the board, leading to calls from fuel companies for adjustments to government support measures such as the Fuel Security Services Payment. This program, introduced to safeguard Australia’s refining capacity, is being reviewed to ensure it provides enough protection when global margins weaken.

What It Means for Independent Operators

For ServoPro members, Viva’s strategy is worth watching. The shift shows how major fuel companies are leaning heavily into convenience retail to offset declines in fuel margins. Larger players are working hard to attract customers with food, coffee, and lifestyle products rather than relying solely on fuel sales.

Independent operators can take lessons from this: customers are increasingly expecting more than just petrol when they visit a site. While smaller retailers may not have the resources for large-scale refurbishments, even small improvements to product range, store layout, or customer experience can make a big difference.

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