The COVID-19 pandemic and the resulting inflation have caused businesses to suffer significant losses. The pandemic has caused a decline in demand for goods and services, as well as a decrease in the availability of supplies. This has led to losses in revenues and an increase in costs.

Inflation has also made it more difficult for businesses to access credit and finance their operations. This has further exacerbated the losses suffered by businesses during the pandemic.

As a result of these losses, many businesses have been forced to make tough decisions. Many businesses have had to lay off staff, reduce salaries, or even close down altogether.

Such has been the case for Coles, which has recently announced that it made a tough decision to exit the fuel and convenience game to focus on its core businesses after suffering significant losses over the past year.

The company has sold its fuel and convenience business, Coles Express, to Viva Energy for $300 million.

Coles Express service stations are expected to rebrand after Viva Energy acquired the business for $300 million. Credit: news.com.au.​

It was reported that Coles Express' gross earnings decreased by 37 per cent for the 2022 fiscal year — a loss attributed to COVID lockdowns.

In its announcement, Coles stated that the current leases represented an $816 million liability on its balance sheet.

The company also confirmed that it will continue to supply all 710 Coles Express service stations even if they will be rebranded.

Coles will also keep its discounted fuel docket programme running, and Flybuys will keep working with Viva Energy.

The deal is awaiting ACCC approval and, if approved, is anticipated to be completed by mid-2023.

It was also said that over the next three years, all Coles branding will be removed from the current websites.

The acquisition will allow Viva to progress more quickly towards its goals of expanding the integrated fuel and convenience business, according to Viva CEO Scott Wyatt.

'While our customers continue to enjoy the excellent customer service provided by the dedicated Express team, the extensive product range in-store and the loyalty programs we know they love,' he said.

'We look forward to welcoming all of the Coles Express team members to Viva Energy once the transaction completes.'

Despite Coles' entry into the petroleum industry in 2003, CEO Steven Cain stated that the company had chosen to concentrate on its two main sources of income: groceries and liquor.

The current state of the economy is a delicate balancing act. On one hand, we are seeing the effects of inflation. On the other hand, we are still struggling to recover from the COVID pandemic.

Both businesses and consumers are adjusting to make ends meet. This means that we should anticipate more changes in the near future.

Having said that, do you think it's a smart move for Coles to sell its subsidiary company?

 

[Singomate]

It just means they will jack up the prices, you don't buy a business to lose money.

 

[Staffordshire Whippet]

Smoke and mirrors, and another excuse to eff around with the Flybuys rewards.

 

[Lee-Bee]

Coles lost money during lockdown??????

They were open every day. And made more money than usual because people started cooking again and were having all three meals at home.
Surely that profit could top up any losses from coles express during that time.
I think selling coles express was an offer too good to refuse and nothing to do with the pandemic.
Coles, like other businesses are about making a profit. It’s that simple.

 

[grays]

the 4c/l-off dockets are the only thing that keeps people going to the Shell/Coles partnered outlets, because their fuel is always 4c/l more expensive!

As another has said, it's smoke & mirrors exercising.

The independents keep the current big players on their toes, but look ahead 5 years, and the EV market will be stronger making this a smart move for Coles.