Woolworths then reported a $1.2 billion loss for the full year in August, amidst a slump in petrol and fuel sales.
Woolworths is selling 527 fuel convenience stores and 16 development sites to BP for $1.79 billion, knocking back a counter offer from Caltex. He added that Woolworths will use the $1.785 billion from the sale to strengthen the company's balance sheet and in its core business.
Of course, many consumers will be wondering what this deal means for Woolworths' generous fuel offer which has traditionally scratched 4 cents per litre off of fuel purchases after the customer spends a certain amount in Woolworths' supermarkets.
Apart from this, an improved convenience store offering is said to be developed though the partnership by the combination of Woolworth's expertise in grocery and BP's global know-how in developing convenience offerings. Those discounts will also be available at BP outlets, which Woolworths says means that there will be a convenient service station that accepts discount vouchers near 80% of its supermarkets (up from 75%).
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Woolworths customers will be able to redeem their rewards points at BP service stations, helping them save for Qantas airline tickets.
Firstly, Woolworths said that, until BP gains the necessary approvals from the ACCC and FIRB, there would be no changes to its existing fuel offer. "For our shareholders, once the Strategic Partnership is established, it will result in Woolworths having a larger platform for our redemption and reward program, as well as providing us with a unique opportunity to partner with and draw on BP's success in rolling out market-leading convenience food offers globally", Woolworths CEO Brad Banducci explained.
BP has previously struck deals with retailers including Marks & Spencer Plc in the United Kingdom and REWE in Germany.
The deal is expected to be completed no earlier than January 2, 2018. Caltex chief executive officer Julian Segal said in a statement that while the Sydney-based refiner and distributor is "disappointed that the successful fuel alliance will come to an end, it is important that we exercise financial discipline in pursuing growth".
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