Australian grocer Woolworths is considering selling its petrol station forecourt business in a move that could net it A$1.5bn (£890m).
The supermarket giant, which is the country’s top grocer by sales, is mulling over offers for the division as it continues to offload non-core businesses.
Similarly to steps taken by Tesco in the UK, Woolworths chief executive Brad Banducci has refocused the retailer on its supermarket operations amid a fierce price war with Aldi and Coles, which is owned by Wesfarmers.
In August, Woolworths said it was calling time on its Master’s hardware chain and writing off the losses.
The loss-making home improvement business, which was launched as a joint venture alongside US-based Lowe’s Companies, faced years of criticism from analysts prior to the decision.
Now Woolworths owner Caltex Australia has drafted in investment bank UBS to help secure a deal for its petrol forecourt business after admitting that it has received several “incomplete and conditional” offers for the 500-strong chain.
News of the potential sale sparked a hike in Woolworths share price, while analysts also welcomed the strategy.
Clime Asset Management senior equities analyst David Walker said: “We don’t think that Woolworths should be a retail conglomerate. We would like to see it as a clean liquor and supermarket business, performing competitively against Aldi and Coles.”
Woolworths investors have voiced concerns that it is losing grocery sales to the duo, after maintaining higher prices to offset the losses being made in its other businesses.
The potential sale also reflects the collapse in oil prices. During the summer, Woolworths blamed a 20% slump in petrol sales for its decline in group revenue and claimed the fall was sparked by tumbling global oil prices.