$12 roast chooks coming to servos
DAVID Jones is bringing its food hall experience to service stations across the country as part of a major tie-up with BP, offering motorists more than 350 products including rotisserie chickens, pre-prepared meals, sushi and sandwiches as well as fresh produce and long-life groceries.
The deal, the commercial terms of which have not been disclosed, will see five BP locations in Sydney and five in Melbourne converted into swanky new David Jones-branded mini-markets over the next six months.
Additional sites will follow - there are around 1400 BP-branded service stations in Australia, 350 of which are company-owned. BP has similar tie-ups in more than half a dozen other countries, most notably with high-end UK department store Marks & Spencer, famed for its ready meals and gourmet sandwiches.
David Jones, whose South African owner Woolworths Holdings recently declared Australia was in a "retail recession" as it wrote down the value of the chain by $437 million, has pinned its hopes on growing food revenue.
"We are investing in different parts of the business to set ourselves up for the future, and food is one of those areas," said David Jones Food managing director Pieter de Wet, who conceded that "historically" its food halls weren't in the most convenient locations.
"BP's got a customer base that really overlaps with David Jones. What this partnership brings to customers is an opportunity to have our brand easily accessible. To build a sustainable food business takes a lot of time, therefore this partnership was appealing to us. It gets our brand out there. It's a key aspect of how we're going to grow our business going forward."
Unlike the Coles Express partnership with Shell, Mr de Wet said David Jones at BP would be "quite a different offering to what's out there in the market", with the bulk being short shelf-life, fresh food products.
"Other retailers, quite often you'll find a ready meal has a shelf life of 30 days," he said. "Ours have a shelf-life of four to five days (because they have) no preservatives. It's quite a diverse range, from free-range rotisserie chicken, which you don't see anywhere else, all the way through to ready meals, a full range of groceries and quite a focus on healthy snacking."
But he stressed that the focus would be on "not pricing in a way that excludes customers". Mr de Wet said bringing rotisserie chickens, one of David Jones' top-selling products, to service stations "speaks to the fact that service stations worldwide have evolved into a place where you don't only buy food for now but also for later".
"There's no reason why the Australian consumer would not behave in the same way," he said. "Rotisserie chicken we find is the cornerstone of shifting the customer to food for later. We've (spent) a number of years making sure our chicken is the best in the market, and therefore it's actually quite a key aspect."
Brooke Miller, BP Australia vice president sales and marketing, said the two "iconic brands" were coming together to create "new centres of convenience" aimed at "changing the way Australian consumers shop for food".
"BP has a really large vision for transforming convenience retailing in Australia," she said. "Over the next six months we'll be putting down 10 sites in strategically located, highly accessible sites. We'll trial a range of different formats."
Ms Miller said the new stores would draw on "the best of each partner", with BP's Wild Bean cafe and its core range of drinks and snacks remaining. Customers will still be able to use the BPme app or a self-serve kiosk to beat the queue.
Queensland University of Technology marketing professor Dr Gary Mortimer said the deal was "smart" as it appeared to be targeting a more affluent consumer, less sensitive to rising petrol prices.
"Look at the Coles Express results last week, it was a disaster," he said. "As a result of high fuel prices people simply didn't go there and they saw a decline in sales. If you're targeting a higher disposable income, you're somewhat insulated from high fuel prices. If you're filling up your BMW, you don't care if the prices is 20 or 30 cents higher."