Australian retailer Coles Myer has jumped on the petrol bandwagon, announcing a convenience store and fuel alliance with Royal Dutch/Shell.

Coles is buying the right to run 584 Shell sites for under A$100m (US$66m). The deal will see Coles pay Shell rent and buy its fuel from Shell. It is expected to boost annual sales by about 12%, contributing more than $3bn in additional annual sales when completed.

Coles CEO John Fletcher said that 584 sites was just a starting point and it was likely that new supermarkets may be built with Shell stations attached. The sites will be co-branded with both Shell and Coles signs.

The stock market responded positively to the news, rising 3% in a softer market to its best price in more than three weeks.

Coles Myer’s deal with Shell Australia is expected to trigger a fuel price war with Woolworths, which offers its customers a 4 cents discount on fuel if they spend at least $30 at its stores across Australia.

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By GlobalData