Trevor Collett | Oct 1, 2016

Much like its failed Masters hardware chain, Woolworths looks set to retreat from its foray into the world of fuel retailing.

The 500-strong site list for Woolworths Plus is estimated to be worth $1.6 billion, but a downward spiral for much of Woolworths’ business ventures in recent years has seen sales fall more than 18 percent for the last financial year.

The combined sales figure from fuel and grocery retail is down more than 40 percent.

The business giant decided to go it alone from the start, building ill-advised ‘shoebox’ sized service stations in the hope customers would be driven (no pun intended) to its supermarkets instead for grocery items.

Woolworths built up an army of around 150 service stations, before rival Coles signed a well-concealed deal with Shell giving it access to around three times as many sites as Woolworths overnight.

The move by Coles forced Woolworths to sign a hasty deal with Caltex, and it is now Caltex that is a front-runner to buy the Woolworths sites.

"Woolworths remains in discussions with a number of interested parties," Woolworths said in a statement to the Australian Stock Exchange (ASX).

"No decision in relation to the future of the business has been made, and Woolworths wishes to advise that current discussions may not result in a transaction."

While Caltex is believed to be in the mix, a number of other parties have also reportedly expressed interest.

"We will also continue to explore low-risk adjacent business opportunities, based around our core capabilities of retailing, supply chain management, infrastructure services and product sourcing," Caltex chairman Greig Gailey said in a letter to shareholders.

Any deal is believed to have a clause attached to ensure Woolworths’ discount fuel docket scheme is maintained.

The supermarket giant only recently altered its Woolworths Rewards program to allow members to earn points from fuel purchases at its service stations.

With Masters hardware stores dragging the anchor and a costly procedure to wind up the chain, Woolworths lost more than $3 billion over the last financial year.

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