Regional petrol and convenience stations in Australia sit at the edge of the country’s population and infrastructure. They serve smaller towns, remote communities and tourism corridors where distances are long, supply chains are stretched, and customer needs can vary widely.
Running a service station outside the cities means higher costs, tighter margins and a much bigger role in daily life.
– Thomas Oakley-Newell
While metro sites benefit from scale and frequent deliveries, regional operators must manage higher costs, limited labour pools and less predictable demand, all while still acting as essential local services.
The cost of distance
One of the biggest challenges for regional sites is the cost of getting products to store. Freight, in particular, stands out as a major pressure.
“Freight is consistently one of the biggest cost pressures in regional and remote locations, particularly given distance, lower drop densities and rising transport costs,” said Sharon White, Head of Sales and Marketing at Lowes Petroleum. She also noted that regional operators often have less ability to spread costs across large volumes.
“Unlike metropolitan sites, regional operators often have fewer opportunities to offset these increases through scale or higher volumes.”
Labour is another key cost. Smaller teams mean each role matters, and it can be harder to find and keep staff. Utilities and compliance costs have also increased, adding further pressure.
In remote environments, the challenge can be even greater. Adrian Lorenzin, Senior Director Supply Management, Tech and Services at Sodexo explained that many of their sites are far from distribution centres.
“Most of our sites are around 1,500 kilometres from the nearest distribution point, so transport costs are significantly higher.”
Because deliveries are less frequent, operators must also carry more stock. This creates a balancing act: too much stock leads to waste, while too little risks missed sales. Managing inventory becomes a core daily task rather than something handled occasionally.
Labour and staffing challenges
Finding and keeping staff is a consistent issue across regional locations. Unlike cities, where there is a larger pool of workers, regional towns often have limited hiring options.
White said labour pressure goes beyond wages. It includes availability and retention, particularly in smaller teams where every staff member plays an important role.
At remote sites, staffing models are often structured differently. Lorenzin described how Sodexo uses roster-based systems rather than casual staff. These rosters typically involve extended periods on site followed by time off, which helps make remote work more practical but also increases labour costs per hour.
Recruitment can also be difficult because the lifestyle does not suit everyone.
“There’s natural attrition, particularly in the first three months, when people realise the lifestyle isn’t what they expected,” Lorenzin said.
To address this, operators focus on onboarding and support. Training programs, clear expectations before arrival and on-site support systems help new employees adjust. Culture also plays a key role in retention. When teams feel supported and connected, they are more likely to stay.
Local hiring is also common in regional retail sites such as those operated by Shell Reddy Express, where staff often live in the same community as customers.
“Recruitment and retention can be challenging in regional areas, particularly in smaller towns with less residents who may be looking for work, however the majority of our team members live locally, so they can build trust and support with job seekers. We invest in training and upskilling, and we promote from within wherever possible,” a Shell Reddy Express spokesperson said.
A role in the community
In regional Australia, petrol stations often act as more than just places to refuel. They can become informal community hubs, especially in towns with limited retail options.
White described how these sites often provide a range of services beyond fuel.
“It’s often a key access point for essentials – from groceries and foodservice through to parcel collection, local information and a safe, well-lit place to stop.”
Shell Reddy Express said that being part of the local community is hugely important for their regional Shell Reddy Express, OTR, Liberty and Dealer Operator sites.
“They provide employment for locals, sell fuel and household staples like coffee, milk, bread and groceries. Most importantly, they engage with locals, building relationships and being involved in their own region. Running a regional site is incredibly rewarding because of the relationships you build and the role you play in keeping local towns moving.”
In many cases, they are also among the few businesses that remain open during disruptions. Whether due to weather events, supply chain issues or emergencies, these sites can play a critical role in keeping communities supplied.
Lorenzin described a similar function in Sodexo’s remote communities, where retail is part of a broader offering that includes food services and shared spaces. The aim is to provide everyday services that people would normally access at home.
“That’s where innovation comes in. Whether it’s delivery, technology, or expanded services, the goal is to improve quality of life for people working in remote environments.”
It’s often a key access point for essentials – from groceries and foodservice through to parcel collection, local information and a safe, well-lit place to stop.
– Sharon White, Head of Sales and Marketing, Lowes Petroleum
The Shell Reddy Express spokesperson says that they always try to tailor their offerings to customer missions, however, they do stock slightly different products in some sites.
“For example, some Shell Reddy Express sites on the coast stock fishing supplies. Our teams work with suppliers to make sure we’re providing the products and services our customers need.”
This kind of tailoring helps ensure the store remains relevant to its community rather than following a one-size-fits-all model.
Demand swings and changing habits
Regional petrol and convenience sites must also deal with fluctuations in demand. Seasonal tourism is a major factor in some locations, while others experience more stable but lower volumes year-round.
White said tourism can lift sales during peak periods, particularly in towns that see increased visitors during holidays.
“Peak periods often deliver higher fuel volumes and stronger convenience spend,” she said. However, these gains must be balanced against higher costs such as extended trading hours, additional labour and increased freight.
Shell Reddy Express agreed that these peak periods create higher demand for fuel, and also coffee and food to go, sometimes offsetting quieter trading periods.
“Profitability depends on strong supply chains, accurate forecasting and planning to ensure the right stock and eliminating wastage wherever possible. Our supply and operations teams plan well ahead to ensure regional sites are adequately resourced during these peaks.”
Planning is key. Operators need to prepare well in advance to ensure they have enough stock and staff during busy periods, while also maintaining efficiency during quieter times.
Supply chain disruptions can have a bigger impact in regional areas compared to cities. In metropolitan areas, stock can often be replenished quickly. In regional areas, deliveries may only occur weekly, and delays can be harder to manage.
Lorenzin noted that weather events such as floods and road closures can disrupt access to sites for extended periods.
“Flooding and road closures can cut off sites for weeks,” he said. These disruptions require operators to hold extra inventory and plan for contingencies.
Most of our sites are around 1,500 kilometres from the nearest distribution point, so transport costs are significantly higher.
– Adrian Lorenzin, Senior Director Supply Management, Tech and Services, Sodexo
Because of these limitations, some products, particularly fresh food, are handled differently. At Sodexo sites, food is often prepared on-site rather than transported long distances. This helps maintain quality but requires more labour and kitchen infrastructure.
Consumer behaviour is also shifting. Cost-of-living pressures are influencing how people spend, with customers becoming more price aware.
White said fuel is a non-discretionary purchase, meaning even small price changes are noticed. At the same time, regional customers tend to value fairness and consistency.
“They understand the realities of operating in regional areas, but they expect operators to do what they can to remain competitive. For us, that means balancing price with service, reliability and community presence – recognising that trust and long term relationships matter just as much as the number on the price board.”
Operators are responding by offering a range of products at different price points, allowing customers to choose based on their budget while still accessing essential goods.
An essential service
Regional petrol and convenience stations operate under conditions that are very different from those in major cities. Distance affects cost, staffing is more complex, and supply chains are less flexible.
At the same time, these sites play a wider role in their communities, providing essential goods, local jobs and, in many cases, a sense of connection in places where options are limited. Balancing these demands requires careful planning, local adaptation and a focus on both efficiency and service.