details of the deal with shell COLES MYER LTD. 2003-05-27...

details of the deal with shell COLES MYER LTD. 2003-05-27 ASX-SIGNAL-G
HOMEX - Melbourne
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HOW WILL THE ALLIANCE WORK

* The Alliance between Coles Myer Ltd (CML) and Shell involves a
wholly owned subsidiary of CML becoming the operator of Shell's core
retail property network of 584 service stations.

* CML will purchase the rights to operate Shell sites from multi site
franchisees for a total amount less than $100 million.

* It is planned to commence at more than 150 service stations in
Victoria in July 2003. Given a successful Victorian rollout, a
national rollout is expected to be completed by mid calendar 2004.

* The service stations will be co-branded Coles Express and Shell.

* The CML subsidiary will operate these service stations and directly
employ the service station staff under a newly established Petrol and
Convenience Store Division.

* CML will also introduce a fuel discount offer to its Coles, Bi-Lo
and Liquorland customers that will provide a cents per litre discount
off already competitive pump prices.

* Discounts will be offered to Coles, Bi-Lo and Liquorland customers.

* Both members of the Alliance have a shared interest in maintaining
competitive pump prices this is critical in driving sales.

Using its retail expertise, CML will continue to develop a quality
convenience store offer.

* CML will set fuel and shop prices at each of the service stations
it operates.

* Shell will be the exclusive fuel supplier and provide the service
station property.

HOW CUSTOMERS WILL BE THE WINNERS
When the Alliance is fully rolled out:

* Coles Myer customers will receive a cents per litre discount on
fuel purchased from Alliance sites. Discounts will be offered to
Coles, Bi-Lo and Liquorland customers.

* The discount will apply when customers pass a purchase threshold at
Coles, Bi-Lo and Liquorland and will be redeemable when they produce
their docket at an Alliance service station. (Note: the spend
threshold and the size of the discount may vary.)

* Alliance service stations will be conveniently located more than
80% of CML supermarkets (Coles and Bi-Lo) will be within 5km of an
Alliance site.

* Alliance customers will benefit from high quality Shell fuels
provided at already competitive pump prices from the conveniently
located national network of 584 service stations.

* The Alliance will provide a comprehensive national network so Coles
Myer's food and liquor customers have the opportunity to receive a
discount on fuel when they travel throughout Australia.

From day one of the Alliance:

* CML customers will have access to highly respected Shell fuel
brands including Shell Optimax at Alliance sites.

* Fly Buys customers will receive Fly Buys points at CML supermarkets
and for fuel and convenience stores purchases at Alliance sites.

* CML will use its retailing experience and economies of scale to
provide a quality convenience store offer.

* Customers will be able to continue to use their Shell Card at
Alliance sites. However, Shell Card customers will not be entitled to
receive the CML fuel discount as they already have a specially
contracted fuel price with Shell which recognises their significant
purchase volumes.


HOW GROCERY AND PETROL RETAILING COMPETITION WILL INCREASE

* The Alliance will be pro-competitive and extend the availability of
fuel discount offers to more consumers.

* Alliance service stations will continue to have competitive pump
prices which are viewed as critical to attracting and retaining
customers.

* A significant additional benefit to consumers is the fuel discount
offer which will be available to Coles, Bi-Lo and Liquorland
supermarket customers.

* Shell's wholesale fuel supply arrangements to other commercial
customers and independent retailers will be unaffected by the
Alliance.

* The Alliance will increase competition in the supermarket sector
now and in the future by allowing CML to respond directly to discount
fuel programs operated by other retailers.


THE NEW ALLIANCE NETWORK DETAILS
When the Alliance is fully rolled out:

* Accessibility for Coles Myer customers to the discount petrol offer
will be hard to match it is designed to be the largest and most
convenient discount fuel offer in Australia.

* More than 80% of CML supermarkets (Coles and Bi-Lo) will be within
5 kilometres of an Alliance site. Liquorland customers will also be
offered a discount.

Proposed Alliance site numbers are:

STATE COLES BI-LO ALLIANCE SERVICE
SUPERMARKETS SUPERMARKETS STATIONS
NSW (inc ACT) 143 67 183
NT 4 3 10
QLD 92 35 119
SA 35 40 37
TAS 14 15
VIC 112 48 158
WA 79 62
479 193 584


BACKGROUND ON COLES MYER AND SHELL

The Alliance participants are subsidiaries of Coles Myer Ltd and
Shell Australia Limited respectively.

COLES MYER LTD. (CML)

Coles Myer operates eight of Australia's favourite retail brands
across 1800 stores throughout Australia and New Zealand.

These include traditional department stores (Myer Grace Bros) and
discount department stores (Target and Kmart), supermarkets (Coles
and Bi-Lo), liquor retailing (Liquorland, Vintage Cellars and
Quaffers), office supplies (Officeworks, Viking), direct marketing
and electronic retail businesses.

CML, one of Australia's leading retail businesses, trace its origins
back to one of Australia's foremost retailers G J Coles (est
1914) and the Myer Emporium (est 1900). The two companies merged in
1985.

CML employs 164,000 people.

SHELL AUSTRALIA LIMITED

Shell Australia Limited is a wholly owned subsidiary of the Royal
Dutch/Shell Group of Companies. Shell has operated in Australia since
1901. It directly employs approximately 2200 people.

Shell operates an upstream oil and gas business, Shell Development
Australia Ltd, as well as a downstream oil products business. Shell's
oil products business includes:

* Refineries at Clyde (NSW) and Geelong (VIC) representing about 25%
of Australia's refining capacity;

* National storage and distribution facilities;

* Commercial marketing activities which supply petroleum products to
commercial end users and more than 1000 wholesalers and independent
retailers;

* A national property network of 584 company-owned or leased retail
service stations which are currently operated under franchise
agreements. It is these service stations that will be the subject of
the Alliance.

A copy of the full announcement, including Maps, is available in PDF
format on www.asx.com.au. Alternatively it is available for purchase
from ASX Customer Service on 1 300 300 279.