The short answer
An independent supermarket or convenience store in Australia is usually priced as goodwill plus plant and equipment, with stock counted at settlement and paid for on top. Goodwill is a multiple of maintainable earnings: the profit left after wages, rent and a market wage for a working owner. We found no reliable published multiple. The banner agreement, lease, tobacco, shrinkage, wages and any fuel supply agreement move the number most.
How is the price of a supermarket or convenience store built?
The price has three parts: goodwill, plant and equipment, and stock at valuation (SAV). Goodwill is a multiple of maintainable earnings, plant and equipment is agreed in the contract, and stock is counted at settlement and paid for in addition. A South Australian legal guide says stock is paid for at settlement over and above the price of goodwill and plant.
The two must not be counted twice. Earnings already come from selling stock, so no multiple is applied to it. A price quoted for the whole business with a normal level of stock inside it must not have SAV added as well, or the buyer pays for the shelves twice.
What multiple do supermarkets and convenience stores sell for?
We found no reliable published multiple for independent supermarkets or convenience stores in Australia. Listing prices are asking prices, and we found no published dataset of completed sales.
The recent public price we found is for a group, not a store. On 19 October 2026 Metcash estimated $80 million to $85 million, excluding stock, employee entitlements and stamp duty, for 15 Queensland IGA supermarkets with about $264 million of unaudited retail sales in the year to 30 June 2026. That is about 0.30 to 0.32 times sales, by our arithmetic. It follows a fixed contract formula based on a multiple of EBITDA, so it is a weak guide to one store. Metcash expected completion by the end of April or early May 2027, subject to ACCC approval and lease assignments.
| Factor | Pushes the price up | Pushes the price down |
|---|---|---|
| Banner and wholesaler contract | Long term left; transfers as is | Short term; new terms; wholesaler's first right to buy |
| Lease | Term and options outlast payback | Short term; demolition clause |
| Tobacco | Small share of gross profit | Large share; vape or illicit stock |
| Shrinkage and wages | Low, steady loss; hours that pay their way | High or unrecorded loss; hours that lose money |
| Fuel supply agreement | Long term; reasonable consent to transfer | Short term; tied supply |
Do the banner agreement and the lease transfer with the store?
Not automatically: each agreement decides. A buyer reads both before agreeing a price. A contract with the wholesaler can carry a first right to buy: on 19 October 2026 Metcash announced it had exercised one, under existing contractual arrangements, when a 15-store IGA group decided to sell. The buyer asks for the banner agreement, its term, any first-rights clause and who approves a new owner. Metcash's 2026 annual report counts over 1,200 independent retailers under banners such as IGA and Foodland, and lists the operator of the FoodWorks network, Australian United Retailers, as a contract customer.
The sale contract should be conditional on the landlord approving the lease assignment. A South Australian legal guide says a landlord may reject an assignment on reasonable grounds; other states and the lease itself set their own rules. Rent is an expense in the valuation. Oliver Group values the business, not the land or building; a property valuer values freehold premises.
What have the vape ban and falling tobacco sales done to the price?
They have removed one profit line and made another less certain, so a buyer removes vape profit and tests tobacco profit separately. Since 1 July 2024 vapes must be supplied through a pharmacy; the Therapeutic Goods Administration says tobacconists, vape shops and convenience stores cannot supply any, with up to 7 years in jail per offence.
Metcash Food's tobacco sales fell a further 29 per cent in the year to 30 April 2026, and Metcash reports losing about $1.8 billion of tobacco sales since the 2021 financial year, largely to illicit trade. Its 2026 annual report also notes early signs of improvement where enforcement began, particularly in Queensland. A buyer separates tobacco profit and assumes neither a further fall nor a recovery.
NSW Health says the state began licensing tobacco sellers on 1 July 2025 and can close a premises for up to 90 days over sales without a licence or of illicit tobacco or vapes. Business Queensland says a Queensland smoking product licence cannot be transferred, so a buyer must obtain their own.
How does a fuel supply agreement change the price of a convenience store?
It decides what fuel earns the operator and for how long, so fuel and shop are valued separately, and its term and transfer terms weigh as much as the lease. Fuel also inflates turnover: in the 2024 to 2025 financial year the ABS shows fuel retailers spent 88 cents of each sales dollar on purchases of goods, so a buyer compares gross profit.
Where the Oil Code applies, for example to an agency arrangement in which the retailer sells fuel as the supplier's agent, the supplier must not unreasonably withhold consent to a transfer. The supplier is taken to consent if it does not give the retailer written notice, with reasons, within 42 days of a written request. A 'supply only' or 'supply and branding only' agreement with an owner-dealer would not meet the code's test of a substantial ongoing supplier role. The Federal Register lists the regulations as due to be repealed on 1 April 2027 unless remade.
How much do shrinkage, wages and opening hours take off earnings?
Enough to move the price, because margins are thin. Across food retailing the ABS reports wages and salaries of 10.9 per cent of sales and an operating profit before tax of 4.7 per cent in the 2024 to 2025 financial year. Griffith University's 2024 ANZ Retail Crime Study put retail crime losses across all retail at almost 2 per cent of turnover in the 2024 financial year. A buyer normalises shrinkage to a level the stocktakes support.
Shop staff are usually paid under the General Retail Industry Award 2020, which covers the retail sale of food. From 1 July 2026 an adult Retail Employee Level 1 earns at least $27.81 an hour. Ordinary hours cost 150 per cent on Sundays, 125 per cent on Saturdays and weekdays after 6 pm, and 225 per cent on public holidays, and casual rates add the 25 per cent loading. A buyer tests whether late and Sunday trading earns more than it costs. The award excludes motor vehicle fuel retailing, so a fuel site's staff may sit under another award. A seller should have ready:
- ·Stocktakes for two or more dates, with theft and wastage records
- ·Department sales and margins, tobacco separate
- ·Rosters and payroll by award classification
A worked example: from earnings to settlement
Illustration only: round made-up figures and an assumed multiple, not a benchmark. A supermarket sells $6,000,000 a year and, after wages and rent, earns $240,000 before any wage for its working owner. A manager would cost $100,000, so earnings are $140,000. Tobacco gross profit of $30,000 is expected to halve, so maintainable earnings are $125,000.
At 3 times, goodwill is $375,000. With plant and equipment agreed at $125,000, the price before stock is $500,000. The settlement count finds $320,000 of stock at cost, of which $20,000 is damaged or short-dated and excluded, so SAV is $300,000 and the buyer pays $800,000 in total. Adding SAV to a $500,000 price that already included a normal level of stock would pay for the stock twice.
When the number has consequences
A formal valuation is worth commissioning when the store's price, not just its stock, has to stand up to someone else: a sale or purchase, a partner or shareholder buyout, a restructure or related-party transfer, CGT events including the small business CGT concessions, or an estate. Every Oliver Group report is a signed valuation report with a concluded value and a supportable range, the method and evidence, assumptions and limitations, an independence statement and the signature of the valuer responsible.
Oliver Group prepares independent valuations only. We are not a tax agent and do not give tax, legal or financial advice: your accountant and lawyer apply the valuation in their own fields. Reports follow the guidelines of APES 225 Valuation Services, and a report is not written to a predetermined number.
Oliver Group's fees are set by the annual turnover of the business: a Small Business Valuation is $1,495 + GST for turnover under $2 million, a Medium Business Valuation is $2,495 + GST for turnover between $2 million and $3 million, a Large Business Valuation is $3,495 + GST for turnover between $3 million and $10 million, and above $10 million the fee is quoted in writing before work starts. A small-business report is delivered in 2 business days and a medium- or large-business report in 3 business days; above $10 million the delivery date is agreed before commencement. Delivery time starts once payment and all required information have been received. The fee is fixed in writing before work begins and never depends on the concluded value.