Linfox founder Lindsay Fox might just save your local milk bar. Credit:Arsineh Houspian "As we see it, it's a very fragmented, inefficient supply chain and it can be done more effectively," Mr Fox said. "You potentially start with the convenience store stuff like the 7-Elevens, Shell is tied up with Coles and Woolworths is tied up with Caltex, we used to do the stuff for Mobil and Shell many years ago, very efficiently. "For us it's all about the speed, how quickly you can get the inventory from suppliers into point of sale." It's not clear how Linfox will structure its proposed operation, which would require buy-in from a large number of convenience outlets and suppliers to work, according to analysts, but based on Metcash's most recent convenience sale results, it's a lucrative slice of the pie.

Metcash's convenience sales grew 3.7 per cent to $774 million in the half-year to October 31, more than five times the rate of its food and grocery sales over the same period, which increased by 0.7 per cent, albeit to a much higher total of $4.5 billion. It appears Linfox is working to a horizon that sits beyond the dominance of Coles, Woolworths and even Aldi to the arrival of newcomers such as Lidl and the impact this will have on retail in Australia. "Don't under-estimate the potential for another Aldi to come to town ... I'm not sure there's room, this is typically the land of duopolies," Mr Fox said "If Lidl comes to town, whose share are they going to eat?" For us it's all about the speed, how quickly you can get the inventory from suppliers into point of sale. Peter Fox

It's understood one of the biggest impediments to the roll-out of Aldi in Australia has been the logistics support required to supply new stores in locations away from the densely populated east coast. Lidl has already engaged with the Victorian government and it's also believed to have reached out to suppliers, despite denying any plans to launch in Australia. One grocery supplier confirmed he had already engaged with Linfox but he would only talk on an anonymous basis, for fear of jeopardising his relationship with Coles, Woolworths and Metcash. He said the proposed business would go head to head with Metcash and he said Linfox had already reached out to a number of suppliers regarding the plan. Independent retailers are also aware of the Linfox plan but there's some scepticism about whether the logistics behemoth could make it work in what is a highly competitive industry under increasing pressure from the majors as well as the ascendent discount operators like Aldi.

One experienced retailer said he had seen a number of these proposals over the years and most of them never made it much further than the proposal stage. ​"Distribution is the hard yards in grocery because we're such a big country, with such a small population," he said. However, convenience grocery shopping is a serious growth target for all the big-name retail chains, as busy shoppers do smaller, more frequent shops. Convenience store sales through the Wesfarmers-owned Coles Express grew 12.9 per cent in the third quarter, excluding petrol, and comparable store sales increased 8.1 per cent, compared to 5.2 per cent growth in the third quarter of 2015.

Woolworths' investment in smaller-format supermarkets, often in busy inner-city precincts shows the appetite to clip the ticket on this business, according to one retail analyst. He said if Linfox could tie together a number of supply contracts from the likes of BP, Mobil and 7-Eleven it could create the basis for an interesting business. "BP was a business that I know Metcash was trying to win some contracts from, so there are opportunities out there in convenience," he said, "it's all about accessing customers that are time poor and it's a growing theme."