Also called mixed businesses, convenience stores were traditionally located within walking distance of their customers, often in residential streets. They sold groceries, confectionery, dairy goods, newspapers and tobacco products. Some also had small lending libraries. As chain grocery stores grew in the 1920s, convenience stores became mixed businesses and milk bars. Until milk and confectionery wholesalers were prepared to supply their goods to grocers (1969), convenience stores/milk bars/mixed businesses had a strong presence in Melbourne's retailing.
In 1977 Melbourne's first 7-Eleven convenience store was opened in Warrigal Road, Oakleigh, by a family involved in a grocery group-buying scheme. Independent convenience stores were disadvantaged, not having access to the lower wholesale prices enjoyed by supermarket chains or group-buying schemes. Within a decade petrol retailers took up the convenience store concept. Retail margins on petrol were modest, and some convenience stores were installing petrol bowsers. The petrol-station/convenience-store concept was further extended with take-away food, automatic teller machines and car washes.
Most convenience stores are run by franchisees. In 1992 the establishment cost of a Melbourne convenience store was $2 million. Petrol gave a 3.3% retail profit margin and other merchandise a 30.5% margin. In 1997 metropolitan Melbourne had 12 Ampol Road Pantries and 18 BP Express stores. In 2004 there were 23 7-Eleven stores in the CBD, a response to the market offered by city residents.