Metcash sheds 478 jobs in major company overhaul

Posted by AFN Staff Writers on 4th April 2012

Australian national grocery wholesaler, Metcash, which owns the Franklins chain of supermarkets, has announced plans to drastically restructure its business in response to difficult trading conditions and poor financial results.

Metcash said the changes would result in 478 jobs being shed from its Campbells, merchandising, and fresh food businesses.

In a media statement, the company said it will close 15 regional Campbells Cash & Carry branches. As a result 315 positions will become redundant in the Campbells business. The other 163 positions are being abolished from Metcash’s corporate offices.

Metcash CEO, Andrew Reitzer said, “This recognises the changing dynamic in the convenience sector as our mix of business swings more heavily towards the organised petrol and convenience sector and away from the accelerating decline of traditional convenience stores.”

Sale of Foodlink

As a results of its strategic review, Metcash has decided to sell its specialist food service, Foodlink, to Bidvest Australia. The terms of the sale agreement are confidential to the two parties at this stage.

Metcash said that the 90 staff currently employed by Foodlink will be offered employment by Bidvest as part of the sale agreement.

Queensland downturn hits two joint ventures

Metcash also announced changes to the Cornetts and Walters joint ventures following a jointly initiated review of their operations, which will see some unprofitable stores close.

Mr Reitzer said, “In view of the particularly difficult trading environment in Queensland we believe it is necessary for Metcash to take a prudent view of its exposures to these two joint ventures and will therefore book a largely non-cash impairment charge of approximately AU$75 – $90 million after tax.

“By taking this action now and assisting our joint venture partners to restructure their operations we believe these businesses will be in a much stronger position and better able to cope with the market conditions.”