A week ago, Metcash (MTS) was telling the market that while it was close to finishing a wide ranging review of the company, investors would be briefed on the proposed changes at an update day in March of next year.
Yesterday the company’s CEO Ian Morrice, who started the review, revealed that the company will be separating its grocery distribution (IGA) and convenience businesses (the old Campbells Cash and Carry), just two years after merging them.
Mr Morrice, who announced the strategic review soon after taking the helm last June, said the split would make the turnaround of the supermarkets business easier and enable the company to focus on growth opportunities in the convenience business.
Coles and Woolworths, plus Seven Eleven are battling for dominance in the convenience business, along with smaller players from within Australia and offshore (such as India). Coles and Woolworths supply their own stores, but the opportunity is there for Metcash to lift its game in this sector.
“To provide a greater turnaround platform for our supermarkets business and optimise the growth opportunities identified in the convenience channel, we have decided that the Metcash food and grocery pillar will be run in two divisions, each led by a separate CEO,” Morrice said in a statement to the ASX.
Metcash shares rose 4.3% to close at $3.15 yesterday in the weaker wider market which fell 0.7%.
“As a result of the change, the position of Chief Operating Officer, Food & Grocery, will be disestablished and Silvestro Morabito will leave the company effective 20 December 2013 to pursue other opportunities.
"Fergus Collins, currently the CEO of ALM will take on the role of CEO Supermarkets and Scott Marshall, currently General Manager of Merchandise & Marketing at ALM (the company’s liquor marketing group) will take over the role of CEO ALM. The new CEO Convenience will be appointed in the near future," Mr Morrice said in yesterday’s statement.
