egolinews.com

Metcash Limited (MTS) has decided to axe its Campbells Cash & Carry (“CCC”) business as it struggles to compete with branded convenience stores such as 7 Eleven. Metcash said the company would set aside $15.4 million in restructure provisions.

“For this reason, normalised earnings guidance is maintained at 7-10% EPS growth over the 2009 year.

Under the plan, CCC will see shut down 8 warehouses and merge the remainder with the CWD division.

Metcash’s Campbells Wholesale business will still retain three profitable operating divisions including Campbells Wholesale (“CWD”), CStore Distribution (“CSD”) and Foodlink.

Commenting on the closure, CEO of Metcash, Andrew Reitzer, said that “although this is a painful action to have to take, especially having regard for the excellent staff we will be losing, it is a necessary action to ensure the ongoing health and vitality of the overall Campbells Wholesale business”.

At 1025 AEDT, Metcash shares were down 4c to $4.11.

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