Metcash signs deal to construct new South Australian DC

Metcash has signed a long-term lease with Charter Hall to facilitate the construction and leasing of a ‘best in class’ distribution centre (DC) at Gepps Cross in South Australia.

The 68,000 sqm centre will replace the company’s existing DC at Kidman Park and is expected to create operational efficiencies in South Australia and allow access to a wider range of products than is currently available in the region.

Construction is scheduled to be completed in mid-2020, when the company will transition its operations from the Kidman Park facility to Gepps Cross.

“This significant long-term investment for our independent retailers in South Australia reflects our continued focus on championing their success,” Metcash Group chief executive Jeff Adams said.

“Our retailer network will benefit from a greater range in grocery and perishables that will further underpin their ability to provide a quality, differentiated offer that is tailored to their local community.”

The company believes the new DC will also benefit local suppliers by providing a route to market for their products.

In August, Metcash outlined a five-year plan to investors focused on accelerating existing transformation initiatives and improving infrastructure to drive growth, while embedding a cost-saving mentality, across the business.

The plan was revealed just two months after the retailer announced a $149.5 million statutory loss for the 2018 financial year, largely due to a $352 million impairment booked when Drakes Supermarkets declined to sign on to the new distribution centre.

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