Grocery wholesaler Metcash Ltd
(ASX:MTS) has announced it will close nearly half of its Campbells Cash & Carry warehouses and merge the division into the Campbells Wholesale unit.
The company will close eight of the division’s 20 warehouses in response to the global decline of the traditional cash and carry wholesale market.
The rationalisation is expected to add $4 to $5 million in earnings before interest and tax per year to the business.
The company says unbranded convenience stores are no longer able to compete with modern organised formats like 7 Eleven.
The cost of the restructuring is likely to be $10.8 million after tax and the company will take a restructure provision of $15.4 million as a non-recurring item for the year ended April 30, 2010.
Metcash reported a profit of $202.5 million for the 12 months to April 30, 2009.
