7-Eleven drops Metcash

Distributor Metcash has been unable to save its long-standing supply agreement with 7-Eleven, with Metcash’s chief executive saying the convenience store chain’s terms made the contract commercially unviable.

This is the second loss for the company in 18 months, after losing the Drakes distribution contract in South Australia.

Metcash loses 7-Eleven contract

Metcash shares plunged more than 10 per cent to $2.72 in the hour last week after the company told the ASX that 7-Eleven was walking away from the deal.

Metcash sells $800 million worth of goods into 7-Eleven stores each year, with the bulk of this low-value tobacco sales. The deal has been standing for more than a decade.

According to a report in The Sydney Morning Herald, Metcash chief executive Jeff Adams said the situation was “disappointing” but 7-Eleven was demanding seven-day delivery and fulfilment windows that were as tight as four hours and Metcash was guaranteed to lose money if it agreed to those terms.

Metcash signed a five-year deal with Drakes supermarkets in Queensland in June.

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