Woolworths is expected to record a non-cash impairment charge of around $50m in relation to store and lease assets across 13 of its Metro Food Stores in FY21.
Ahead of its full year results announcement, Woolworths has completed a review of its Metro Food Stores network and has found that sales in key transit traffic locations such as CBDs, remain materially negatively impacted by COVID-19.
Woolworths Group CEO, Brad Banducci, said the Group remains committed to the rollout of Metro Food Stores and that the $50m impairment reflects a balanced view on the speed of recovery of CBD and transit customer movements and the likely impact of this on Metro stores.
“We remain committed to our convenience Metro Food Stores having refined our smaller format and range over a number of years. However, the changing customer work and shopping patterns we have seen over the last 15 months have negatively impacted some of our stores, particularly in CBD and transit locations, resulting in the impairment.
“Most Metro stores are in locations that have not been impacted by a reduction in customer foot traffic and continue to perform well, including new-look neighbourhood stores recently opened in suburban Sydney.”