Drakes will leave Metcash
The AFR published more information about Drakes supermarkets walking away from Metcash. Drakes plan to set up their own distribution centre in South Australia and switch away from Metcash in mid-2019. Metcash downplayed the possibility of other large independent chains leaving, but we wonder whether Drakes will try to make their independent supply chain more viable by offering to act as a wholesaler for smaller independents? This would hurt Metcash even more. Drakes operates 50 supermarkets and turn over around $1 billion per annum. We have repetitively expressed concerns about the future of independent supermarkets operating under the IGA banner, due to increasing pressure from Aldi, Costco and soon Kaufland / Lidl.