7-Eleven Australia will not be renewing its current supply agreement with Metcash following its conclusion on 12 August 2020.
According to an ASX announcement published by Metcash on Friday, they were “unable to reach an agreement with 7-Eleven on its supply requirements for the east coast, including delivery routes and scheduling”.
Metcash believed these requirements would lead to supply being “uneconomic” for its convenience business.
It’s convenience sales to 7-Eleven are worth around $800 million annually, which comprise predominantly lower-margin tobacco sales. Metcash says its will be assessing opportunities to help offset the future earnings impacted by Friday’s announcement.
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Metcash remains in discussions with 7-Eleven to continue supply in Western Australia, as well as a number of smaller categories on the east coast.
This all follows Drakes’ departure from Metcash after opening its own distribution centre in September.