Major retail supplier, Metcash has had a good crisis - the surge in consumer panic buying pushed up sales in its key grocery supply business with the IGA chain of supermarkets (but not as much of a boost for its liquor and hardware divisions).
Investors have paid no heed to partial figures from the ABS yesterday showing a 0.4% rise in seasonally adjusted retail sales in February. The rise came from the supermarket sector as other parts of retail, particularly associated with tourism or hospitality, are likely to plummet.
Metcash has confirmed the loss of one of its largest customers, 7-Eleven. While the $800m in wholesale sales is much larger than that of the Drakes contract loss, Citi calculates a similar earnings impact.
Metcash is refining its strategy and will spend $300m for growth across FY20-24. Management has signalled a 15% minimum return hurdle and, if this is not achieved, expenditure will slow and capital management resume.