The building (especially housing and renovations) slowdown continues to grab leading retail chains. Shares in independent grocer (IGA) and hardware group (Mitre 10) Metcash have dipped 3% to a day’s low of $2.75 yesterday after the annual meeting was told that growth in the hardware division had slowed in the first quarter which ended July 31.
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.
Foodland Supermarkets, including multi-store owners Romeo’s and Chapley’s, has signed a new ten-year supply agreement with Metcash. The shares weakened when Drakes advised it would be pursuing its own distribution centre in South Australia.