Metcash unveils aggressive plans to grow IGA chain

Grocery wholesaler Metcash has announced aggressive plans to expand its IGA chain of independent supermarkets by 65 stores in 2010, with 225 stores set to be added by 2012.

The expansion plans were announced yesterday as part of a new agreement between Metcash and its 1,270 independent grocers that will see the grocers get a bigger slice of the profits from expansion and growth projects.

Metcash expects the program of new store openings, refurbishments and what it calls “brand compliance” will result in $10-20 million of extra profit over the next three years.

The new deal was struck at Metcash’s annual conference on the Gold Coast this week.

Metcash chief executive Andrew Reitzer says the company has also targetted $110 million in cost savings over the next three years.

“We are working very closely with our retailers to achieve aggressive growth targets during tough times and believe our interest are perfectly aligned with IGA owners, who should share the rewards of our market-leading supply system,” Reitzer said in a statement.

Metcash claims 19% of the grocery market and says Coles and Woolworths have 80%.