Metcash shares tank after 7-Eleven walks away from $800m supply deal

Grocery distributor Metcash has been unable to salvage its supply agreement with convenience store chain 7-Eleven, with the deal set to end next year after Metcash said it couldn’t accommodate 7-Eleven’s delivery and route demands.

Metcash shares plunged by more than 10 per cent to $2.72 by 1:00pm on Friday in the hour after the company told the ASX that 7-Eleven was walking away from the deal. Metcash sells $800 million worth of goods into 7-Eleven stores each year, with the bulk of this low-value tobacco sales.

Negotiations between Metcash and 7-Eleven have broken down, leading to an end to its supply agreement. Credit:Glenn Hunt

Metcash has been supplying goods into 7-Eleven stores for more than a decade. Its share price suffered a dip in mid-October after reports suggesting the relationship could end as 7-Eleven looked to deal more directly with individual suppliers to source products along the east coast.

On Friday, the company told investors it was still negotiating with 7-Eleven to supply into Western Australia and for certain product categories on the east coast, but their main agreement would end in August 2020.


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