Metcash shares hit by lost 7-Eleven deal

Metcash shares have dropped more than 10 percent to a four-month low after 7-Eleven chose not to renew its contract with the wholesale food and beverage supplier when it expires in August.

Metcash on Friday said its annual sales to 7-Eleven total about $800 million a year, mostly in lower-margin tobacco products.

“Metcash was unable to reach an agreement with 7-Eleven on its supply requirements for the east coast, including delivery routes and scheduling,” the ASX-listed firm said.

However, Metcash said it was still in talks to continue to supply 7-Eleven stores in WA.

The blow is just the latest for Metcash, which in 2018 posted an impairment-driven loss of $149.5 million when Drakes Supermarkets declined to extend its SA contract after Metcash had announced plans to open a new purpose-built distribution center.

At 1306 AEDT, Metcash shares were down 10.5 percent to $2.72.