EXCLUSIVE:Metcash Splash Big Cash To Hire CE Buyers
Metcash are splashing the cash in an effort to expand their consumer electronics and appliance offerings.
Headed by Ian Morrice a former Dixons executive in the UK Metcash has been forking out big dollars for CE and appliance buyers, with the company offering salaries and incentive packages to Big W and Aldi buyers in excess of $400,000 a year.
According to sources the Company is paying “over the top” packages to secure experienced buyers.
The Company is believed to be looking to take on Aldi and Big W who are making a resurgence in the CE market.
The CE and appliance products will be sold via the Companies Hardware stores and alongside food in the supermarkets.
ChannelNews has been told that the group recently secured the services of a former Big W TV and Audio products buyer as well as a senior Aldi buyer.
One senior executive said “They are offering salary packages up to 30 to 40% above the going rate for a senior buyer, they would not be doing this unless they have a strategy in mind”.
The CEO of Metcash has a wealth of CE and appliance experience having worked his way through the ranks at Dixons, moved to variety retailer Woolworths, where he became director of merchandise and director of retail stores and property, and had a stint running British hardware chain B&Q, where he opened big-box home improvement centres across the UK.
According to the Financial Review since Morrice took the helm of Metcash in July 2013, Metcash has invested more than $150 million into cutting grocery prices and helping independent retailers improve their stores to lure shoppers from Woolworths, Coles, Aldi and Costco.
Insiders are saying that the Company plans to take Aldi and several Companies selling house brand CE and appliance products “head on”.
The investment has taken a toll on Metcash’s earnings _ food and grocery wholesaling profits have fallen from $293 million in 2014 to $180 million in 2016 and margins have halved.
Comparable store sales in IGA supermarkets rose 1.4 per cent in 2016, twice the rate of growth in 2015. Retailers who refurbished stores enjoyed a 16 per cent increase in sales.
Similar customer-led strategies are in place in hardware, where Mitre 10’s Sapphire store program is delivering a 15 to 20 per cent sales uplift in participating stores.
The AFR said that after losing confidence in Metcash in recent years, investors and analysts appear to be buying into the turnaround story in food and grocery and have backed Morrice’s plan to diversify earnings by building a stronger third pillar in hardware through the merger of Woolworths’ Home Timber and Hardware and Mitre 10.
Metcash shares have risen 32 per cent this year to $2.12, above the $2 a share at which it raised $80 million last month to part-fund the $165 million Home Timber & Hardware acquisition.