Independent grocery group Metcash is set to finalise its first store swap in Western Australia with supermarket giant Coles.
Independent grocery group Metcash is set to finalise its first store swap in Western Australia with supermarket giant Coles.
The swap will be completed next week when Coles’ Northbridge site on Newcastle Street converts to a Supa IGA store. This follows conversion of the Supa IGA store at Cockburn Gateway shopping centre to a Coles outlet in October last year.
Metcash WA business development manager Rob Moran, whose company holds the IGA franchise and supplies the stores, said swapping stores occurred sometimes in the eastern states with both Coles and Woolworths, but this was the first time it had completed a deal in WA.
“Coles initially expressed a desire to get into (Cockburn Gateway). They put some opportunities to us within their network of stores they were prepared for us to consider as potential opportunities to do the swap,” Mr Moran said.
One of those stores, in Northbridge, piqued Metcash’s interest.
“This particular one we decided it was worthwhile pursuing. We like the location, we think it suits a good convenience-based community centre which we do very well in. We think it’s a great opportunity for us, basically,” Mr Moran said.
He said the deal for the large Cockburn Gateway store in exchange for the much smaller Northbridge store was not a straight swap, but declined to discuss what further arrangements may arise.
“It’s not as straightforward as just swapping sites,” Mr Moran said.
The Northbridge store is about 1,700 square metres while the Cockburn store is about 4,500sqm.
“There’s no agreement (for more stores) past Northbridge at this stage,” Mr Moran said.
The franchise for the Northbridge Supa IGA store has been acquired by Ian Vo, who runs another IGA store in Glendalough.
A Coles spokesperson said Coles regularly reviewed its store networks, which led it to approach Metcash with a proposal for the Cockburn Gateway store.
“We keep our store network under review to ensure that we have the right stores in the right locations for our customers. This deal was an opportunity for us to improve the offer for customers in the Cockburn Gateway Centre, which we have now been doing for more than a year,” the spokesman said.
Mr Moran said it swapping stores was not necessarily easier than establishing new ones because the deals still required a lot of work.
“If a store suits our model better we’ll consider it,” he said.
“It depends on a lot of circumstances; you’ve got to get ACCC approval so you can’t lessen competition, there’s no easy or set formula. Every opportunity or every discussion is treated on an individual basis.”
Coles will finish its last day at Northbridge on December 1, after which Supa IGA will move in, opening on December 6.
