What: Struggling supermarket supplier Metcash Limited (ASX: MTS) on Friday announced that the CEO of supermarkets, Fergus Collins, would leave the company after 13 years of service.
So What? Mr Collins' exit comes at a time when Metcash's supermarket division is struggling to keep up with rivals Woolworths Limited (ASX: WOW), Coles (owned by Wesfarmers Ltd (ASX: WES)), Costco, and Aldi.
Metcash's network of individually managed IGA stores are high-cost, low margin and losing market share to the expanding store network of its three largest competitors.
What Now? Metcash was once known for its reliable and huge dividend yield, convenient shopping hours, and solid management, but now faces many headwinds, not the least of which is its horribly outdated corporate logo.
Metcash's Group Chief Executive Officer, Ian Morrice, will take Mr Collins' position for now, with group management responsibilities falling to recently appointed CFO Brad Soller.
Metcash faces ongoing margin erosion and has no competitive advantage over its lower-cost and more popular rivals. We at the Motley Fool are always in search of companies that have maximum control over their industry and prices. Unfortunately Metcash is not one of them.
