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Beaten down Retail Food Group Limited (ASX:RFG) cuts suppliers and products

According to an article in The Australian Financial Review, Retail Food Group Limited (ASX: RFG) has moved to cut its distributors from 16 to 2 – tendering its entire distribution business – worth between $100 million and $200 million a year.

The article reports the strategy is a method to cut costs and simplify the business for the benefit of struggling franchisees, with plans to reduce the number of products sold from 15,000 to 3000.

Retail Food Group’s share price has lost 91% of its value since this time last year, but the company’s debt position means it’s not really an attractive bargain for most.

Elsewhere in the food sector the likes of Domino’s Pizza Enterprises (ASX: DMP) has recovered well from its slump following February reporting season with its shares up 2.3% to $50.04 at the time of writing.

Collins Food Ltd (ASX: CKF) has been stuck in reverse since late last year with a short surge in share price off the back of its FY18 results presentation in late June, down 0.3% to $5.21 today.

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Motley Fool contributor Carin Pickworth has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Collins Foods Limited and Domino's Pizza Enterprises Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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