Australian grocery distribution and marketing firm Metcash has entered into a long-term lease agreement with Charter Hall to establish a new distribution centre (DC) at Gepps Cross in South Australia.

The deal follows Metcash’s recently signed long-term supply agreement with Foodland Supermarket to supply groceries to Foodland supermarkets across South Australia.

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As part of the agreement, Metcash will supply groceries from its new distribution centre in South Australia for a period of ten years.

The agreement is conditional on Metcash entering a lease agreement for the new distribution centre before 21 December.

“This significant long-term investment for our independent retailers in South Australia reflects our continued focus on championing their success.”

Located in a 68,000m² of space, the distribution facility is expected to offer operational efficiencies for the company’s independent retailer network in South Australia.

It will also replace Metcash’s existing DC at Kidman Park, and provide access to a wider range of products as well as benefit local suppliers to market their products.

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In addition, the facility will serve as the distribution centre for the retailer’s Australian Liquor Marketers operation in South Australia.

Metcash Group CEO Jeff Adams said: “This significant long-term investment for our independent retailers in South Australia reflects our continued focus on championing their success.

“Our retailer network will benefit from a greater range in grocery and perishables that will further underpin their ability to provide a quality, differentiated offer that is tailored to their local community.

“Our independent retailers already include some of the best stores in the world, and we expect today’s announcement will further strengthen the foundation for continued investment in the network.”

The retailer expects to complete the construction of Gepps Cross facility in mid-2020, following which, the company will transition to the new centre.