Our Proud History
The late Joe David, a progressive and visionary thinker, founded Davids, the predecessor business to Metcash. Joe David, the second son of Lebanese migrants, was born in 1903 at Wickham near Newcastle, New South Wales. In 1927, at the age of 24, Joe moved to Sydney.
On 17 May 1927, Joe David opened his first ‘food' store at Woolloomooloo, NSW. Following the success of the first store he opened another six stores.
As the businesses prospered, Joe saw the need to expand even further and in 1935, he opened a wholesale warehouse in Surry Hills, NSW. Over the next 20 years, the David family built on their early success and continued to grow their operations, catering for the increasing Australian population.
Joe David (1920s)
First Store (1920s)
Davids' Truck (1950s)
Modernisation, Expansion into Liquor and forming the Voluntary Independent Retail Group
From 1955 to 1968, Davids (as the company was then called), embarked on rapid modernisation and expansion culminating in its first foray into liquor wholesaling.
Davids installed the first punch card computer in the wholesale grocery industry in Australia in 1955. That same year, operations were relocated to Homebush, NSW. At the Homebush facility, Davids introduced new equipment and techniques including: forklifts, pallets, flow racking and "cargon" truck loading. Additionally, the first Cash and Carry branch opened in Homebush, NSW.
During this period Davids formed the first professionally organised voluntary retail group in NSW involving Supa Valu and Foodland (1963). The industry's first Retail Services Program for independent retailers was also introduced.
In 1968 Davids purchased Harbottle Brown & Co Pty Limited, a liquor wholesaler, which was founded in 1817.
By the early 1970s, the Homebush facility had outlived its usefulness. With considerably larger operations, the business relocated its warehousing operations in 1972 to an automated facility in Blacktown, NSW. Davids remained at the forefront of technological improvements introducing a number of innovations to Australia: electronic data interface for retailer ordering; case labels; retail shelf labels and other systems.
Foundations for the Modern Corporate - Growth by Acquisition
The 1980s and early 1990s saw Davids grow to a large private company, the basis of a modern corporate.
In 1980, Davids acquired AG Campbell, another grocery business. Davids continued to invest in technology to meet business demands, introducing a new system of computer controlled decentralised warehouses. That same year, its Cash and Carry business introduced hand-held laser scanners, a first in Australia.
Davids also affirmed the value of independent retailers placing greater focus on independent retailers' needs through a range of initiatives: Black & Gold generic products; low cost scanning systems; host support and retail management systems.
1984 saw Davids expand across the eastern coast. Victoria was first, with the acquisition of wholesalers Foodland and Withers. Expansion into Queensland followed with the acquisition of Clancy's retail franchise operations. Over 100 stores were bought and later sold to independent retailers.
In another first, the retail banner IGA was introduced to Australia by Davids in 1988. IGA has remained a flagship retail banner for independent retailers.
By the end of 1992 the Davids "empire" had an east coast network. It absorbed independent grocery wholesalers VGD, in Victoria and Newco, a sponsored banner based in ACT. The eastern state stores were rationalised under retail banners Rainbow, Festival, Foodtown and Welcome Mart.
Davids in Asia
A visit to Beijing, China in 1978 was the start of years of extensive research in various Asian countries. Davids Export Division (in Australia) also forged strong links with the region over a number of years. Finally in 1992, not content solely with Australian markets, the David family ventured overseas with a move to Singapore purchasing a 10,000 square metre warehouse. In mid 1993 Davids Singapore was the first company venture in Asia. The Asian operations would eventually extend to Thailand, Malaysia and Indonesia. These operations would remain in family hands.
1994 was a momentous year - Davids Limited became a listed public company on the Australian Stock Exchange. The next few years would see even greater growth fuelled by further acquisitions and expansion.
The acquisition of Independent Holdings Limited extended wholesale operations to South Australia and the Northern Territory
After success as a wholesaler, Davids ventured into grocery retail, acquiring Jewel Food Stores Pty Limited in 1995. A move into food service distribution followed through the acquisition of John Lewis Foodservice Pty Limited. In 1996 Davids completed a takeover of Queensland Independent Wholesalers (QIW) and its Composite Buyers Limited (CBL).
Rapid Expansion takes its Toll
As the 90s progressed, the economic climate deteriorated. By the mid 90s business became increasingly tough and the rapid expansion was to take its toll on the Davids group. In the financial year ended 30 June 1997, Davids wrote off a staggering $346 million in abnormal items. As a result, the company made a loss after income tax of $240 million.
In July 1997, a new CEO, Don Bourke was appointed to restructure the balance sheet and return the group to profitability. A converting preference share issue of $175million was launched into the market in September 1997. Major warehouse properties were sold to and leased back from a property trust realising $145 million. Other property sales realised $23 million. A major inventory reduction campaign was successfully completed. The measures saw bank indebtedness fall from $392 million at 30 June 1997 to $123 million at 30 June 1998. Measures to improve profits were less successful.
Metro Cash & Carry, South Africa
In March 1998, South African group Metro Cash & Carry Limited (Metro), bid for the shares in Davids and in May 1998 gained control of more than 70% of the issued ordinary shares. With the change in ownership, the CEO, Finance Director and some Non-Executive Directors resigned and the Board of Directors was re-constituted.
After acquiring a controlling interest in Davids, Metro reviewed existing business operations and prepared a strategic plan drawing on Metro strengths. These strengths included: supplier relations; inventory management, information technology, financial controls, management expertise, core activity focus and good customer relations.
Some of the key initiatives were:
- The group was restructured into four business pillars: Davids Distribution; Campbells Cash and Carry; John Lewis Foodservice and Liquor Distribution. A strong state based focus was introduced.
- Strong marketing and income generating plans were implemented to stem retail customers' market share slide. Supplier relationships were also strengthened.
- Retail banners were streamlined from 29 down to 4, each with a clear marketing strategy under the IGA umbrella. To avoid conflict with and allow Davids Distribution to focus on wholesaling, company owned retail stores were gradually sold to independent retail stores.
- Technology investments, a cost reduction focus and value-added customer services were introduced.
Within a 10 month period, Metro also implemented new warehouse systems, improved productivity standards and increased performance awards. Further improvements continued under the new management.
In 2000, the grocery wholesaling business pillar Davids Distribution was re-named IGA Distribution. At the AGM on 4 September 2000, Metcash Trading Limited (Metcash) became the official company name replacing Davids Limited. The name change marked the company's turnaround - our controlling shareholder and management team had dramatically re-structured and revitalised the former family-owned and ailing group.
Capital Reorganisation and FAL Acquisition
On 6 December 2004, Metcash announced:
- its intention to make an off-market takeover offer to acquire the entire issued share capital of Foodland ‘Associated Limited (Foodland); and
- a Capital Reorganisation resulting in the acquisition of the entire issued capital of Metcash's 60% majority shareholder, Metoz Holding Limited (Metoz), formerly Metro.
After protracted negotiations, Metcash made the significant acquisition of Foodland Associated Limited (FAL) in November 2005. FAL. FAL's assets included a large distribution centre in Canningvale, Western Australia, and a warehouse in Richlands, Queensland and over 60 Action stores. An extensive action plan integrating the FAL Australian businesses into Metcash was implemented.
In line with Metcash's policy of not competing with the company' customers, all Action stores were, over time, sold to independent retailers. All former FAL stores (Action, Dewson and Supa Valu stores), that met IGA specifications were rebranded under IGA.
IGA Fresh Formally Established and Successfully Surviving a Devastating Hailstorm
IGA Fresh, an intrinsic part of our grocery business IGA>D, was formally established in November 2007 to provide a complete fresh food solution for independent retailers.
In December 2007, the IGA>D Warehouse at Blacktown in NSW was rendered inoperable following a severe hailstorm. Quick disaster response coupled with strong management and stakeholder support ensured a rapid recovery with the group still managing to post a record $10 billion in sales.
Venturing into Hardware and Franklins Acquisition
In March 2010, Metcash acquired 50.1% of Mitre 10 the iconic hardware business with over 400 independently owned Mitre 10 stores and over 400 non-branded independent customers. Mitre 10 joins the Metcash group with a fifty year history of supporting independent home improvement and hardware retailers, who are an integral part of local communities around Australia. The focus for Mitre 10 is to generate supply chain improvements and build a strong merchandise and marketing model.
On 1 July 2010, Metcash announced it would acquire Interfrank Group Holdings Pty Ltd, the owner of the Franklins chain of 85 supermarkets, comprising 77 corporate stores and supply to 8 franchised stores. The transaction was expected to be completed by 30 September 2010, subject to Australian Competition and Consumer Commission (ACCC) approval, for a consideration of approximately $215 million.The ACCC announced, on 17 November 2010, its decision to oppose Metcash's proposed acquisition of Interfrank Goup Holdings Pty Ltd. The ACCC sought an injunction against Metcash proceeding with the acquisition. The Federal Court decided Metcash could proceed with the acquisition. However, the ACCC appealed the decision. The Court reaffirmed its original decision and on 30 September 2011, Metcash finalised the Franklins acquisition.