The long-serving chief executive of supermarket wholesaler Metcash has called for "stability in policies" to help retailers.

Andrew Reitzer has been at the helm of Metcash, the wholesaler behind the IGA and Franklins supermarket chains, for the past 15 years and is retiring today.

In an interview with Alan Kohler on the Inside Business program, Mr Reitzer said Australian business leaders wanted stability.

"My wish - and I'm sure it's the wish of every businessman - is to get stability, stability in policies, and to get over the election, whichever way it goes, as quickly as possible," he said.

"I think that will be very, very healthy for Australia and our industry within that.

"Every time there is an election campaign, the consumer just loses heart. Nothing has happened to unemployment, interest rates are down and the consumer just isn't spending unless the items are on great specials."

The grocery, liquor and hardware wholesaler this week announced a respectable 6.9 per cent rise in its full year profit to $281 million.

However, that was largely propped up by recent acquisitions and a diversification into hardware and auto parts while its core grocery businesses struggled.

Mr Reitzer has been a vocal and long-term critic of the dominance and the duopoly of Coles and Woolworths.

"I think in grocery definitely, the two competitors have 74 per cent market share so it's impossible to steal market share from them or really grow our grocery business dramatically, although we are very happy with where we are," he said.

"What we did about two years ago is that we proved that our business model which is a big wholesaler supplying and supporting a franchise network of independent retailers can be transferred.

"So our first transfer to Mitre 10, we were scared, we only bought 51 per cent but that proved very, very successful so we now own 100 per cent.

"More recently we've gone into the automotive after-care market, so Autobarn and Autopro and in the first year that's smack on plan," he said.

"We're not trying to escape Woolworths and Coles in Australia, you can't. But what we are saying is that our model applies to industries other than groceries."

Mr Reitzer says the grocery business has been hit by three consecutive years of deflation.

"In Australia costs have been going up, labour goes up, electricity, with the carbon tax goes up, but the selling price is coming down, and as a retail or trading business, any business for that matter, that's impossible," he said.

"So for three years we have been covering for that with increases in productivity and greater efficiency, but that's run out now, and you can see that a little bit, in our numbers for food and grocery," he said.

Mr Reitzer said deflation is the key issue for his successor at Metcash, new CEO Ian Morrice.

"If deflation disappears and a little bit of inflation comes back that's very good for our industry," he said.

 

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