Coles is transferring 45 supermarkets and eight associated Liquorland stores across four states to the independent Australian-owned food and grocery retail group, FoodWorks.
The transfer is part of Coles broader plan to improve its overall network of over 700 supermarkets and over 600 Liquorland stores and is an important step in the Coles turnaround.
Coles managing director Ian McLeod said the store transfer is a win-win outcome that will ensure continued service to customers and ongoing jobs for team members.
“We think this is a great outcome for team members and customers of both Coles and FoodWorks,” said McLeod.
“In undertaking this store transfer a key priority has been to ensure continuity of employment for the affected store teams. I’m very pleased to advise that all store team members will be offered roles with FoodWorks and that they will retain all their existing employment entitlements.”
Total payment for the stores is approximately $35 million, including payment for stock, cash and the transfer of employee entitlements. The transaction is subject to ACCC approval and the approval of FoodWorks’ shareholders.
Coles and FoodWorks will work together to ensure a smooth ownership transition for both store teams and customers. Stores will be handed over to FoodWorks progressively over a nine-month period in line with an agreed transition plan.
Coles is supporting the store transfer arrangement through a secure vendor finance facility. McLeod said Coles remained committed to growing its customer franchise.
“We’ll continue to focus on landing the right store formats in the right locations across Australia for our customers,” he said. “The renewal store program will see our supermarket store network continue to grow.
“Coles already employs over 100,000 Australians, and our turnaround strategy, including the store renewal plan, will see Coles deliver a net increase in jobs over the next twelve months.”