The 68,000 sqm centre will replace the company’s existing DC at Kidman Park and is expected to create operational efficiencies in South Australia and allow access to a wider range of products than is currently available in the region.
Construction is scheduled to be completed in mid-2020, when the company will transition its operations from the Kidman Park facility to Gepps Cross.
“This significant long-term investment for our independent retailers in South Australia reflects our continued focus on championing their success,” Metcash Group chief executive Jeff Adams said.
“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.”
The company believes the new DC will also benefit local suppliers by providing a route to market for their products.
In August, Metcash outlined a five-year plan to investors focused on accelerating existing transformation initiatives and improving infrastructure to drive growth, while embedding a cost-saving mentality, across the business.
The plan was revealed just two months after the retailer announced a $149.5 million statutory loss for the 2018 financial year, largely due to a $352 million impairment booked when Drakes Supermarkets declined to sign on to the new distribution centre.