02 August 2007 | Paul Snell
Better buying and an improved supply chain are among the benefits expected from a takeover of the Australian retailer Coles.
Last month shareholders at the supermarket agreed to a AUS$21.9 billion (£9.3 billion) takeover from another Australian firm, Wesfarmers. It also owns DIY retailer Bunnings and mining and chemical manufacturing businesses.
Richard Goyder, Wesfarmers' managing director, said the move would create efficiencies by combining global sourcing functions and improving relationships with common suppliers. "We are confident that, once customers appreciate the change, the investment will yield good outcomes. These improvements require better buying, work in store and work within the supply chain."
He also promised to continue a transformation project to modernise Coles' supply chain. It wants to save AUS$425 million (£182 million) by 2008 from procurement and supply chain improvements including simplifying processes for suppliers and updating IT systems.
Yet John Gillam, managing director of Bunnings, said the savings could be delayed until 2010.