Grocery wholesaler Metcash Ltd has signed a supply contract with 7-Eleven Pty Ltd and its 350 franchised convenience stores across Australia.

The contract is worth potentially AU$200m (US$155m) in annual sales to Metcash, while 7-Eleven stores will reap many benefits from dealing with Metcash’s Convenience Store Distribution Division.

For the range of products to be supplied under this agreement, the 7-Eleven stores are currently being supplied directly by manufacturers, resulting in an average 80 deliveries per month to each store, while Metcash expects to make an average of only 10 deliveries per month.

“Metcash will use its proven buying strength in acting as a primary distributor for all the grocery and dry goods ranged by 7-Eleven stores, said Metcash CEO Andrew Reitzer. “We will effectively become a one stop shop and delivery system for 7-Eleven, with the potential to expand into fresh products over time.”

The independently owned 7-Eleven stores are currently undergoing a full systems upgrade and will enjoy strong efficiency gains through the use of Metcash’s Convenience Store Distribution Division.

“Through the use of Metcash’s distribution systems, 7-Eleven will be better able to support our independent franchises through improved pricing, as well significantly reduced delivery and administrative costs,” said 7-Eleven CEO Warren Wilmot.