Case Study: WA IGA Supermarket Franchise

Welcome to our Case Study Of The Month, showcasing clients who have enlisted our help to turn their business around. This Case Study focuses on a Western Australian IGA Supermarket Franchise where we worked through a Voluntary Administration and negotiated a substantial settlement for creditors and employees. Read how we made this happen.

Appointment Details

Service Voluntary Administration
Location Karlgoolie, Western Australia
Industry Food Retail

 

The Results

My Business Path worked closely with the business to see

  • anomalies identified against the charges from a major supplier for overcharges in excess of $1m
  • negotiate a substantial settlement  for creditors under the Deed Of Company Arrangement of one hundred cents in the dollar for both employees and unsecured creditors

 

The Solution

My Business Path's role in relation to the business was to

  • assess the company's financial performance
  • work alongside the business through a Voluntary Administration Process
  • draft and arrange for the signing of a DOCA.

 

 

The Financial Situation

In this Case Study, this WA IGA Supermarket Franchise came to My Business Path 

  • with primary operations involving an IGA supermarket franchise as well as commercial real property holdings
  • Should the company fold, both the business and the creditors stood to lose money and property with employees to lose jobs 


Challenges Facing The Industry

Supermarkets are scrambling to meet the needs of the changing buyer while staying ahead of their competition. The US, UK and European markets are showing us our Australian supermarkets of the future are likely to offer less choice and engagement, with boutique labels and greater convenience. The Australian market is fiercely competitive and highly concentrated, which forces wars in price-cuts, low profit margins, struggles with managing cashflow, and the constant need to update technology. This is amid  escalating labour costs and spikes in utilities.  

 

A Background In Supermarkets

During the 1970s, supermarkets exploded on the scene with a third of Australian groceries sold from supermarkets. By the late 1970s, the big 'four' supermarket chains Coles, Woolworths, Safeway and Franklins had a 47% share of the total Australian grocery market. It was coming into the new century that Aldi upset the apple cart by entering the market as a discount grocery alternative. This leaves fewer options for food producers to sell their products. But the way smaller operators can stand out is by connecting into their local community through local restaurants and businesses while offering personalised service with boutique brands and niche products.  

The people are real. The businesses are real. My Business Path designed a tailored solution that worked. 

 

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