Incoming Metcash boss takes fight to rivals

THE incoming Metcash chief executive, Ian Morrice, will review all aspects of the grocery and liquor wholesaler, including its private label strategy and marketing budget, as the 30-year retail veteran takes on one of the toughest roles in corporate Australia - battling Woolworths and Coles.

Mr Morrice - replacing Andrew Reitzer, who will leave on June 30 after leading the company for 15 years - said Metcash's independent supermarket customers could beat the duopoly but it wasn't necessarily a battle over who had the cheapest prices.

"Our job as a wholesaler is to ensure our customers can compete as best they can with the chains who have got much more scale," he said.

"But [we also want to] help them to understand where they can differentiate, because one could argue ... the two chains [Woolworths and Coles] are quite similar to each other in many ways, whereas the benefit of the IGA network is these are local people who have got local businesses who understand the local customers."

For the next three months, the Scottish-born incoming CEO will work closely with Mr Reitzer before entering the trenches of the supermarket wars.

Mr Morrice, 52, and a supporter of Aberdeen FC, said Metcash had a battle on its hands as Woolworths and Coles fought an intense price war.

"The challenge facing Metcash in food and grocery, in part, in the last couple of years, has been food deflation and obviously that has direct impact on the wholesale part of the model," he said.

But Mr Morrice said Metcash's customer base of independent supermarket chains, trading under the IGA banner, could offer a lot more than just cheap prices.

"I think IGA supermarkets have got a lot of benefits the chains can't ever have - the benefits of local ownership and the passion to deliver, in many instances, outstanding customer service," he said.

Metcash was forced to lift its marketing spend last year.

"What's happening today is not a price war, this is where the media has it totally wrong, it's a marketing war," Mr Reitzer told Fairfax Media.

Mr Morrice, who between 2004 and 2011 was CEO of New Zealand discount retailer the Warehouse Group, will be paid a salary of $1.5 million with short-term and long-term incentives worth up to $2.7 million.