June 5, 2018 / 11:28 PM / a year ago

UPDATE 1-Australia's Metcash sees $268 mln impairment in supermarkets arm

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June 6 (Reuters) - Australian grocery wholesaler and distributor Metcash Ltd said on Wednesday it expects to record a A$352 million ($268 million) impairment to goodwill and other net assets for the year ended April 30, after the loss of a major customer.

The impairment charge in its supermarkets and convenience arm comprises A$318 million of goodwill and other intangibles, and A$34 million of other assets, and is non-cash in nature, the company said in a statement.

Metcash last month flagged a decline in supermarket sales owing to a weaker retail environment Australia, causing its shares to fall more than 10 percent.

It said at the time it was planning to build a new distribution centre in South Australia, but noted that independent chain Drakes Supermarkets had not committed to have its supermarkets in the region supplied by the center.

Australian retailers have fallen on hard times of late, owing to stiff online competition as well as reduced household spending.

Retail conglomerate Wesfarmers earlier this year revealed plans to exit the supermarket business by spinning off its Coles division following lackluster sales.

Metcash will release its annual results on June 25. ($1 = 1.3130 Australian dollars) (Reporting by Ambar Warrick in Bengaluru, editing by Richard Pullin)

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