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Metcash grows into second half, bookmarks $375m for network, online growth

(Source: Bigstock)

Retail conglomerate Metcash has seen strong sales momentum across all of its pillars – food, hardware and liquor – during the first four months of its second financial half.

According to a trading update released to the market on Tuesday, Metcash’s supermarket sales rose 14.4 per cent compared to the prior corresponding period, while total food sales rose 4.1 per cent.

Liquor sales rose 19.6 per cent, with strong retail network sales outweighing the adverse impact of ‘on-premise’ customers – which have started to recover across states with easing restrictions.

Hardware saw the largest lift, up 31.6 per cent, largely due to increased customer retention and a continued drive toward DIY.

“Clearly there’s a shift in consumer behaviour,” Metcash group chief executive Jeff Adams told investors and analysts on Tuesday, according to the AFR.

“We’re seeing many new and returning customers continue to shop with us.”

The group plans to invest $375 million in the next three years upgrading and refurbishing its stores across its various verticals, as well as growing its range and further expanding its private label brands.

Perhaps the largest change, however, will be seen online.

A new, upgraded version of IGA Online is expected to be launched soon, with about 800 of the chain’s stores to be up and trading online by 2025, according to the AFR. The new and improved IGA Online will feature click and collect, as well as home delivery through a partnership with DoorDash.

The grocer’s online platform launched in April after pressure from government agencies and departments to ensure the supermarket could support home deliveries in the event of a Stage 4 lockdown.

“That’s a pretty big achievement for us considering we never had anything before,” Senior manager of digital transformation at Metcash Marc Keegan told Inside Retail last year.

“This is something that we haven’t done before. We’re trying to catch up on 10 years of competitors’ work. And I think we’ll get there very very quickly.”

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