‘Local’ shopping trend helping Metcash

27 July, 2020 by Andy Young

Metcash has published its 2020 Annual Report, which has stated that liquor retailers “benefited from an increased preference for more local neighbourhood shopping”.

As well as detailing the seventh consecutive year of growth sales in the liquor division, which was highlighted in the group’s full year results, the annual report details how the liquor division has performed in the first seven weeks on FY21, under the constraints of the pandemic.

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The report states: “In the liquor pillar, sales for the first seven weeks of FY21 increased 5.5 per cent despite customers in New Zealand and ‘on-premise’ customers in Australia being impacted by COVID-19 trading restrictions.

“The increased in sales for the first seven weeks of FY21, excluding those customers impacted by the trading restrictions, was around 15 per cent.

“The business is focused on managing through the changed external environment while also progressing its strategic initiatives including private label and accelerating the rollout of its new ‘Shop My Local’ online offer across the network.”

The group added “The business is continuing to progress its growth in Trade, DIY and digital and has a strong focus on costs to help offset the impact of any reduction in sales volumes.

“There is uncertainty over the timing of further lifting of COVID-19 restrictions in Australia and the extent that our businesses will continue to benefit from the favourable change in consumer behaviour.”

Group CEO, Jeff Adams, said: “Our IBA bannered retail stores experienced a short period of panic buying at the end of March when it was unclear what government restrictions would be implemented, and demand remained high in April following the shutdown of ‘on-premise’ businesses.

“The business accelerated the development of its online shopping offer ‘Shop My Local’ and launched it six months ahead of schedule to provide an option for customers not wanting to physically shop instore. This was an outstanding effort by the Liquor team.

“Significant efforts were made to assist many of our New Zealand and Australian ‘on‑premise’ customers who found themselves in difficult situations due to the shutdowns. We received very positive feedback from these customers, and it is another great example of living our purpose of championing the success of our independent retailers.

“We also continued to expand our private and exclusive label product range, and recently acquired 75 private label brands from Kollaras. Investment in private label is important to support our retailers in providing consumers with everyday value, particularly in the current economic environment.”

Adams also said Metcash was “making good progress” on a number of on-premise initiatives prior to the pandemic, but these have been put on hold and will be reviewed once the company has a better understanding of how the on-premise market has been impacted by the COVID-19 restrictions.