Metcash evolves and premiumises its private label range

04 September, 2019 by Andy Young

Metcash is continuing to improve and develop its liquor business and store network, which includes the on-going evolution and premiumisation of its private label range.

Speaking at the Group’s Annual General Meeting recently, Group CEO Jeff Adams laid out the details of the liquor business, store investment and core range. Adams also spoke about the plans for the future of the liquor business and also detailed how the premium consumption trend has continued in the first quarter of the 2020 financial year.

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Adams told the AGM: “We have once again made good progress with our store investments to improve the quality of the IBA network. A further 81 stores were refreshed and 110 cool rooms upgraded, bringing the totals to around 330 and 610 respectively.

“In our private and exclusive labels initiative we now have about 80 SKUs across the wine, beer and spirits categories. Sales continue to grow strongly, particularly in the wine category, which was up 20 per cent on the prior year. The wine category now represents around 85 per cent of total private and exclusive label sales.

“In core range we continue to have a strong focus on providing a regionalised core range, tailored to the local community and to the changing consumer trends. Quality stores, conveniently located, with localised ranges and with personable and knowledgeable service is what differentiates our IBA network and provides us with a competitive advantage.”

Speaking about the on-premise side of the business, Adams added: “We have historically under-indexed in on-premise sales and have a renewed focus on the significant growth opportunity that this channel provides.

“Our plan includes better leveraging of our existing network and strengthening our alignment with key partners. During the year we have invested in, and mobilised, and dedicated on-premise team, which is already leading to some pleasing results.”

Adams also told the AGM that at the heart of Metcash’s strategy is the championing of its independent retailers, part of that focus includes what the group has called its ‘MFuture’ program, he outlined what the key initiatives are for the liquor channel as part of this program.

“In liquor the national expansion of our Porters Liquor brand and growth in private and exclusive label range is aimed at further capturing the trends to higher value products.

“Our MFuture initiatives also include growing our share of the on-premise market and we are accelerating our digital capability and trailing corporate retail stores.”

Finally Adams addressed the first quarter performance of the liquor business, which is showing some growth, as the premiumisation trend continues.

“In liquor the premiumisation consumption trend has continued into the first quarter of the 2020 financial year; total liquor sales including charge-through for quarter one, was up 0.7 per cent versus a previous comparable period growth of 5.6 per cent.

“Liquor sales growth in financial year 2019 did include the benefit of the cycling of additional new contract customers in financial year 2018.”

Concluding his presentation at the AGM, Adams said: “While we continue to have highly competitive and challenging markets, I’m generally excited about our plans for the future. I’m also very encouraged by the enthusiasm and passion I have experienced from our independent retailer and supplier partners to ensure the independent retail sector remains strong and grows.”