Liquor sales were up 0.7% for Metcash during the first quarter of FY20, as the trend towards premiumisation continues in the IBA network.
Food sales also improved during the first quarter 0.6%, despite a highly competitive market. Supermarket wholesale sales, however, fell 0.5%. Meanwhile, total hardware sales declined 4.4% compared to the same period in 2018.
In FY19 sales and earnings in Liquor increased 5.6% to $3.67billion.
IBA is seeing huge growth in private label and now has approximately 80 products across the wine, beer and spirit categories. Wine sales, which were up 20% during FY19, and now make up 85% of its private label sales.
The IBA network includes Cellarbrations, The Bottle-O, IGA Liquor, Duncan’s, Liquor @, Thirsty Camel, Big Bargain and Porters Liquor. It is the second-largest network of liquor retail outlets in Australia with approximately 2700 stores.
The IBA retail network has grown to represent approximately 55% of total sales in the Liquor pillar.
ALM supplies more than 12,000 liquor customers. In addition to supplying liquor stores, ALM incorporates a specialist on-premise liquor division that supports bars, pubs, restaurants and hotels.
“While our markets remain challenging, we are encouraged by the confidence of our independent retailers in the future and their willingness to continue investing in stores,” Metcash chairman Robert Murray told investors at the company’s AGM.
“Together, we are improving the quality and competitiveness of our retailer networks across supermarkets, liquor and hardware to underpin their ongoing success.”
CEO Jeff Adams (above) told the AGM that the Liquor pillar’s focus for the year would be on growing its share of the on-premise market, expanding its company-owned store network and the continued national roll-out of Porter’s.
“Historically we have under-indexed in on-premise sales and this provides a significant growth opportunity,” Adams noted.
“Our strategy includes strengthening our alignment between key partners, better leveraging our existing network and investing in a dedicated on-premise team.”
Metcash expects to expand its premium Porter’s network from 21 stores in NSW to approximately 100 stores nationally over the next few years. Its first Porters store in Victoria open in Moonee Ponds at the end of July 2019 (pictured main).
It also expects to complete its trial of 10 corporate stores by the end of FY20.
“We have commenced trialing corporate stores with the potential to establish a portfolio of ‘best in class’ company-owned stores,” Adams said.
“These stores provide a platform to test and learn new retail concepts, thereby helping to provide confidence and support to our retailers when rolling out new programs across the network.”
Adams also noted that one of IBA’s strengths in liquor sales was its focus on knowledgeable staff and localised liquor ranges.