Metcash has revealed in a trading update that its liquor sales were up 11.4% Australia-wide in the first quarter of FY21.
Excluding those customers impacted by the trading restrictions, sales in the first quarter of FY21 increased 23.2%.
It follows the Metcash Liquor pillar delivering its seventh consecutive year of sales growth in FY20, despite New Zealand operations and on-premise customers in Australia being shut down in the last five weeks of FY20 due to COVID-19 restrictions.
Chairman Robert Murray told shareholders at the Metcash annual general meeting today: “The FY20 financial year will stand as one of the most challenging years we have experienced, with devastating bushfires severely affecting many of our retailers and local communities. particularly in rural and regional areas where our retailers are strongly represented.
“This was then followed by the COVID-19 pandemic, which drove unprecedented spikes in demand, particularly in the Food pillar, resulting in extreme pressure on our supply chain.
“While COVID-19 trading restrictions had a positive impact on sales in our Food and Hardware pillars through March and April, our Liquor pillar was adversely affected by the shutdown of businesses, both in Australia and New Zealand, which represented approximately 20% of its total sales.”
However, he said Metcash had benefited from consumers shopping more in their local neighbourhoods during COVID-19.
“The success of our strategic initiatives to further improve the competitiveness of our retailer network, together with a shift to more local neighbourhood shopping during COVID-19 restrictions, resulted in market share gains for the IGA network,” he said.
Metcash boosts on-premise presence
Metcash revealed in 2019 that it planned to double its share of the on-premise market to 20%.
CEO Jeff Adams told shareholders at the annual general meeting that Metcash had made “good progress in addressing historical under-indexing in ‘on-premise’ market”, with 50 new customers added in FY20, which helped deliver ‘on-premise’ sales growth of 10% pre-COVID-19.
He said the company had also invested in supporting customers impacted by COVID-19 restrictions and launched ALM Agora online market place, connecting on-premise venues directly with suppliers.