Metcash revenue increased by 7.8 per cent to $8.9b for the first half of FY23 underpinned by strong demand, inflation and acquisitions by the group. EBIT for the group increased by 10.3 per cent to $255.1 million.
Liquor was a stand out for the business. EBIT for the half was up 11.3 per cent – or $5 million – to $49.3 million, which Metcash attributes to strong sales to retail customers and the sales recovery to its on-premise customers.
CEO Doug Jones said, “The increased preference for local neighbourhood shopping continues to be seen in our strong sales performance, with shoppers recognising and enjoying the increased competitiveness, differentiated offer and relevance of our network of independent stores. Feedback from our retailers is that many shoppers have now changed their shopping habits to include local grocery, liquor and hardware stores.”
Metcash says that the strong sales growth was substantial enough to offset additional fuel, freight and labour costs faced by the b usiness.
Wholesale liquor sales grew across its retail network and to contract customers, thanks to this continued trend to shop local and consume at-home. Wholesale sales to IBA banner group were up by 1.2 per cent, with sales to on-premise customers increasing by 47.8 per cent when compared to 1HFY22, cycling lockdown.
RTDs and spirits were the strongest growth categories and wine continued to perform well. Sales of owned and exclusive brands increased by 14.7 per cent as the business continues to leverage the acquisition of Kollaras private labels. In the last six months, Metcash has launched three new brands to its portfolio: Knock‘N Bones in three varietals (Wine), True Illusions (Prosecco) and P.O.E.T.S Country Beer.
It has also run campaigns for its Cellarbrations, The Bottle-O and IGA Liquor banners and its loyalty program is staged to launch nationally early in 2023.
Metcash forecasts that supply chain, inflation and high labour costs will continue to be challenges in the second half FY23 and it expects the large on-premise gains to ease.
