In the period leading up to Christmas, food and grocery prices have shown signs of stabilisation, with customers increasingly filling their carts with items from independent stores like IGA and Foodland. This trend was highlighted by Doug Jones, CEO of Metcash, a company overseeing supermarket, food, liquor, and hardware supply. Jones noted that Metcash’s independent supermarket brands attract customers from larger chains as people diversify their shopping habits.
Metcash recently reported a 12.2% increase in profit, reaching $141 million, alongside a 1.3% increase in revenue to $7.837 billion. Jones expressed his willingness to participate in a Senate inquiry led by the Greens, focusing on potential price gouging by major supermarkets during the cost-of-living crisis.
Jones emphasised the vital role of independent networks in offering value, diversity, and choice to consumers, contrasting them with major players like Woolworths and Coles. He also supported the idea of changing the burden of proof in acquisitions, which might hinder Woolworths and Coles’ expansion.
Metcash has seen a rise in sales and profitability for the half-year until October 31, driven by increased foot traffic in stores like IGA and Cellarbrations. Despite rising costs and a decrease in parts of its hardware division, the food sector of Metcash showed a 3.6% earnings growth, reaching $101.7 million.
The company announced an interim dividend of 11 cents per share, a slight decrease from the previous 11.5 cents. Jones highlighted a moderation in wholesale price inflation and increased customer volumes, with a notable rise in private label purchases. He pointed out the strong performance of frozen food and a shift towards fresh food due to price deflation.
Investors responded positively to this news, with Metcash shares increasing by 2.5% early on the announcement day. Analyst Ben Gilbert from Jarden commented on the half-year results as satisfactory, considering the challenging market, and highlighted the company’s cost-cutting measures and strong cash flow.