Metcash announces $384m loss, but stronger convenience, IGA sales


Wholesaler to IGA and independent supermarkets and convenience stores Metcash Limited announced its full year 2015 results with group sales revenue up 1.7% to $13.6 billion, against a net loss after tax of $384.2m, while a new IGA advertising campaign aims to win back grocery shoppers and promote the Price Match initiative.

Significant items of $638.8m (pre-tax) were principally related to its Food & Grocery division’s asset write downs, while the Automotive division was sold for $275 million.

Metcash's Price Match had a strong take up through IGA stores2
Metcash’s Price Match had a strong take up through IGA stores.

Group CEO of Metcash, Ian Morrice, said that the results reflect the challenging conditions that Metcash’s Food & Grocery operations have faced, while initial results from the Transformation Plan are positive.

“The IGA network is strong and resilient and is supportive of the improvements we are introducing to our pricing, our ranges and to the look and feel of the stores, as we move towards being a customer-focused wholesale business,” he said.

In Food & Grocery, Supermarket wholesale sales (excluding tobacco) declined by 2.2%, which reflects an underlying sales decline of 3.3%, offset by a 1.1% increase in sales from Diamond Store initiatives.

IGA price match promise
IGA’s price match promise.

Strategy is focused on addressing issues through initiatives such as Price Match (600 stores), improving the fresh food offer, expansion of private label (another 500 stores) and the roll out of the Diamond Stores initiative (52 stores so far).

The IGA network of independent retailers posted like-for-like store sales growth of 0.7% in FY2015 (FY2014: Decline 1.1%).

The Convenience business achieved sales revenue growth of 11.3%, with total sales revenue of $1.6b in FY2015.

“Convenience experienced growth by existing customers adding stores and expanding ranges as well as new customer contracts (Night Owl and BP),” Metcash said.

In Metcash Liquor, there was a 3.7% increase in sales through the IBA retail network reflecting both the strength of the network and acquisitions.

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