Metcash ‘ideally positioned’ to leverage changes in consumer habits

Consumer habits have changed as a result of COVID and Metcash has outlined how it has adapted to those.

Metcash has outlined the changes in consumer behaviour that it has noticed in the convenience sector since the outbreak of the COVID-19 pandemic, how it has adapted and why the business is now ideally positioned to leverage off those changes in habits.

Speaking at a recent Metcash investor day the CEO of Metcash Food, Scott Marshall said the work the business did pre-COVID set it up for a strong position and helped see positive sales growth.

“Coming into this role we knew our business had faced significant headwinds and I think we have overcome those now and we’ve got the right strategies in place to keep pushing forward,” Marshall said.

“We’ve been really focused on improving our network and that has underpinned where we are today and it will underpin our growth going forward.

“A key callout is all the work we did pre-COVID absolutely helped us coming into COVID. We had positive momentum in sales, we saw a couple of periods of positive sales growth.

“Looking at our growth opportunities, our plans won’t change a lot, but [we are] fine tuning them. We are really about building the best store, with the best range by each location. I also think a real opportunity for us has come out of COVID and that is in the digital space.

“We believe we are well positioned, particularly with being focused on our customer first, and that is our retailers. We have always had the shopper-led strategies but we have got to get it right for our retailers going forward.”

Talking about how Metcash has performed during COVID, Marshall said the group is trading well and trading better than the market.

He added: “There has been a shift in consumer behaviour. We think that the work we have done pre-COVID in resetting our network and being more competitive has helped us retain shoppers.

“Shopper retention and the shoppers coming into our stores continues to be strong and it is driving good demand.”

Marshall said there were a couple of key points that he wanted to call-out, saying “at the start of COVID our retailers really stepped up to support their local communities. They operated in a way that was more unified than we have ever seen before.

“But through that period, what gave me a lot of pride in what we do is that our distribution workers had to keep coming to work with all that uncertainty and they kept showing up in great numbers. And then in our store, our retailers, our customers and their staff had to front up in very uncertain times and they did it in a very productive way, creating safe and friendly environments.”

Marshall also outlined some of the key changes in consumer behaviours that happened during COVID including an increased preference for shopping local, a shift from the city to regional areas and increased demand for branded and trusted products.

Looking ahead, he said: “We believe we are ideally positioned to leverage off those changes in consumer behaviours. Our stores are very conveniently located, we have a great footprint and it’s well-spread between greater metro and regional areas.

“Our shoppers are telling us they are seeing an improved network, they are seeing better value in the network, they are seeing a better price paid at checkout and they are seeing better store quality.

“Over the period we have seen an increase in basket transactions and we’ve seen an increase in basket size, which gives us confidence that there is a shift in behaviour and that it’s sustainable because we have seen it for a sustained period.

“We don’t think things will go back to normal, there is now a new normal.”

The group also gave a trading update for the first four months of the second half of the 2021 financial year with strong sales momentum continuing through all of the group’s businesses. Supermarket sales increased 14.4 per cent against the prior corresponding period (10.6 per cent ex tobacco), total food sales increased 4.1 per cent vs pcp (14.1 per cent ex 7-Eleven impact) and that the contributions from all joint ventures has continued to be strong.

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