Strong uptake for new Metcash promotional, refurb programs

Metcash, the wholesaler to IGA and independent supermarkets and convenience stores, said that grocery transformation initiatives were implemented progressively through second half 2015, with initial results encouraging.

With 2015 the first year of Metcash’s strategic long-term Transformation Plan, Metcash said at its AGM there were increasing headwinds in Food & Grocery that included intense competition and discount players impacting the market, consumer trends impacting the sales mix, and a deflationary environment continuing.

The Diamond Store Accelerator (DSA) refurbishment program was implemented and achieved the first year target of 50 stores, with 52 stores completing the program and another 18 stores refurbished.

At the DSA stores, retail store sales and warehouse sales rose 16%, Metcash said, while the target was to complete an additional 100 DSA stores in FY16.

Price Match was implemented in approximately 600 stores and a competitive price investment program was implemented in 1,100 stores.

Metcash said that ready-prepared Fresh was already in one third of the network; private label participation was growing at high double digits; the national IGA TV advertising campaign was launched on June 14; while it would also target key growth categories such as health and beauty.

A total of 70 IGA store refurbishments was completed with the next 100 planned.

The Huntingwood DC, impacted by a severe hail storm April 2015, is expected to be at full capacity by April 2016.

At its full year 2015 results announced in June, Metcash said that its convenience business achieved sales revenue growth of 11.3% and total sales revenue of $1.6 billion.

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

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