The pandemic has helped drum up sales for Metcash, who reported positive gains in its 2020 Annual General Meeting yesterday.
In an update to investors, the wholesale distributor for IGA, Foodland, Cellarbrations and Mitre 10, among others, announced Group revenue was up 2.9% to $13 billion for FY20 and recorded sales growth across all pillars.
This follows Chairman Robert Murray describing FY20 as one of the most challenging Metcash had experienced, due to the bushfires, which had significantly affected its regional and rural retailers, as well as the global pandemic and supply chain pressures from the resulting panic buying.
First quarter sales for FY21 were also encouraging, up more than 10% across food, liquor and hardware. Food sales were up 11.4%, while wholesale supermarket sales (ex-tobacco) were up 13.8%, the first sales growth in wholesale since FY12.
This was despite the significant loss of Drakes Supermarkets in South Australia, who launched their own distribution centre last year. Excluding this loss, food sales in the first quarter FY21 was up 14.9% and Supermarket wholesale sales up 18.4%.
This was helped in part by panic buying. Mr Murray noted the pressure on supply chains to keep pace with the sudden spike in stock demand had seen Metcash grow operations to the equivalent of having added another distribution centre within two weeks. As well as a shift in consumer behaviour, with people eating more meals at home and choosing to shop hyper-local.
“The success of our strategic initiatives to further improve the competitiveness of our retailer network, together with a shift to more local neighbourhood shopping during COVID-19 restrictions, resulted in market share gains for the IGA network,” Mr Murray told investors.
Liquor was also up for FY20 and despite New Zealand and Australian sales impacted by COVID-19 restrictions for the final five weeks of the earning period, it recoded its seventh consecutive year of growth.
Metcash has also seen positive increases for the pillar in the FY21 first quarter, with sales up 11.4%. Excluding areas affected by ongoing trading restrictions, this was up 23.2%. Hardware also delivered strong results, up 19.2% for the first quarter.
Metcash also announced Mark Laidlaw, who is retiring as CEO of Hardware, would be replaced by Annette Welsh and Group CFO Brad Soller, also retiring, would be replaced by Alistair Bell. A search for a replacement for Non-Executive Director Wai Tang, who passed away in February, is still ongoing.