Metcash’s future success will rely on increasing marketing funds, reviewing ongoing strategies to improve productivity and thriving on the success of recent acquisitions and joint ventures.
Incoming Metcash CEO Ian Morrice said while the company continues to face challenges – like most other retailers in the country – and consumers remain value conscious, Metcash is preparing to keep growth at the front of the agenda.
“There are two or three things that’s our priorities – review food and grocery operations to ensure we are better able to compete with deflation environment despite the drop in the Australian dollar (assuming deflation is here to stay) and we need to adapt accordingly; ensuring strategies to better address online and digital marketing opportunities that are evident in each of the pillars; and ensure the independence sector is thriving and that there’s retail sustainability,” he said.
The supermarket group reported a 6.9 per cent lift in underlying full year profit to $281 million. However, it suffered a lost in market share in its core food and grocery business due to restructure impacting on sales results, which dropped 2.3 per cent to $9.1 billion. But it did achieve a 35 per cent earnings growth to $47 million in its liquor business.
The company’s concept store Value Depot, which opened in Queensland last December, continues to also trade well, Morrice said.
“The Value Depot business has been kept as modern version of Campbells. We have retained the customers of Campbells and have grown the customer base. The sales have progressed well and there are indications that we are going to achieve the objectives.
“We haven’t yet come to a decision about what other locations to format but we will be taking a look at in the next six months.”
Metcash’s ever-growing hardware and automotive division, which now includes Mitre 10 and the Automotive Brands Group, saw all-round positive results. Sales increased 12.6 per cent to $938.4 million and earnings grew 70.8 per cent to $36.2 million.
Developing the company’s online strategy across all of its pillars will be another focus.
“We’ll take the next few months to work through sector by sector to how we need to better support our retailers in the sector,” Morrice said.
“We’re in different places in each sector. For example, our Mitre 10 business offers ‘click and collect’ and a loyalty card program whereas IGA retailers have historically pursued their own activities. It’s important to look at this activity because there’s considerable momentum that will change it significantly in the future.”