IGA owner Metcash posts strong sales growth amid ‘highly value-conscious environment’

Metcash warns cost-conscious shoppers will keep value front of mind well into next year as the grocery giant posts strong sales growth.

Best known as the distributor for IGA supermarkets, Metcash on Friday revealed total group sales were up 6 per cent in the year to September 8, following growth across its food, liquor and hardware divisions. This was partly buoyed by recent acquisitions.

Total food sales were up 17.9 per cent for the period, with its flagship supermarket pillar — which also includes the Foodland brand — posting a 3.5 per cent lift compared with the prior corresponding period.

Metcash told investors that food, excluding tobacco, continued to perform well in a highly value-conscious environment.

“The sales performance reflected volume growth and moderating inflation, demonstrating the business’ resilience and relevance of the independent network’s differentiated offer,” it said.

Addressing the company’s annual general meeting the same day, Metcash chair Peter Birtles said strong earnings growth in food was delivered amid the most value-conscious shopping environment in recent memory.

But the current economic conditions remained challenging and continued to impact consumer confidence, Mr Birtles said.

“As a result, we expect the shift in consumer behaviour to more value-conscious choices to remain in FY25,” Mr Birtles said.

“The company’s platform of three diversified businesses is fundamentally strong, and we have the right plans, teams and capabilities in place to deliver future growth as we work through the current economic cycle.

“We continue to work closely with our suppliers and shoppers to maintain a value offering with a wide range of products at competitive prices, and we are encouraged by our retailers’ adaptability and ongoing ability to meet shoppers’ needs.”

Metcash’s supermarket sales growth compared with Woolworths, which for the first eight weeks of the 2025 financial year posted a 3 per cent rise in sales growth.

Meanwhile, Coles said supermarket sales revenue grew by 3.7 per cent in the first eight weeks of fiscal 2025.

Metcash on Friday revealed total sales for its liquor division — which includes brands Cellarbrations and The Bottle-O — grew 2.7 per cent in the year to September 8.

Hardware sales through brands Total Tools, Mitre 10 and Home Hardware grew 2.5 per cent.

“In hardware, the external market . . . has continued to be very challenging with trade activity softening even further,” Metcash said.

“Retail stores are facing margin pressure due to the impact of lower volumes on fixed costs.”

Metcash in February purchased food service distributor Superior Food for $412.3m, Bianco Construction Supplies for $82.2m, and frame and truss operator Alpine Truss for $64m.