Metcash Group generated sales revenue of $6.63 billion for the first half (May-October, 2016) of its FY17, up 0.3 per cent against the previous corresponding period, with an intense trading period in the food and grocery sector negatively affecting sales in that division.
Continued earnings growth in the liquor (up 1.6 per cent to $1.56 billion) and hardware (up 9.6 per cent to $581.6 million) pillars was more than offset by lower earnings in food and grocery (down 1.2 per cent to $4.49 billion).
Metcash says that while there was continued positive momentum in the food-and-grocery pillar from strategic initiatives and reduced operating costs from the ‘Working smarter’ program, these were insufficient to offset the impact of an intense trading period as well as weaker earnings in the convenience business, where sales declined two per cent to $758.5 million.
“Our group results were negatively impacted by an intense trading period in the food-and-grocery sector, as well as a slowdown in the growth of consumer spending,” Metcash Group CEO Ian Morrice said. “Our focus remains on supporting independent retailers to ensure they are well positioned as ‘The best store in town’, and while both our strategic initiatives and ‘Working smarter’ cost-savings program are progressing well and delivering returns, they were insufficient to offset the impact of increased competition in this half year.
“Despite difficult market conditions in the supermarket sector, independent retailers are continuing to invest in growing their businesses, including new stores and refurbishments, and we remain focused on supporting this growth.”