Metcash boss Doug Jones says cost-conscious shoppers are bypassing big-box chains for their booze

Metcash boss Doug Jones says cost-conscious shoppers are increasingly choosing their local liquor stores over big-box chains as the product offerings improve and the price gap narrows.

The supplier to independent supermarkets such as IGA and Foodland also supplies liquor brands Cellarbrations, The Bottle-O, IGA Liquor and Porters.

Speaking as the group unveiled a 10 per cent lift in profit after tax to $283.3 million for the 2025 financial year, Mr Jones said shoppers continued to adjust their spending habits even as inflation moderates.

“For example, in liquor . . . the convenience format really resonates with our shoppers,” he said on Monday.

“And what liquor customers are saying, essentially (is) that they’re not having to bypass their local liquor stores as the quality of the offer improves, as the ranging is tailored to their local needs, and as the price gap comes down.”

Mr Jones said the same goes for its food category, which covers more than 1600 independently-owned stores in Australia.

“I think one of the things that I’d point out is the steady to slightly up foot traffic in our food stores, which really does talk to the fact that IGA is a relevant and competitive offer even in difficult market conditions,” he said.

As Coles and Woolworths ramp up the fight for shoppers’ stretched budgets with slashed prices on hundreds of popular grocery items, Mr Jones said he believed choice was the primary ingredient of healthy competition.

“We absolutely are able to compete with them,” he said.

“We’re very clear that our processes of monitoring their pricing and adjusting our own . . . will continue to be effective.

“I base that confidence . . . on the relationships that we have with our suppliers who support the strategy. (Suppliers are) always looking for multiple route-to-market partners and they don’t like being overly beholden to one or two players in the market.”

Metcash’s group revenue lifted 8.9 per cent to $17.3 billion for the full year, while earnings increased 2.3 per cent to $507.8m, which was in-line with guidance provided earlier this month.

Total food sales (excluding tobacco) increased 20.8 per cent to $8.8b, reflecting growth in both supermarkets and at its Campbells convenience stores.

Liquor sales grew 3.4 per cent to $5.3b, with growth accelerating in the second half, which Metcash said was underpinned by continued shopper preference for the convenience and quality of the independents’ differentiated offer.

Metcash earlier in June announced it would reinvigorate its hardware division by merging its Independent Hardware Group — which includes Mitre 10 and Home Hardware — and Total Tools. This would form the Total Tools and Hardware Group.

Metcash on Monday said the level of trade activity at its hardware pillar continued to be subdued. Full-year earnings declined 10 per cent to $189.3m, reflecting weaker trade activity and increased depreciation and amortisation associated with acquisitions.

Group sales were up 4.7 per cent for the first seven weeks of the new financial year.

Metcash shares closed up 2.7 per cent to $3.80.