Food and grocery wholesaler Metcash has reported an increase of 3 per cent in net profit for the first six months of the year to $95.8 million, despite “challenging market conditions”.
Group CEO Jeff Adams said “The first half results were pleasing in the face of challenging market conditions, with the Group delivering improved sales and earnings.”
Sales revenue rose by 2.2 per cent to $6.19 billion with Adams crediting the rise to its food and hardware business.
Supermarket sales were “broadly flat” at $3.6 billion. Adams said, however, it was encouraging to see a slowdown in the rate of deflation “which helped deliver an improvement in the sales trajectory for both ourselves and our retailer network”.
Prices for wholesale fresh and packaged food and groceries fell 1.9 per cent, an improvement on the 3.7 per cent decline over the same period last year.
Convenience sales rose 5.4 per cent to $762.9 million, while liquor EBIT dropped by 1 per cent to $29.1 million.
Adams said the recent announcement of a long-term lease for a new purpose built distribution centre in South Australia will help improve competitiveness of its SA retailers through delivery of “efficiency benefits and access to a greater range of products”.