Metcash’s IGA supermarkets are not just holding their own in a tough retail climate, they are clawing liquor market share from Coles Group and Endeavour Group’s BWS. Sharper pricing across IGA stores is helping attract budget-conscious shoppers who are trading down but still want choice.
Hardware brands Mitre 10 and Home Hardware are also edging ahead, giving Metcash a broader base of growth. That combination of supermarket, liquor and hardware strength is doing a lot of heavy lifting.
Profitability still depends on cost discipline, and Metcash is cutting expenses to offset ongoing inflationary pressure across its network. Most of the expected job losses sit within the hardware division, where integration and efficiency drives tend to bite hardest.
Metcash has not disclosed how many roles will go, keeping the scale of the restructuring under wraps. Cost savings and efficiency programmes remain central to its playbook, even as demand holds up.
An unexpected bright spot is tobacco, a category that has been hammered by illicit trade and shrinking volumes for years. Authorities have stepped up enforcement against illegal tobacco operators, and that crackdown is slowing the pace of legitimate sales declines.
Metcash is now seeing signs of stabilisation rather than the steep falls of recent years, which supports revenue at the margin. It is a small but meaningful shift in a long-troubled category.
In its latest trading update, Metcash guides to underlying profit after tax of $268m to $270m for the year ended April 30, compared with $275.5m previously. That slight dip comes in what the company describes as a challenging market, yet it still frames the result as proof of portfolio resilience.
Savings initiatives and tighter execution across supermarkets, liquor and hardware are cushioning weaker spots. The tension between cost cutting, job losses and operational strength is set to define how Metcash navigates the next phase of consumer pressure.
