Victoria stands out as a problem market for Metcash, where heavy retail crime, a weak economy and higher state taxes keep the region trailing other states.
Sales across the group softened in May as households wrestled with rising fuel costs and mortgage repayments, squeezing already cautious consumer budgets.
By June, Metcash started to see early signs of shoppers returning and spending a little more freely.
Metcash, which supplies and supports banners such as IGA, Foodland, Mitre 10 and Total Tools, leans heavily on discretionary categories within everyday food and grocery spending.
Those offers give independent retailers more flexibility to chase value-conscious shoppers, especially when household budgets start to stabilise.
The group’s product mix is positioned to capture spend that moves back from extreme bargain hunting towards more considered choices.
That structure helps Metcash react quickly as demand recovers.
A tougher stance on illegal tobacco has also become an unlikely tailwind, as police pressure on organised crime selling illicit cigarettes pushes customers back to legal, tax-paid products in Metcash-aligned supermarkets.
That enforcement shift reduces unfair competition from under-the-counter operators and restores some lost foot traffic to legitimate stores.
At the same time, Metcash has been aggressively closing its long-standing price gap to Woolworths and Coles, narrowing it to about 2.1% for some of the largest IGA outlets.
In certain locations, the difference between Metcash retail banners and the major chains is now closer to just 1%, making independents far more competitive on everyday prices.
