Liquor sales have surged for Metcash in the new financial year, up 5.5% overall and 15% for customers not impacted by trading restrictions.
“In the liquor pillar, sales for the first seven weeks of FY21 increased 5.5% despite customers in New Zealand and ‘on-premise’ customers in Australia being impacted by COVID-19 trading restrictions," Metcash noted in its 2020 Annual Report.
“The increased in sales for the first seven weeks of FY21, excluding those customers impacted by the trading restrictions, was around 15%."
Group CEO Jeff Adams said liquor sales had benefited from an increased preference for "more local neighbourhood shopping".
"This was reflected in a 3.2% increase in ‘like for like’ sales in our IBA banner group in the year," he noted in the annual report.
Metcash said it was focused on managing through the changed external environment while also progressing its strategic initiatives including private label and accelerating the roll-out of its new ‘Shop My Local’ online offer across the network.
Adams said Shop My Local was launched it six months ahead of schedule to provide an option for customers not wanting to physically shop in store.
"This was an outstanding effort by the Liquor team," he said. "Significant efforts were made to assist many of our New Zealand and Australian ‘on-premise’ customers who found themselves in difficult situations due to the shutdowns. We received very positive feedback from these customers, and it is another great example of living our purpose of championing the success of our independent retailers."
In May, IBA reported its liquor retailers were already celebrating bigger basket sizes and a premium brand boom via Shop My Local.
Raff Palermo, Head of Digital Commerce & Loyalty, said: “Our current online basket size is three times the normal basket value.”
Wine and Champagne comprised 50% of the liquor sales, “fuelled a little by Mother’s Day activity”.
“Moet & Chandon is one particular brand in this category that has been noticed and popular, but as we speak a number of red wines are being searched as it is getting cooler,” Palermo added.
“Spirits is roughly around 30% and beer around 20%. Interestingly, browsing and enquiries are skewing to more premium offers, as shoppers have the time to research and discover something new. In saying this, popular and well known brands will always be at the fore.”
Private label push
Metcash also recently expanded its private label offering with the acquisition of the Kollaras private label portfolio.
Liquor CEO Chris Baddock said: “The acquisition of the Kollaras Trading Company branded business in Australia and New Zealand includes the ownership of brands such as Two Truths and Seahorse Bay, plus taking on the exclusive supply of imported brands such as Mr Boston Bourbon and Molly’s Irish Cream.
“This acquisition is consistent with ALM’s purpose to champion successful Independents, which includes a strong focus on growing private label; ensuring that ALM has full control over this portfolio, which offers consumers great quality and value as well as growing margin for our retail partners.”
Adams added in his CEO report: "Investment in private label is important to support our retailers in providing consumers with everyday value, particularly in the current economic environment."
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