CEO Doug Jones said the new financial year has started off well, but higher interest rates and cost of living pressures are biting.
delivered record annual sales and earnings despite facing increasing challenges in the final quarter from the rising cost of living squeezing Australian shoppers.
Shares raced ahead by more than 6 per cent to $3.81 each in early trade on Monday after the group topped analysts’ expectations. Total food revenue increased 2.8 per cent to $9.6 billion on a normalised basis, despite cycling elevated sales in the second half a year ago due to strong in-stock positions during periods of floods and rail disruptions. Sales were buoyed by wholesale inflation which averaged 7.6 per cent for the year, reaching a peak of 9.1 per cent in the third quarter.
“The impact of cost of living pressures and increased focus on value was seen in a flat average ‘basket size’,” he said.“While demand continues to be solid in all pillars, the impact of higher interest rates and cost of living has started to impact consumer confidence and the behaviour of some customers and shoppers in our retail networks.
“The ability to offset costs, that’s that’s always the challenge of any business in times like this, and we have a number of ongoing cost management processes as any good business would,” he said. Demand remained robust in DIY and trade sales, with trade continuing to be underpinned by a strong pipeline of construction activity and an improvement in supply availability. Inflation is still elevated in both DIY and trade, Metcash said.
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