Metcash spells out its revival plans
Metcash this week held an Investor’s Day where revival plans were outlined for the struggling grocery wholesaler which supplies IGA stores.
Metcash has been feeling the heat from Coles, Woolworths and Aldi but the company is trying to remain positive with its ‘Diamond’ IGA stores showing early success.
IGA stores following the Diamond platform sign up for major refurbishments and address issues including pricing and fresh produce availability.
Diamond stores have already seen increases in customer satisfaction and customer sales. Total retail purchasing went up by 15 per cent at these stores.
Metcash spelt out further business-wide plans :
- More fresh produce: All stores should be concentrating on selling a wide range of fresh produce.
- Private label focus: Similar to Aldi, Coles and Woolworths, Metcash will be increasing its focus on private label offerings. In the 2017 Financial Year it wants to introduce a mid-tier private label offering. This would be an alternative to its current budget ‘Black & Gold’ line.
- Community focus: Metcash wants to continue to communicate that IGA stores are apart of the local community in which they are located in.
- Increase ‘Diamond’ stores: By the 30 June 2016 Metcash plans to have 100 stores signed-up to its ‘Diamond’ format. It wants even more stores to join the format in 2017.
Metcash said that liquor sales have dropped across its network, which includes Cellarbrations, Bottle-o and IGA Liquor, due to an increasingly health conscious public. The retailer however said there was opportunity to bounce back because of a growing interest in premium alcohol.
The company said that private label alcohol and control brands were key and that store growth, category management and brand development will be areas of concentration for the 2016 financial year.
Mitre 10 stores have been able to develop a point of difference with ‘stores within stores’ offering exclusive ranges from companies such as Stihl.
The chain has also been able to better compete on price with private label offerings matching Bunnings and being promoted on the popular renovation TV program, ‘The Block’
- Good relationship with tradespeople: Mitre10 wants to maintain a strong relationship with tradespersons including continuing to meet their special needs. This includes providing quick order turn arounds, early openings, easy drive-through access, storing wood under cover and extras like coffee
- Store growth: Network growth is also a focus for the 2016 financial year.
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