Metcash – the publicly traded parent of IGA, Cellarbrations and Miter 10 – said it was making “good progress…on a wide range of digital initiatives” across its retail brands, with online sales up 140% for the full year, although down from a low base.
Group CEO Doug Jones told investors during his 2022 annual results that “it’s true to say that we started late [on digital] but [adoption] has been boosted by Covid”.
Jones provided an update on digital progress across the group’s brands.
He said that 190 IGA supermarkets are now online on the IGA Shop Online platform, “which implies that more than 90 have registered” since November last year.
“This means we are confident of reaching the target of 800 IGA stores on the platform by FY25,” he said.
IGA Shop Online directs orders placed online by eligible customers to the nearest IGA store for fulfillment.
Jones said Metcash “will continue to invest in the platform” in “a sensible and deliberate way, by continuing to work with partners, we maintain the pace of growth while controlling costs.”
Metcash also announced the continued rollout of new e-commerce platforms in the food and alcohol networks.
It also said that online sales through its digital platforms in Independent Hardware Group (IHG) and Total Tools now account for about 6% of total network sales in the hardware division.
“The food and beverage teams will continue to work and learn from IHG and especially from colleagues at Total Tools,” Jones said.
“As you can see, hardware is a leader in e-commerce, digital engagement, and loyalty.
“They achieved this through wise investments in practical tools, which resulted in increased traffic and improved conversion through more relevant and personalized engagement and expanded online offerings.”
Jones added that wholesale brand Campbells will launch an e-commerce pilot called CampbellsPlus in July to expand its services “beyond their warehouse range by connecting buyers and sellers online.”
Jones also provided a brief update on the company’s technology transformation program, Project Horizon, which will reset Metcash’s core technology when completed.
“This project has two key focus areas,” he said.
“First, we are replacing, de-risking and modernizing our core systems. We will do this in order to reposition Metcash as a modern, technology-driven wholesaler by replacing our legacy systems with a Microsoft Dynamics 365 ERP platform integrated.
“Second, we aim to significantly improve our processes and do so through standardization and simplification so that it is easier to do business with us.”
Jones said Metcash has now “finalized the scope” and extended it to a few areas, including the Campbells outlet.
“We are doing this to build a more stable business for [Campbells] and better integrate it with Metcash to reduce future integration costs,” Jones said.
Jones added that since going live with its basic financial module in November, Metcash “has completed the first financial year under this system.”
The company also completed its first stage scope which was “advanced to accelerate internal work efficiency”
“Now that we’ve chosen Dynamics 365 as our integrated solution, it’s great to work closely with Microsoft,” Jones said.
“We have a good, solid partnership with them and they continue to integrate key features into their main releases.
“It’s relevant because this platform approach has already enabled our IT team to upgrade to the latest version.
“This demonstrated the robustness of the solution design. It also gave us the flexibility to adopt new features and functionality as they are delivered by Microsoft without downtime or additional investment. »
New Truganina DC
Metcash also announced that it has signed a long-term lease with Goodman Group to build a wholesale distribution center in Truganina, Victoria.
The new center will replace an existing facility in Laverton.
It will house products for the food and alcohol divisions and will be equipped with automation suitable for the company’s retail networks.
The new center will cost $70 million, of which approximately $20 million will be committed in FY23.
Construction is expected to begin in the first half of FY23 and be completed in mid-2024.
Jones said the center “will give us additional capacity across a wide range of categories.”
“It will provide improved service to our on-site retailers and customers, as well as better drive-to-market service for our suppliers,” he said.
The company announced that its underlying after-tax profit rose 18.6% to $299.6 million, while its after-tax statutory profit rose 2.7% to $245.4 million. .