Hardware outlook hopeful despite slow start
Retail wholesaler, Metcash, has experienced a slow start to the 2020 financial year in the hardware space – offset by sales growth in its food and liquor streams – but the chairman has maintained confidence in the group’s five-year strategy, according to a recent Australian Financial Review report.
Metcash said total hardware sales in the three months ended July 2019 declined 4.4 per cent compared to the same period in 2018.
“Sales through the first quarter of the 2020 financial year are lower than the corresponding prior year period, reflecting the loss of a major customer in Queensland and a slowdown in trade sales,” the company said in the Australian Financial Review report.
Stripping out the major customer loss, total sales were still down 2.8 per cent compared to the 2018 period.
Meanwhile, total food sales for the three months ended July 2019 were up 0.6 per cent compared to the same period in 2018, and total liquor sales were up 0.7 per cent, according to the report.
The wholesaler provided the trading update to the market on Aug 28, as part of its annual general meeting presentation. The company’s share price fell on the news, down 1.41 per cent to $2.80 in mid-morning trade.
Chairman Robert Murray is expected to tell shareholders at the AGM that challenging markets remain, but Metcash is focused on improving quality and competitiveness of its independent retailers, according to the Australian Financial Review.
The company presented its “MFuture” five year strategy to investors at a strategy day in March, which has a strong focus on cost cutting.