The building (especially housing and renovations) slowdown continues to grab leading retail chains.
Shares in independent grocer (IGA) and hardware group (Mitre 10) Metcash have dipped 3% to a day’s low of $2.75 yesterday after the annual meeting was told that growth in the hardware division had slowed in the first quarter which ended July 31.
The company blamed the 4.4% drop in hardware sales in Mitre 10 in the quarter on sluggish trade sales and the loss of a big Queensland customer in the company’s Home Timber and Hardware wholesale division.
Food sales were up a tiny 0.6% when compared to the first quarter of 2018-19. “While the market remained highly competitive, there was a continued improvement in the sales trajectory through the first quarter of FY20,” the meeting was told
Supermarket wholesale sales, excluding tobacco, dipped 0.5% compared to the same quarter last year.
The meeting was told that a move to “premiumisation” of liquor consumption marketing to that trend, had helped the company’s liquor division, which include Cellarbrations and Thirsty Camel, to grow sales 0.7% compared with the same quarter a year ago.
“While our markets remain challenging, we are encouraged by the confidence of our independent retailers in the future and their willingness to continue to invest in their stores,” chairman Robert Murray told the annual meeting
“Together, we are improving the quality and competitiveness of our retailer networks across supermarkets, liquor, and hardware to underpin their ongoing success.”
The shares ended at $2.74, down 3.5% in a wider market that was up on the day.
