Factors including lower earnings in liquor have led to underlying profit after tax for Metcash to decrease 5.9% to $126.7 million in the first half of FY26.

Liquor EBITDA was 4.8% lower at $55 million and EBIT declined 11.4% to $43.5 million reflecting the contribution from the business’ positive trading performance being more than offset by the impact of one-off strategy costs of $1.5 million, lower wholesale price inflation on strategic buying and higher labour costs.

However, Metcash siad continued preference for convenience, quality and the value in independents’ differentiated offer helped drive sales growth in a more challenging market.

Total liquor sales increased 1.4% to $2.6 billion, reflecting market share gains in Australian packaged liquor and an acceleration in wholesale sales to on-premise customers.

Beer and RTDs were the strongest growth categories, which Metcash said reflected cost of living pressures and shopper focus on value.

The first half included renewal of the Liquor Stax contract for a further 10 years and the Redcape Group (54 stores) became a member of the IBA retail banner group. The business also completed the acquisition of Steve’s Liquor Warehouse group in mid-October.

Group CEO Doug Jones said: “In liquor, the benefits of our diversified channel strategy led to sales growth in a more difficult market. Shopper preference for the convenience, quality and value in the independents’ offer underpinned further market share gains in the half.”

Trading outlook for second half

Metcash said liquor sales were flat in a more challenging market. However, wholesale sales to on-premise customers accelerated, underpinned by further recovery in this segment.

“On the back of decisive action taken over the last five years to both improve the core of our business and to position the Group for future growth, Metcash remains well set for ongoing success with a stronger, more diversified and more resilient business and with significant opportunities for accelerating growth,” Jones said.

Why independents are winning market share