IGA picks up more foot traffic as more Australians shop local
By Jessica Yun
Australian shoppers’ willingness to spread grocery shopping across different retailers is helping IGA pick up more customers, with the independent grocery chain’s operator Metcash promising “honest value” across food, liquor and hardware.
Metcash chief executive Doug Jones said customers shopping around were happy to look beyond the major players – Woolworths, Coles and Aldi – for everyday items.
“[Customers will] visit one of the main supermarkets, [then] they’ll visit their local IGA. What’s really pleasing, and we see it in the foot traffic, is that they continue to include IGA and the independents in their repertoire,” Jones said.
IGA operator Metcash’s chief executive Doug Jones.Credit: Ben Symons/The Photo Pitch
While declining to comment on the lawsuit brought by the competition watchdog against Woolworths and Coles for allegedly “illusory” discounts, Jones said a growing proportion of shoppers were looking for promotions and buying discounted groceries.
“The reality is that over a period of time, shoppers know what the right price to pay for certain items is, and they’ll be looking for that trust in the retailer. We just want to provide them with good, honest value, and that includes great prices,” he said.
Metcash’s total food sales excluding tobacco rose 18.8 per cent to $4.2 billion for the first half of the 2025 financial year. Private label sales rose 9 per cent, with customers buying more discounted items than they used to. Group revenue rose 8.1 per cent to $8.5 billion and statutory profits after tax lifted 0.6 per cent to $141.8 million.
Investors cheered the update, sending Metcash’s shares 4.5 per cent higher in the late morning before settling 2.2 per cent stronger at $3.19 at the close.
IGA has a price-match program to compete with the major supermarkets, co-funded by the supplier and Metcash. While it has closed the price gap in many of its large-format stores, Metcash Food boss Grant Ramage told the ACCC supermarket inquiry last month that prices at smaller convenience stores were unlikely to be on par with the major supermarkets.
Jones said gaining market share, which currently sits somewhere between 8 and 10 per cent for an IGA, was not a zero-sum game and the stores did not need to be a one-stop shop destination for shoppers.
ACCC supermarket inquiry hearings in November: (from left) Metcash’s Group CEO Doug Jones, Metcash Foods CEO Grant Ramage and and Metcash executive general manager, merchandise, Estella Young.Credit: Screenshot
“We don’t need shoppers to turn their backs on Coles, Woolworths and Aldi and exclusively shop with us. We provide them with relevant and credible solutions to some of their needs.”
Jones was one among many supermarket executives called to front ACCC inquiry hearings held over the past fortnight in which Woolworths executives rejected the notion that the retailer was engaging in land banking.
Jones said he was surprised by Woolworths’ claim.
“They use the term strategic sites; that’s great, and I’m sure they are strategic. I want to be clear, they haven’t broken any rules; there aren’t laws and regulations against land banking, and we’re not accusing them of that,” he said.
“But there are instances where sites are acquired and not developed, and then they can’t be acquired by independents.”
Liquor sales were a key highlight of Metcash’s results, growing by 2.1 per cent to $2.5 billion over the past half-year as shoppers turned to local bottle shops.
In contrast, Dan Murphy’s and BWS owner Endeavour Group recorded zero per cent growth in sales during the first quarter of the 2025 financial year. Coles recently commenced a trial to axe its Vintage Cellar and First Choice brand banners as it seeks to ramp up alcohol sales.
“What you’re seeing around the world is that shoppers are prioritising convenience. They’re time poor … we’re certainly taking advantage of that long-term trend,” Jones said.
Metcash intends to grow its national store footprint, currently at over 1300, by about 20 stores every year.
“Any market share losses we’ve experienced in the last 24 months are really as a result of not opening as many stores as the competitors,” said Jones. “It’s well ventilated how difficult and how costly it is as an independent retailer to open stores up against the majors.”
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