Metcash-supplied independent supermarkets rewarded by cross shopping

Metcash boss Doug Jones believes independent chains are winning from the rise of ‘cross shopping’ by budget-savvy consumers, who are visiting different retailers to fill their shopping baskets.

Metcash CEO Doug Jones. Picture: Ben Symons

Metcash boss Doug Jones believes independent chains are winning from the rise of “cross shopping” by budget-savvy consumers who are visiting many more different retailers to fill their shopping baskets.

The ASX-listed supplier of food, groceries and liquor to thousands of independent supermarkets and bottle shops around the country is bulking up its infrastructure to cope with the rising demand.

Its new $300m facility in Victoria is the largest single-level distribution centre in Australia.

The equivalent in size to about six Melbourne Cricket Grounds or 12 soccer fields, the new Metcash DC in Truganina on the outskirts of Melbourne will service more than 4000 independent stores, premises and wholesale customers in Victoria and will stock products from more than 1900 suppliers.

“We are extremely pleased to see this major infrastructure investment delivered for our independent retailers and Victorian shoppers,” Mr Jones said.

“This world-class facility will further enhance the networks’ differentiated offer and relevance for Victorians, while also providing significant benefit for local suppliers.”

The new Metcash DC re­places its previous facility at Laverton, Victoria.

The nation’s supermarkets are on a spending spree when it comes to new distribution facilities, with Coles announcing this week it would spend $880m – on top of $1.4bn already spent – on building a new automated DC, also in Truganina.

The new Metcash distribution centre in Melbourne.

Unveiling Coles’ quarterly sales update this week, chief executive Leah Weckert also noted the record levels of cross shopping in Australia, with consumers visiting several stores to fill their baskets to get the best value and lowest prices.

A Coles survey showed 95 per cent of consumers shopped at three to four retailers to complete shopping lists.

Ms Weckert said levels of cross shopping were the highest she had seen in her retail career and greater than that in the US or Britain.

Mr Jones told The Weekend Australian: “Customers are looking for value and they are shopping around. You have heard both of our large competitors talk about that this week, it was good to hear both of them talk about how shoppers are visiting multiple stores.”

He said Metcash and its supermarket independents, as well as its hardware chains such as Mitre 10 and Total Tools and its liquor banners, were “absolutely” winning from the rise of cross shopping.

“Customers shop more often, and that’s what we are seeing.

“But the most important thing is that customers keep IGA, Mitre 10, Bottle-O and Cellarbrations in their repertoire, and they see that channel presents them with real value.

“And we’re not just resting on our laurels, we are working incredibly hard to make sure that remains true.”

Mr Jones said he had been witnessing higher levels of cross shopping for at least two years.

“We play a role providing value to shoppers across the repertoire of shopping missions that they have.”

Originally published as Metcash-supplied independent supermarkets rewarded by cross shopping