GROCERY and liquor merchant Metcash is on track to boost its profits by selling more fresh foods to its supermarket customers and doubling the number of budget-priced private label goods it offers to them.
The company is also looking at other opportunities to expand, perhaps even into areas beyond supplying supermarkets, bottle shops and convenience stores.
But chief executive Andrew Reitzer was coy about what sort of purchases he was considering.
"There are very good businesses which are in serious trouble," Mr Reitzer said yesterday at a briefing to announce the company's half-year profit.
"There are a number of projects we have on the go … and it's not the time to do the kill yet."
Mr Reitzer said he was planning to capitalise on shoppers' tight budgets by adding 975 new products to its Black & Gold line over the next year, which will be sold at more than 2000 independent supermarkets trading under the IGA and Foodworks banners.
Mr Reitzer was also aiming to relaunch the "IGA Signature" private label brand through IGA supermarkets and expand it to 600 products by June next year.
The Signature brand is pitched to shoppers as comparable to a branded product but at a shelf price 10 per cent lower than its peers.
Woolworths and Coles also have been pushing their house brand products, with Coles stocking 400 products in its private label line.
Coles plans to add 1100 new private-label products and hopes they will ultimately make up 35 per cent of total sales.
Sales of Black & Gold products to IGA and Foodworks had grown faster than those of other groceries, Mr Reitzer said.
Prices of Black & Gold products were pegged to those at discount store Aldi, he said.
Overall sales of private label goods now made up 12 per cent of all Metcash's grocery sales, up from 9.5 per cent to 10 per cent over the past two years.
Mr Reitzer said he believed shoppers would fill their trolleys with more private label goods for the next two to three years as their purse strings tightened.
Metcash said it was on track to boost its sales of fresh foods to supermarkets from $566 million last year to $1 billion this year.
As part of plans to build a national network of fruit and vegetable, meat and bakery wholesalers, Metcash bought Victorian wholesaler Rainfresh last week.
So far the company has spent $24 million of its $80 million budget on buying wholesalers.
The company yesterday posted a net profit fall to $80 million for the first half, down from $86 million this time last year, as a result of ending an interest-rate hedging deal.
A 10c interim dividend will be paid on January 8. Shares in the company yesterday closed up 15c, or 4 per cent, at $4.15.
