Metcash shares are ripping higher again today.
The operator of IGA supermarkets has seen its share price jump 22% since it released its half-year results on Monday.
At the close, its shares were trading at $1.68, up another 13.5% from yesterday’s close.
IGA supermarkets are still under pressure from major and new players but they have narrowed their losses.
Discounting at Metcash’s IGA supermarkets saw underlying profit profit down 6.1% to $86.9 million for the first six months of the financial year.
However, investors are happy that sales aren’t as bad as they were.
Food and Grocery sales rose 0.7% to $4.54 billion. Metcash says the trend has improved from a negative 3.7%. Group revenue was up 1.4% to $6.6 billion.
Local supermarkets are under increasing pressure from new players, including Aldi, which have been aggressively moving into Australia markets, pushing supermarket shelf prices down.
The big two, Coles and Woolworths, report substantial price deflation. Both have cut prices over three months to September: Coles by an average of 1.3%, Woolworths by 1.82%.
Metcash CEO Ian Morrice says the company is still experiencing highly competitive trading conditions, with price deflation running at 1.7%.
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