The IGA and independent grocery route

At Coles or Woolworths, one buyer decision puts you in hundreds of stores at once. The independent grocery route inverts that. Metcash, the wholesaler that supplies the IGA network, can put you in the warehouse, but no head office can put you on the shelf, because no head office owns the shelves. Every IGA store is an independent business, and per Metcash's April 2024 submission to the ACCC Supermarkets Inquiry, each owner sets their own prices and makes their own ranging and shelving decisions.

The scale is real but modest. According to the ACCC's Supermarkets Inquiry final report (February 2025), Woolworths holds 38 percent of national supermarket grocery sales, Coles 29 percent, ALDI 9 percent, and the independents Metcash supplies about 7 percent. Metcash's own submission cites IBISWorld estimates, excluding tobacco, of 6.5 percent. Call it six to seven cents of every grocery dollar.

That share undersells the footprint in places. The same ACCC report notes that very remote areas are less likely to have an ALDI, Coles or Woolworths and are typically served by an independent supermarket, often supplied by Metcash. If your category over-indexes regionally, this channel reaches shoppers the chains do not.

Metcash is the largest grocery wholesaler to the independent supermarket sector, and the ACCC's final report (February 2025) found it faces no comparable wholesale competitor. The only other full-line grocery wholesaler on the eastern seaboard, SPAR, supplies roughly 300 stores from a single distribution centre against Metcash's five major distribution centres plus regional ones, and the ACCC concluded SPAR is not a viable alternative for many independents. For practical purposes, the warehouse conversation is a Metcash conversation.

The network behind it: Metcash told the inquiry it supplies over 1,600 grocery stores, comprising 1,299 bannered IGA stores as at March 2024, excluding Tasmania which is served by Tasmanian Independent Retailers, plus approximately 300 other retailers including third-party banners such as FoodWorks. On the supplier side, the ACCC final report records supply arrangements with approximately 2,700 suppliers covering roughly 27,000 SKUs. You would be one line among 27,000, which is an argument for arriving with a case, not a carton.

IGA itself is a banner, not a retailer. Metcash licenses the brand to independently owned stores and provides marketing and promotional support, per its submission. The formats vary widely: the submission's own breakdown is 252 large IGA and Foodland stores, 644 medium IGA stores, 399 small IGA Local Grocer stores and four price-focused Supa Valu stores. A range that suits a large Foodland will not all fit a Local Grocer, so build your pitch by format, not by banner.

There are three supply routes into these stores, per Metcash's submission to the ACCC. First, warehouse supply: Metcash buys your product into its distribution centres and stores order it from the catalogue. Second, charge-through: you deliver direct to store, but the invoice runs through Metcash, which keeps the store's accounts consolidated. Third, fully direct: you sell to the store and deliver to the store, with Metcash nowhere in the transaction.

The weighting matters. Roughly 74 percent of all IGA purchases flow through Metcash, per its submission, later confirmed in the ACCC's final report, while 50 to 90 percent of fresh is sourced outside Metcash, often from local producers. So fresh and short-shelf-life brands routinely start direct, store by store, while ambient grocery at any scale usually needs the warehouse. Metcash's FY25 results presentation (year ended 30 April 2025) cites Chobani moving from direct-to-store delivery into Metcash's distribution centres in April 2025, which is the standard trajectory: prove demand direct, then consolidate through the warehouse.

One structural quirk to understand before negotiating: Metcash states it does not make a wholesale margin on resale of goods. It passes its purchase price directly to retailers and earns revenue principally through trading terms negotiated with suppliers, per its ACCC submission. Translation for your model: the negotiation is not about Metcash's markup, it is about your trading terms, and they behave like trade spend. Model them the same way, before signing.

IGA retailers are not obliged to buy exclusively from Metcash, so they can range to local demand, and Metcash's submission notes they support local and regional businesses that the national chains often do not list. That is the structural reason this channel works as a proving ground: a store owner can say yes this week to a product a chain buyer will not look at until the next range review, and reviews come around roughly every six months.

There is also more branded shelf to win. Private label accounts for about 7.2 percent of Metcash sales, against at least 24 percent at Woolworths and 28 percent at Coles, per Metcash's ACCC submission. Proportionally more of an independent shelf is open to branded and challenger products.

And the channel generates the evidence the chains ask for. Metcash's FY25 results presentation reports IGA like-for-like scan sales up 2.7 percent excluding tobacco for the year ended 30 April 2025, based on scan data from 1,122 IGA stores. Scan data exists in this network. Six months of real velocity in fifty independents is a rate of sale argument a chain buyer can defend at review. A projection is not.

None of the usual arithmetic is waived. Trade spend commonly runs 10 to 25 percent of gross sales, retailer margins sit at roughly 25 to 45 percent depending on category, and chargebacks for non-compliant deliveries typically run 1 to 5 percent of invoice value. After a win, the first purchase order still typically lands one to six months later, and you fund the gap. What changes is the shape of the revenue: many small orders across many stores rather than a few large ones, which raises the administration load per dollar earned.

Be honest about the channel's trajectory. The ACCC found Metcash-supplied independents have been losing market share over time nationally, and Metcash's own submission shows net IGA store numbers fell from 1,455 in FY15 to 1,299 in FY24 despite 360 new openings and re-bannerings over the period. The most recent year looks steadier, with net store growth of 9 stores and independents' share maintained, per the FY25 results presentation, but plan on a stable channel, not a booming one.

The environment punishes loose modelling everywhere: 871 Australian retail businesses hit insolvency for the first time in FY25. A hundred independent accounts on unmodelled trading terms can sink cash flow just as surely as one chain account. This route is more forgiving on entry, not on arithmetic.

Sequence it. If you are fresh or chilled with local supply, start direct with a handful of stores and build scan evidence. If you are ambient, prepare the Metcash pitch the way you would prepare for a chain range review: pricing waterfall, trading terms model, promotional plan, straight answers on supply. Either way, the decision is never yours to promise. The Metcash category team decides the warehouse, and each store owner decides their shelf.

If you want the numbers modelled before you commit, that is what the Retail-Readiness Sprint is for: a fixed fee of $15,000 for a single retailer scope or $25,000 across multiple retailers, about four weeks, covering your trade spend model, pricing waterfall and compliance gap list, with the independent channel weighed against the chains. The Sprint is indicative and does not guarantee ranging. Built for Retail has ranged brands across Australian retailers as the agent, and past rangings never promise future ones. In this channel especially, the shelf is won one owner at a time.