SYDNEY, AAP – Food and grocery distributor Metcash, which supplies the IGA supermarkets network, has lifted its first half profit as more people shopped local during COVID-19 lockdowns.

Net profit rose three per cent to $128 million, while underlying pre-tax earnings expanded by almost 14 per cent to $231.2 million in the six months ended October.

“This is a significant achievement given the many challenges in the half, including staff isolations, labour shortages, supply chain issues, continuously changing health regulations and other lockdown related impacts,” CEO Jeff Adams said on Monday.

Metcash cited a preference for local neighbourhood shopping and a shift from cities to regional areas as supporting a rise in sales of 1.3 per cent to $7.2 billion.

The sales momentum is forecast to continue into the second half, particularly for food and liquor in the build up to Christmas and New Year.

Shareholders will be paid an interim dividend of 10.5 cents per share, up 31 per cent of the previous corresponding half year.

While the IGA brand is owned by Metcash, the stores are independently owned. IGA ranks fourth amongst the big supermarket chains behind Coles, Woolworths and Aldi, in revenue terms.