Home' National Liquor News : NLN APRIL 2016 Contents 8 | APRIL 2016 NATIONAL LIQUOR NEWS
LOSS OF ALMOST $1BN
Supermarket giant Woolworths has reported a $972.7
million loss for the six months to 3 January 2016.
The loss is the first for Woolworths since it listed
on the Australian stock exchange 23 years ago and
was driven by a $1.9 billion tax write-down for the
failed Masters venture.
Total sales for the half year fell by 1.4 per cent to $32bn, while underlying net profit (excluding the write-downs) fell
by 33.1 per cent to $925.8m.
Chairman Gordon Cairns said: "We are rebuilding the Woolworths business. While we have made progress it will be
a three to five year journey and there is much to do.
"There is a lot of hard work ahead of us but we are very clear on our priorities and are confident we have the
leadership team to get us there."
There was better news for the Woolworths Liquor Group, with total liquor sales for the half-year increasing by 4.9
per cent on the same period in 2015. The company reported "strong growth" in Dan Murphy's and BWS, with the Dan
Murphy's loyalty program now having 1.3m members.
In particular Woolworths said that there was double digit growth from Dan Murphy's online. The company also said that it
plans to add five (net) Dan Murphy's stores and two (net) BWS stores in the second half of the financial year.
Overall the company reported that Australian food and liquor sales were $22.3bn, up 0.7 per cent on the same
period last year, but comparable sales decreased by 0.8 per cent.
CONSUMERS ARE CHANGING THEIR PERCEPTIONS TOWARDS LIQUOR STORES
Research from Roy Morgan has shown
that fewer consumers now believe that
'all liquor stores are about the same' than
they did in 2006.
In the 12 months to September 2006,
56 per cent of Australians 18+ who
purchased alcohol in an average four-week
period believed that 'all liquor stores are
about the same'. By September 2015, this
figure had fallen to 47 per cent.
Meanwhile, the proportion who agreed
that 'no single liquor store is best, but
two or three are better than others' rose
from 35 per cent to 42 per cent over the
same time period; and those who felt that
'one liquor store is the very best' went up
from six per cent to nine per cent.
This means that just over half
of all Australian alcohol buyers
believe that some liquor retailers are
better than others, a figure that, Roy
Morgan says, looks set to continue
rising as the proportion of ambivalent
Among alcohol-buyers who feel that 'two or three stores are better than others', 78 per cent nominated Dan
Murphy's, ahead of BWS (38 per cent), Liquorland (28 per cent) and 1st Choice (23 per cent).
Terry Mott, CEO of the Australian Liquor Stores Association, told National Liquor News: "The Roy Morgan
report confirms again that alcohol beverage shoppers are becoming more particular about where and how they
shop. The have a repertoire of several liquor stores where they will return regularly.
"High on their priorities for choice of store are of course perception of value and importantly convenience
of being close to home or where they do their other shopping, carrying the product range they want and staff/
customer service. The value perception is much broader than simply price, so retailers don't need to only focus
on trying to be the cheapest on everything, every day.
"These factors again highlight the opportunity for packaged liquor stores to focus on their local customers,
ensure the range matches their requirements and ensure they always have helpful, well trained staff -- not simply
shelf stackers or money collectors. Getting and holding the right staff and supporting them with sales and
product training is one area where our industry needs to invest, to ensure they can project the right balance to
their regular customers and attract new or occasional customers to grow profitably."
Wesfarmers Limited, the owner
and operator of the Coles
supermarket and liquor group,
has reported a net profit after tax
of $1393 million for the half-year
ended 31 December 2015.
The group's food and liquor
division recorded a sales revenue
increase of $937m to $16,469m,
which is up six per cent on the
same period last year.
Managing director Richard
Goyder said the result reflects
good momentum and that the
transformation of Coles Liquor is
"Food and liquor revenue
grew $937 million, driven by
investing benefits from operational
simplification and supply chain
efficiencies into better value for
customers and improvements in
service. The transformation of
Coles Liquor was further progressed
with encouraging signs, and over
the period included work on price
investment, range simplification and
store network optimisation. Despite
lower fuel volumes and average
fuel price, the convenience business
produced a solid result, supported
by strong growth in store sales."
Speaking at the results
presentation the managing director
of Coles, John Durkan said: "Our
customer-led transformation of
our liquor business is gaining
momentum and our results are
progressing in line with our
expectations. We have made
significant investment in price
reduction and range simplification
across our three brands and we will
continue to do more of this.
"In Liquorland we are
continuing with our store
renewal program. There are
now over 170 stores in the
renewed format. Customers are
responding positively to our
initiatives, we have a higher
conversion of Coles supermarket
customers, improving customer
satisfaction scores and transaction
growth. However there remains
significant opportunity for further
"At First Choice we still have a
long way to go and we're trialling
potential new renewal formats."
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