Woolworths "nail" FY13 results

Woolworths announced its FY13 results on Wednesday, reporting sales up seven per cent across the liquor portfolio through in-store, its ALH venues and online.

CEO and managing director Grant O'Brien said the "better than expected" performance was driven by the strategic priority to extend market leadership.

"We needed to nail our advantage in liquor and we've done that this year", O'Brien said, referring to a growth in market share over Coles.

Director of liquor Brad Banducci pointed to the implementation of the "multi-option liquor model" and new additions such as same-day delivery leading to "six ways to shop with us" by the end of October.

"We've segmented our business by the type of customer we're going after, from connoisseur down to bargain-hunter."

Cellarmasters led the "double digit" sales growth online across the Woolworths liquor websites stable, with a rebranding of premium site Langton's to follow.

Meanwhile, the 75 per cent Woolworths-owned ALH grew almost 20 per cent in the 2013 financial year, despite a new regulatory environment in Victoria impinging on operations.

Banducci also cited the re-badging of Woolworths Liquor to BWS as a driving factor for good results, allowing for greater definition of BWS' place in the market.

"As our convenience brand, BWS is much more focussed on the value segment of the market," said Banducci, explaining that the closure of 24 BWS stores offsetting the 38 openings demonstrates the company's doctrine to "be very disciplined in the convenience space."

The acquisition of Gage Roads Brewing brand Sail & Anchor was also indicative of targeted marketing, with Banducci eyeing the "value range" between "classical and traditional beers and craft".

O'Brien and Banducci both spoke of the interdependence of ALH and the company's liquor channels, calling the relationship "critically important to the Dan Murphy's strategy".

Nationally 68 Dan Murphy's and 458 BWS stores are located on or associated with ALH sites.

O'Brien, meanwhile, branded ALH's year a "transformational" one, due to the changing Victorian gaming regulations and new acquisitions.

Nevertheless sales increased 19.7 per cent to $1,469 million in 2013, and EBIT up 32.2 per cent to $263.7 million, aided by marginal decreases in CODB (Cost of Doing Business).

The boost in sales was driven by "improved performance in food", O'Brien said, which compensated for soft on-premise bar sales.

The ALH group's portfolio swelled to 326 hotels in 2013, courtesy of the acquisition of 34 new hotels from the Laundy group adding to a previous buyout of Compass Hotels.

Source: The Shout, 30 August 2013