Grocery group Foodstuffs New Zealand seems to be weathering the recession in reasonable shape with sales and profits for the year ended February similar to those achieved last year.
However, Foodstuffs (SI) chairman Robin Brown, of Rangiora, said the financial results contained in his report provided their own commentary on a difficult year.
It was a year which required the board, management and Foodstuffs members to adapt to rapid change as the local and global economies fell into stagnant and recessionary phases.
"In these adverse trading conditions, the co-operative has shown resilience."
Foodstuffs SI reported an operating profit of $174 million for the period, up 5.5% on the $164.9 million reported in the previous corresponding period (pcp).
Total revenue increased by 2.8% to $2.26 billion.
Rebates to co-operative members increased to $149 million from $145 million to give a profit before tax of $10.8 million, up from the $2.4 million in the pcp.
Foodstuffs SI paid nearly $10 million in tax, nearly double that paid in the pcp to give a bottom-line profit of $988,000 compared with a loss of $2.4 million last year.
Finance costs fell by $3 million in the period to $14 million because of lower interest rates.
Mr Brown said the South Island group was now concentrating on profit enhancement, aware that its success depended on its ability to shape the future by anticipating and responding to the changes and opportunities provided by the recessionary economic pressures.
"We have never been better positioned to capitalise on this economic situation as we strive to be able to take advantage of the inevitable upswing in the economy."
The retail banner groups had "solid years", with Pak'n Save being supported by the budget-conscious shopper while New World and, in particular, Four Square benefiting from increased travel costs which caused more shoppers to shop locally, he said.
To encourage the increase in local shopping, Foodstuffs had implemented a series of programmes which focused on store presentation and refurbishment in the principal banner group retail outlets.
In the food service sector, Trent Wholesale had traded well but there had been a significant fall-off in trade in the on-premises food and beverage sector.
"This has brought with it a significant increase in defaulting debtors and the need for extra vigilance when extending credit."
There were now 16 Henry's Beer Wine and Spirit outlets trading in the South Island with a further two set to join in the first quarter of the current financial year.
During the year, Liquorland was bought from DB by Foodstuffs Liquor Ltd.
The Liquorland operation would initially be run independently from the co-operative.
Foodstuffs (NZ) chairman Glenn Miller said the group had adopted a new alcohol policy to recognise its responsibilities as a major alcohol retailer.
In line with the new policy, Foodstuffs would not sell alcohol products below cost apart from the clearance of small quantities of obsolete or short-dated stock that would otherwise be unsaleable.
The change had taken into account the views of a range of stakeholders, including the Liquor Licensing Authority which believed that loss leading was contrary to the spirit of the Sale of Liquor Act.
