Foodstuffs South Island Lim ited Annual Report 2011 Sum m ARy ...

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20 National Progress Report The year ended February 2011 proved to be a challenging one for the organisation, with the New Zealand economy recovering much more slowly than anticipated from the economic recession and international factors driving high commodity prices which, in turn, has fuelled food price inflation and an increase in operating costs in an otherwise flat market. The two Canterbury earthquakes provided additional challenges for our South Island Company. The combined wholesale turnover for the three Foodstuffs companies was $8.07 billion, up $89 million or 1.12% on the 2010 result reflecting the stagnant retail market conditions. During the year, new New World stores were opened in Mt Roskill, Waipukuarau, and Marton while major refurbishment projects were completed at New World Broadway, New World Levin, New World Wairoa, New World Rangiora, and New World Oamaru. New PAK’nSAVE stores were opened in Papamoa and Te Awamutu, and store refurbishment projects completed at PAK’nSAVE Mill Street in Hamilton, PAK’nSAVE Palmerston North, and PAK’nSAVE Kapiti, Paraparaumu. The companies continue to devote considerable energy to the regeneration of our Four Square heritage brand and this has translated to a busy store development programme for the group. New Four Square stores were opened in Papamoa, Ahuriri, and Foxton Beach while the store refurbishment programme included upgrades at Four Square Cloverlea, Four Square Patea, Four Square Kaponga, Four Square Eltham, Four Square Waterloo, Four Square BJ’s Waitara, and Four Square Lawrence. A new Henry’s Beer, Wine, & Spirits was opened in Greymouth, and five new fuel sites were opened – at PAK’nSAVE Mt Albert, PAK’nSAVE Tauranga, PAK’nSAVE Papamoa, PAK’nSAVE Te Awamutu, and New World Marton. New markets and extensions to existing markets provided an additional gross retail floor area of 22,720m2 . Nationally, at the end of February, Foodstuffs co-operative members operated 47 PAK’nSAVE stores, 132 New World stores (excluding the 3 New World stores in Christchurch which are being rebuilt after the Canterbury quakes), 278 Four Square stores, 148 On the Spot convenience stores, 19 Henry’s Beer, Wine and Spirit outlets and 37 fuel sites. The companies continue to make substantial investments in their wholesale business infrastructure. In the Auckland region, additional space was leased at the Wiri Foodstuffs Fresh Distribution Centre, increasing the facility’s capacity from 4,500 to 6,500 pallets. Foodstuffs (Auckland) Ltd shifted its ambient primary freight operations to this site. The conversion of the Company’s Gilmours branches to owneroperated businesses was completed and 8 member-owned Gilmours stores now service the non-member trade business. A major transformational project to increase business operational efficiency, called Project Lightning, was initiated to drive the adoption of more efficient business processes and enabling technologies across both the retail and wholesale business. The key focuses are making improvements in the effectiveness of buying operations, inventory management, and business analytics. Foodstuffs (Wellington) Co-op Society Ltd officially opened its Robert’s Line Distribution Centre on the 6th April 2010. This new facility has consolidated goods warehousing and manufacturing facilities for the Company and includes equipment for automated split-case picking. Stackflow machines, for mechanical milk crate picking, were installed at the Company’s Grenada and Mihaere Drive (Palmerston North) distribution centres to improve picking efficiency at those sites. The Company’s Silverstream warehouse was officially closed on 31 March 2011. In a major IT development, the Company deployed a new software application which analyses product sales to predict the optimal retail pricing for individual product lines. In February, Foodstuffs South Island Ltd announced the development of a new $45 million 25,000m2 . distribution centre to be built in Hornby, Christchurch, adjacent to the Company’s existing 13,000m2 . Hornby Distribution Centre. The plans include green energy and lighting systems, 11 metre high racking, and enhanced staff facilities. Construction commences late in 2011 for completion in late 2012. The existing Papanui Distribution Centre will be closed, and all Christchurch based distribution consolidated at the Hornby site when it is completed. The Company’s corporate headquarters will remain at the Papanui property. The Company is continuing the roll out of the SAP information technology platform to its retail stores and has completed implementation at 13 stores while another 35
stores are part-way through their implementations. The two Canterbury quakes lead to some disruption to the operations for the South Island Company, the temporary closure of most Christchurch stores and the Hornby ambient distribution centre and the longer-term closure of three New Worlds and a Four Square store. Operators, management, staff and suppliers demonstrated huge resilience and fortitude under pressure, and pulled together to resume near-normal services in a very short time. After the first earthquake of 4 September, the Foodstuffs South Island Community Trust distributed $55,000 of grocery vouchers to 140 staff of Foodstuffs and members who experienced hardship due to the earthquake. Following the more widespread devastation of the 22 February earthquake, sponsors and supporters rallied round with extra funding and, along with donations from Foodstuffs (NZ) Ltd and our Auckland and Wellington members’ quake-relief funding, contributions rose to more than $500,000. At the time of writing, the Community Trust had assisted more than 400 individuals with finance totalling just under $275,000. It is expecting an influx of earthquake related requests from community groups over the coming months. The companies’ joint primary freight initiative is progressing well. At year end FIN was providing primary freight services to 102 suppliers, an increase of 63 over the previous year. In recent years the three companies have worked more closely together on national marketing initiatives and this continued in the year under review. During the year, the New World group launched the “Different like You” brand campaign and “Cleverbaskets” to point customers to value buys. New World continued its association with the Silver Ferns International Netball series and ran another successful Eat Wise & Exercise promotion. National New World competitions included the highly successful Shop, Scratch, & Score competition and the “Great Car Give Away” in which every New World store gave away a Suzuki Swift car. National marketing collaboration will step up again in the 2011/2012 year with the appointment of a National Marketing General Manager. The companies also work closely together on e-commerce initiatives and are making good progress increasing the penetration of supplier transactions processed electronically via the Foodstuffs eXchange. Around 86% of suppliers are now using the eXchange for one or more transaction type and 65% of supplier invoices are now transmitted via the portal. The GS1net project continues to gain momentum and steps taken by the companies to align and streamline their supplier engagement processes has seen the roll-out of GS1net speed up. Other national projects included the adoption of unit pricing in retail stores and the redevelopment of Foodstuffs’ national websites, both now completed. The website projects involved upgrading of the retail brand sites, suppliers’ website, the development of an e-recruitment tool and the development of a supplier relationship management tool. Limited Foodstuffs (NZ) Limited, as the Island Federation Headquarters of the Soutn Foodstuffs Group of Companies, continued its role of co-ordinating Foodstuffs Annual Report 2011 21
Page 1: Foodstuffs South Island Limited Ann
Page 4 and 5: Robin Brown New World Rangiora Chai
Page 6 and 7: 4 About Us Foodstuffs South Island
Page 8: 6 Chairman’s Review On behalf of
Page 12: 10 Chairman’s Review (continued)
Page 16 and 17: 14 New World had a very successful
Page 18 and 19: 16 During what was once again a dif
Page 20 and 21: 18 Food for thought In October 2010
Page 24: 22 National Progress Report (contin
Page 27 and 28: Murdoch Manufacturing Paul Johnston
Page 29 and 30: Foodstuffs South Island Limited Gro
Page 31 and 32: Statements of Comprehensive Income
Page 33 and 34: Statements of Cash Flows for the ye
Page 35: New World Nelson 22 Blenheim 5 Kaik

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