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

6
Chairman’s Review
On behalf of the Board of Directors
of Foodstuffs South Island Ltd, I
present to you the 23rd Annual Report
detailing our activities, highlights,
challenges and financial results
achieved for the year ended 28
February 2011.
During the reported period the aftereffects
of the recession were taking its
toll on all businesses and uncertainty
continued to plague the New Zealand
economy. The lacklustre economic
growth during the latter half of the
year was further compounded by the
Canterbury earthquakes, rise in fuel
prices and increase in GST which
placed an added burden on the
already fragile New Zealand economy.
Businesses had to re-evaluate their
situation to incorporate the effects of
the disaster. The cost of the two major
earthquakes will ensure that
financial restraint remains the norm
as New Zealand slowly recovers from
the recession.
The hospitality and food service
industry was particularly hard hit by
the recession which was even further
exacerbated by the Christchurch
earthquakes forcing numerous
businesses to close. Coming out of
the recession and the aftermath of the
earthquakes, the Co-operative strived
to place itself in the best possible
position to capitalise on future
opportunities available. Consequently,
in the year under review members
of the Co-operative devoted their
energies, amongst other things, to;
• ensuring the fundamental business
model and company strategy are
still sound,
• further investigation to improve the
visibility on margin management,
• managing the earthquake insurance
process and ensuing costs,
• training within banner groups to
improve the customers’ overall
shopping experience,
• dealing with changes in tax
depreciation rules and the
consequences thereof,
• realising the benefits of the
past investments in information
technology and investing in further
retail technology initiatives,
• refurbishment and expansions of
several retail properties,
• investment in the development of
logistics infrastructure, and
• streamlining SAP procurement
efficiencies.
The Board would like to congratulate
the Crisis Management Team (CMT)
and Foodstuffs South Island staff
for the professional manner in which
they conducted themselves after the
September 2010 and February 2011
earthquakes. The Team’s methodical
and solid approach was vital for the
Co-operative in order to navigate the
Company through these turbulent times.
In addition, the Board also recognises
the trying times our Christchurch
Members went through after each
earthquake and can only applaud our
Members in getting their stores fully
functional in such a short period.
The impact of the earthquakes on
Foodstuffs South Island was largely
mitigated due to a comprehensive
insurance programme. This meant that
despite the damage the Co-operative
and its Members suffered during the
September and February earthquakes
there was no significant financial
impact, as insurance fully covered all
costs incurred.
The Co-operative has once again
delivered a strong financial result
for the 2010/11 financial year.
Revenues increased despite
the disruption caused
by the Christchurch
Chairman
Robin Brown