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Foreword@ CountdownWe put the customer first.We work together tosafely do a great joband feel valued.We are passionate aboutwho we are, where welive and are active inthe community.Note1FY 2012.


Grocery retailing in New Zealandhas changed significantly sincethe first Foodtown supermarketopened its doors in 1958.Today we are a commercially successfulenterprise with growing earnings andmarket share. But this is no longerenough. We are also a responsibleretailer, taking leadership positions onissues such as ethical and sustainable food sourcing, environmentalsustainability, and health and safety in the workplace.Since announcing our plans to invest $1 billion in our stores in 2009,we have significantly grown our network and reach. With new storesand the consolidation of our former Foodtown and Woolworthsstores under the Countdown banner, New Zealanders now have159 Countdown supermarkets nationwide – offering a great range,low prices and an enjoyable shopping experience.With all the new stores and refurbishment, we have broughtnext-generation supermarket design to New Zealand. Newfeatures include wider aisles, expansive fresh food departmentsand a wide range of environmental initiatives to help reduce thecarbon footprint of our stores.We expect to open eight new Countdown stores and refurbish 13 thisyear 1 . That will help us to serve our customers even better and caterfor growing communities.This is an exciting time for our business, and we are committed tokeep setting new standards for supermarket retailing in this country.Dave ChambersManaging DirectorCountdown


Our Business1958First Foodtownsupermarket opened.159Countdown supermarketsnationwide. 18New Countdown storesthis year. 2Our supermarkets are high volume, low margin businesses.We make our profits by selling large amounts of groceryitems at low prices. In recent years, we’ve been able to growour profitability and many people mistakenly assume that wemust be either raising prices at the checkout or reducing theamount we pay our suppliers.In reality, we’ve been focused on improving our efficiency levels andreducing our waste, which add up to significant gains. These savingsare then reinvested into the business by lowering prices for customersand improving our stores.Cost of goods sold 77.36%Cost of doing business 3 17.93%Earnings Before Interest and Tax 4.71%TOTal revenue $5,367,076,000Source Woolworths Annual Report 2011Notes1As at 31 May 2012.2FY 2012.3Includes paying staff, running stores, energy, rent, IT etc.


OperationsCountdown is one of New Zealand’s leadingsupermarket operators, serving more than 2.5 millionNew Zealanders each week.We’re committed to providing our customers with choice, value andconvenience, so they’ll enjoy the best overall shopping experience.It requires smart organisation and committed effort behind thescenes to give our customers a choice of more than 20,000 differentproducts in each of our stores.To achieve this, our in-store teams are supported by four dry grocerydistribution centres, three fresh produce distribution centres, threechilled and frozen distribution centres, two meat processing plants,one seafood processing plant and a central support office.18,423 team members support our stores every day.Moving products from these hubs to our stores means ourdrivers have to travel more than 17 million kilometres per year,making over 250,000 deliveries to keep our stores stocked.SuppliersCountdown works with over 800 food producers and suppliersthroughout New Zealand.We value the relationships we have with our New Zealand suppliers,many of whom have been working with us for decades.We abide by voluntary codes of conduct that promote fair tradingpractices and better business relationships.


Our BusinessNorthlandFresh producesupply regionsFrom potatoes inPukekohe to cherries inCromwell, Countdownsupports New Zealandfarmers by sourcing localfresh seasonal producewherever possible. Wealso source 100% of ourchicken pork and lamband 99% of our beef fromNew Zealand.Oranges, MandarinsPumpkin, KumaraWaikatoAucklandGarlic, Mushrooms,Potatoes, PassionfruitCarrots, Peas,Parsnips, BerriesManawatu /WanganuiBay of PlentyKiwifruit, Avocados,Limes, ChillisApples, Pears,Lemons, BroccoliHawke’s BayNelson /MarlboroughRadish, YamLeaf vegetablesTomatoes, Cucumber,Spinach, WatermelonCanterburyOtagoPotatoes, Onions,Sweet Corn, CabbageSouthlandApricots, Cherries,Plums, CapsicumBrussel Sprouts,Swedes, Celery


Responsible RetailingConsumer healthTo help our customers make informed buying decisions, allour private label brands include a Daily Intake Guide. A simple graphicshows the energy, fat, saturated fat, sugars and sodium content of thatfood package as a proportion of the recommended daily intake. We’removing towards having nutritional information on the front label of allof our private grocery label products by the end of 2012.Responsible service of beer and wineWhen it comes to selling beer and wine, we go beyond regulatoryrequirements, applying our own strict standards. This includes requiringproof of identification for all customers who look under 25 years old.In addition, we never sell alcoholic products below cost.Trading fairlyOur Code of Conduct outlines our voluntary commitment tofair dealings with our suppliers, while always seeking the best dealfor our customers. We aim to deal fairly, act reasonably and negotiatefair outcomes with our partners and suppliers.Ethical sourcingAs part of this commitment to human rights, fair workingconditions and environmental protection, we have developed an EthicalSourcing Policy. This ensures we source our products responsibly.It includes working with suppliers to improve their social andenvironmental practices and providing clear guidance to our buying staff.Palm oilWe have taken active steps in response to concerns about theimpact of the growing demand for palm oil on rainforest areas in South-East Asia, West Africa and South America. Through Woolworths Limited,we are a member of the Roundtable on Sustainable Palm Oil. We havecommitted to use only certified sustainable palm oil by 2015 for all ourprivate label products.


Our People18,423New Zealanders employed.40%Reduction in lost time injuries.$1.15mInvested in learning anddevelopment in 2011.1,600Staff completed the SupermarketRetailing Certificate Stage 1 inthe last year.Sharell Grass, Store Manager,Countdown Newmarket.Workforce by areaSupermarket operations 91%Logistics 3.8%Support team 1 2.8%Food plants 2.4%Total 18,423 people 2Notes1Buying, Marketing, Finance, HR, Legal, Property, Loss Prevention, IT and Corporate Affairs.2As at 31 December 2011.


As one of the country’s largest employers, we areproud to play a leading role in the New Zealandworkplace. Our people work in an environment ofdiversity and equal opportunity, and we are committedto protecting the health and safety of our employees.Countdown strives to give our people opportunities for advancementand growing their skills. We invest more than $1 million 2 per yearin learning and development initiatives, including access to nationalqualifications and training programmes. Targeted leadershipprogrammes enable us offer our people career paths that buildon their experience. As a result, more than 85% 2 of our executiveappointments in 2011 were internal candidates.Countdown is an equal opportunity employer, embracing andpromoting diversity. It is one of our core values to do businesswith dignity, courtesy and respect for culture.Health and wellbeingWe are passionate about safety in all aspects of our business.Our vision is “Destination Zero”– zero harm to our people, ourcommunity and environment.We won the Supreme Award at the 2012 New Zealand WorkplaceHealth and Safety Awards.Countdown is a founding member of the New Zealand BusinessLeaders Health and Safety Forum. The forum was officially launchedby the Prime Minister in 2010 and is a business-led initiativeto improve the safety culture of New Zealand.In 2011 we achieved a 40% improvement in lost time injuriescompared to the previous year.Countdown offers all employees and their immediate familiesaccess to an Employee Assistance Programme that includes freeand confidential counselling services. This was especially valuablein the wake of the Christchurch earthquakes. We were able to providecounselling and sufficient time off to all team members who needed it.


Our Community$4.6mDonated in five years to 10children’s wards and hospitalsthroughout New Zealand.$800kRaised over nine years throughCountdown’s golf day forAlzheimer’s charities.$80kOf food donated fromCountdown supermarkets atChristmas to create 1,000 foodparcels for the Salvation Army.Salvation Army regional Director Jason Dilger collects CountdownFood Rescue donations for the Salvation Army food banks.No industry touches more people in the community thansupermarkets. Being so intimately involved with ourcommunities, we are passionate about supporting causesthat matter to them.Our stores play an active role in their local communities, supportingcommunity groups and charities through various fundraising activitiesand campaigns.


Countdown had been donating food to local charities on an adhocbasis for some time. In 2011 we put a formal structure inplace, partnering with the Salvation Army to launch CountdownFood Rescue. This nationwide programme ensures that food thatcan’t be sold but is still fit for consumption is put to good use.We kick-started this ongoing programme in December 2011 withan $80,000 donation of food across all our stores nationwide.Since then, more than 110 stores have formally signed up withtheir local Salvation Army branch, and our Christmas appealraised more than $36,000 for people in need.The Food Rescue programme also supports our aim to have zerofood waste going to landfill by 2015.


Our CommunityCountdown team members don surgical scrubs andperform simulated laparoscopic surgery using trainingequipment at Wellington Hospital, as part of the 2011launch of the Countdown Kids Hospital Appeal.The Countdown Kids Hospital Appeal (formerly the Fresh Future Children’sHospital Appeal) celebrated its fifth year in 2011. Through fundraisingorganised by staff across the country, we were able to present 10 children’shospitals and wards around New Zealand with cheques totallingmore than $800,000 in 2011 bringing the total to more than $4.5 millionraised since 2007.


The Salvation ArmyCountdown is a long-time supporter of the workThe Salvation Army does. In 2012, we once againstepped in to support The Salvation Army’s annualRed Shield Appeal, and through Countdown FoodRescue we support over 110 of the Salvation Army’slocal foodbanks across the country.Alzheimers New ZealandTo support Alzheimers New Zealand and its Aucklandcharitable trust, Countdown has proudly sponsoredZealand’s largest charity golf day for the past nineyears. In 2012, 300 golfers gathered to raise $153,000for Alzheimers Auckland. Funds raised from theannual charity golf day help Alzheimers Auckland toprovide free services for people with dementia andtheir carers.Māori Language WeekCountdown has supported Māori Language Weeksince 2010 and has actively encouraged NewZealanders to embrace Te Reo in their everydayshopping. In June 2011 our Tokoroa store became thefirst with both English and Māori translations in everydepartment. This was so successful that Countdownhas since implemented Māori category translations inevery new store.New Zealander of the YearCountdown is a proud sponsor of the New Zealanderof the Year Awards. In this way, we celebrate andhonour those New Zealanders aged 60 years and overwho make a great contribution to their communitiesand our country.


Our Environment57%Percentage of all waste recycledin 2010/2011.10%Electricity saved per squaremetre across all Countdownstores since 2006/2007.22%Reduction in waste to landfillsince 2006/2007.TOTal waste - FY2011RecycledSent to landfillTOTal waste22.0 tonnes16.4 tonnes38.4 tonnesTOTal emissions by source - FY2011Refrigerant loss 40%Electricity purchased 31%Fuel combustion (logistics) 16%Waste to landfill 11%Fuel combustion (fleet cars) 2%TOTal emissions137,835 tonnes CO 2 e


Countdown recognises that we have an importantrole to play in protecting the world we live in. OurSustainability Strategy outlines a comprehensiveprogramme to limit our environmental impact.For instance, Countdown is committed to achievingan overall 40% reduction in our projected carbonfootprint by 2015.Every new supermarket we build incorporates sustainable designguidelines. This includes energy-efficient CO2 refrigeration plantsystems, night blinds on refrigerated cabinets, sliding covers onfreezers, heat reclaim off the refrigeration coils, energy efficientlighting and the use of natural light in roof panels where possible.All these design features mean that we are on target to achieve a25% reduction in CO2 emissions per square metre in our new storescompared with our older ones.Across all Countdown stores since 2006/2007 these initiatives haveachieved a 10% reduction in electricity usage per square metre.A waste audit programme for all our stores and distribution centresencourages greater recovery of recyclable plastic and cardboard. In2006/2007 we recycled 48% of all waste. In 2010/2011 we recycled 57%.In transport we have converted our company car fleet to fuelefficient diesel and petrol vehicles resulting in a 20% reductioncarbon emissions. We continue to work with our logistics partnersto replace our trucks to Euro 4 or 5 standard with greatly reducedexhaust emissions.Combining all these improvements and higher levels of renewablepower has resulted in Countdown’s carbon footprint for FY2011being 137,835 tonnes of CO2 emissions, below 2006 levels of 140,000tonnes despite the Countdown business having 15% additionalselling space.


Contact detailsProgressive Enterprises Limited, Private Bag 93306, Otahuhu, Manukau.80 Favona Rd, Mangere, Manukau 2024, Email: customerinfo@countdown.co.nzAs a national organisation employing over 18,000 New Zealanders and serving over twomillion customers each week, Countdown recognises the role it plays in contributingto the future of our country. We aim to participate openly, honestly and transparentlyin public policy development, to represent the best interests of our business, ouremployees, our customers and our shareholders and we actively engage with manyinterest groups and organisations.June 2012

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