From our CEO
When FY23 began I don’t think anyone anticipated just how much would, or could, happen in the twelve months that followed.
Coming off the back of a global pandemic, it certainly wasn’t unreasonable to anticipate a more normal year. Instead, what we faced into was another incredibly big year, not just as a co-op but as a country.
This is my 7th annual letter as the Foodstuffs North Island CEO and something I have come to deeply understand, is that New Zealand’s challenges are always our challenges too, and as one of the country’s biggest employers, the role we play matters.
This year, in the face of ongoing supply chain challenges, a cost-of-living crisis and two significant weather events, we stood up and we delivered.
We did it by holding strong on our purpose to make sure New Zealanders get more out of life and committing to being more customer driven in our discussions, decisions and actions every single day.
It is our people who lead and make the difference and I’m incredibly proud of the teams in this co-op who stood up, yet again, to deliver a year of outstanding results.
Over 320 passionate and dedicated local Owners Operators went over and above for their communities and teams, and more than 24,000 team members across our stores, support centre and supply chain showed up through sun, rain and wind to keep our stores and e-commerce delivering for our North Island communities.
A few of the moments that mattered in FY23:
- Safety. FY23 was a record year for safety performance with 26% fewer LTIFRs. Keeping people safe and focusing on zero harm is something we will never stop prioritising and it’s important to recognise the hard work and leadership behind this positive result – work that goes on every day across our sites.
- Delivery on customer value. In a year of record inflation and a cost-of-living crisis, we understood that food prices were a top concern for New Zealanders and that’s why all our teams worked hard to fight inflation and deliver value for customers. We did this by buying well, finding efficiencies and focusing on introducing meaningful initiatives to help customers find value in our stores, like New World's Every Day Low Price ticket and Price Rollback. These are all tangible ways for New Zealanders to see and feel our commitment to what matters most to them.
- Crisis response. Sadly, we are well practiced now in responding to crisis events and the Auckland Floods and Cyclone Gabrielle were another example of our ability to keep people safe, keep our stores operating and support the community in multiple other ways as well. Thanks to the focused, quick and collaborative efforts of our teams across the co-op, we were able to help our impacted stores get up and running again, continue getting stock to stores (despite some serious logistical challenges) and support impacted communities by having the essentials available. We were also able to quickly support other aid organisations through our Here for NZ committee, and take practical steps to help our impacted suppliers get back on their feet too.
- Social supermarkets. Our social supermarkets are a world class, innovative and effective way to equip more New Zealanders with the skills and confidence to shop for healthy and affordable food. Delivering them in partnership with local community organisations is the right approach and means we can pair our grocery retail expertise, with their local knowledge, connections and existing programmes for the best possible impact. In FY23 we ramped up this programme and opened four new stores, in collaboration with local community organisations in Kaitaia, Whangārei, Tokoroa and Ōtūmoetai. We now have a total of five social supermarkets and are continuing to scope and plan for more in the communities who need it most.
- 100 year milestone. In FY23 we had the great privilege of being part of Foodstuffs North Island’s 100th year. It was a poignant reminder of the rich legacy behind our co-op, as well as inspiration for our next chapter with New Zealanders.
Our customer driven momentum continued to build
Our aspiration to become one of the most customer driven retailers in the world continued to be a key driver for us in FY23 and is directly linked to the great results we’ve seen across almost every area of the co-op for the 52-week year.
PAK’nSAVE was the fastest growing retail brand for the year with 6.8% same store revenue growth. New World dipped slightly, by 0.5% and 4 Square was up 0.5%. Gilmours had a very strong year, with 24.5% all store growth. It was a record year for Private Label with revenue growing 9.3% YOY.
Our 4 Square stores were the top performers in our Customer Promise score, up 151bp at 81.1%. New World finished at 75.4% and PAK’nSAVE at 77.7%. These are strong scores and in the year ahead our aim is to get all of our brands achieving customer promise scores well into the 80’s.
Our online retail revenue dipped 3.4% which was a disappointing result and highlights the opportunity and urgency we have to drive a stronger customer experience in our online channels.
In FY23 we opened six new stores and there were 43 changes in store ownership. Some of these were retirements and many represent stories of our Owner Operators moving to an exciting new opportunity within the co-op.
The direction and focus for FY24 is clear
Our Members, Board and wider co-op team should all feel incredibly proud of what has been delivered for New Zealanders in the last year, and we should all be challenging ourselves on doing more for customers. These two go together, to deliver our long-term success and to continue earning our right to serve the local communities we're in.
We have an important role to play in a better New Zealand – and we’re committed to playing our part strongly in the year ahead.
New Zealanders need us to be efficient, focused and relentless about delivering better for them. Everything from our back of house operations, our team engagement, our investment in technology, all matter.
We know from the customer data and insights that there’s three clear things they’re asking for: value, ease and convenience and better digital experiences.
We will continue to fight inflation through efficiency, better buying, promotions that our customers value, and our commitment to be Here for NZ, delivering on our promise to provide New Zealanders with access to healthy and affordable food.
Ease and convenience isn’t complicated at the core – we need to make sure we’re getting stock to store and that it’s on shelf for customers when they need it. We’ve got opportunities to grow in supply chain efficiency and instore execution to support this focus.
We need to make sure our ticketing, signage and experience in store makes it as easy as possible for customers to find what they need and get maximum value.
In terms of better digital experiences, our e-commerce offering will be a core priority and commitment for our centre and store teams.
In FY24 we need to move from being ready to respond, to making a difference. Rising costs and issues like retail crime pose significant challenges for us, our teams and customers, but we’re clear on the role we can play and will be committed to doing the right things to drive meaningful change.
All of the strategy matters but what has always differentiated our co-op is our people and FY24 will be no different. I know that once again our teams will think customer, be in it together, act courageously and play above the line – no matter what comes our way.
There is plenty to look forward to in the year ahead, we have a strong co-operative, clear priorities and an incredibly talented and committed team.
We appreciate that the role we play for New Zealanders is essential and I'm determined we will continue to invest, innovate, and deliver better experiences for everyone who works, shops or partners with us.
Together we will continue to support all our local grocer families to be successful in their businesses and together we will continue to build a co-op that can stand strong for many decades to come.