From our Chair
My family’s journey in Foodstuffs North Island’s 100 year story began back in 1950s New Zealand.
A lot has changed since then with everything from the introduction of seven-day trading, operational innovations like barcodes and scanning, new brands in the Foodstuffs family, right through to where we are today on a digital transformation to become one of the most customer driven retailers in the world.
It's been an incredible ride and one I’m honoured to be part of.
While there is a lot about our business that has changed through the decades, the core of our business is the same as it has always been. At our heart we are a people business, and we would never have reached 100 years without the passion that exists everywhere in our business to do a great job for our customers and communities.
When I look back on our most recent year (FY22), there is certainly much for our Members and teams to be proud of.
Once again, our whole co-operative rose to the challenges of the COVID-19 pandemic to continue to keep our customers and people safe and stock on shelves.
Our business embraced the findings laid down to us in the Commerce Commission’s final Market Study report. We have worked constructively with the Commission and MBIE, and are transparently reporting our progress via our Market Study Reporting Dashboard.
We are up for the challenge of delivering value for all New Zealanders and our Market Study Action Plan includes a commitment to simplifying our pricing and promotional practices, working with suppliers and the Government to develop a compulsory code of conduct, and ending the use of restrictive land covenants and exclusivity provisions in leases.
We have an opportunity to deliver better value for customers by removing barriers to market entry where we can, and our FSNI Board and Executive Leadership Team is committed to being accountable to New Zealanders every day as we work to do that.
As an employer of 24,000 + people with stores in hundreds of New Zealand communities we are determined to make sure we continue to earn our social licence and live our four social promises to provide affordable and healthy food for all New Zealanders, provide meaningful work for our people, be leaders in sustainability and support our local communities to thrive.
In FY22 we were proud to make significant progress on all four of our social promises and step up to do our part to help address food poverty through things like New Zealand’s first Social Supermarket in partnership with Wellington City Mission, food bank drives, and the donation of the equivalent of 486,142 meals via the NZ Food Network.
As your Board, we are pleased to report a year of strong financial performance, while continuing to navigate the COVID-19 pandemic, keeping our people safe and keeping the shelves stocked for all New Zealanders.
The results for FY22 represent trading for 53 weeks, compared to 52 weeks in the prior year.
For FY22 our Member store revenue of $9.3b was $481m up compared to the 52 weeks in the prior year. The Foodstuffs North Island Group’s (Group’s) statutory revenue (which reflects gross Member purchases directly from FSNI Distribution Centres and net Member charge through purchases) for the 53-week period of $4,021 million, was $302 million or 8% up compared to 52 weeks in the prior year.
The Group’s EBIT for FY22 of $273.6 million was up $65.1m, and is made up of the following components:
- Deferred Rebate Voucher (DRV) Member funding of $122.1m (up $22.3m)
- Supplier Repatriate Rebates for FY22 of $27.9m (down $1.5m)
- Group Project Levy Member funding of $43.5m (up $18.9m)
- Property & Investment portfolio EBIT of $80.2m (up $25.4m)
Your Board is pleased to announce the distribution to Members of the DRV and Supplier Repatriate Rebates totalling $149.9m. The Group Project Levy Member funding and Property & Investment profit are retained by FSNI to enable the Co-operative to continue to invest in IT, Digital and Property assets.
As your Board, we keep a close eye on our current performance and future outlook, to ensure the co-operative remains relevant and financial sustainable for the next 100 years.
During the year, total capital spend was $111.2 million, $55.1m lower than last year primarily due to the large capital investment in Foodstuffs North Island Landing Drive in the prior year. Investment in new stores and refurbishments remained stable at $54.9m. In addition, $21.4 million was invested in technology, including customer facing technology as well as core SAP system enhancement. An additional $4.6 million was invested in oyster quota as we continue to invest in surety of supply of seafood in our stores, for our customers.
As a Board we are proud of the strong financial position of the co-op which puts us in a good position to continue what we do best for New Zealanders for the next 100 years and beyond.
A strong co-op culture
A business does not survive and thrive for 100 years without a strong and enduring culture that puts people first.
As we look ahead to the next 100 years, we are focused on what is important to our core and where we want to evolve our culture so that we can continue to provide our people with a safe environment where they can be their best selves and move faster on the things that matter most to our customers. I look forward to embarking on the next part of this culture journey with our Members, and our Support Centre and Distribution Centre teams.
I would like to thank Chris Quin and the Foodstuffs North Island Executive team for navigating our business through a challenging, but successful year and for the way you have led us through the Market Study process to ensure we are accountable, transparent and deliver on our commitments as part of our customer driven strategy.
Behind the success of our brands, is our Banner Representation Groups (BRGs) working in close partnership with the Support Centre. It’s been a personal highlight seeing these groups continue to grow and work collaboratively to make customer driven decisions for their brands. On behalf of our FSNI Directors I would like to thank each of our BRG representatives for their passion and selfless commitment to making our brands and co-operative stronger.
To all our Members and families, thank you for everything you do. Not just for the role you played in our FY22 results or for the relentless focus you had on doing the right thing to keep people safe through COVID-19, but for the many years of service (often decades) that you have given to our co-operative. You and the Members that have gone before you have made Foodstuffs what it is today – a co-op that is proud to serve its people, local customers, and communities.
I look forward to celebrating our 100-year anniversary with our Members past and present, Support Centre Teams, Suppliers and the many people who have played such a critical role in our Foodstuffs North Island story.
On behalf of the Board,