Endeavour Group appears to be defying the tough trading conditions being felt around the country, delivering a stable third quarter with brand and customer metrics remaining strong and all drivers in its hotels business experiencing growth.

Retail sales for the third quarter of $2.4bn were up 2.4 per cent on the corresponding period last year, or up 0.9 per cent when taking into account the timing of Easter and New Year’s Day. Hotels sales for the third quarter increased by 1.5 per cent to $487m, or 1.7 per cent when taking into account the timing of Easter.

Endeavour Group Managing Director and CEO, Steve Donohue, said: “Endeavour Group delivered a stable third quarter trading performance in a softer market, with both Retail and Hotels growing sales and our brand and customer metrics remaining strong.

“This reflects the strength of our diverse portfolio and the efforts of our 30,000 team members to deliver outstanding customer service and memorable experiences.

“Our unparalleled value proposition continues to make Dan Murphy’s Australia’s leading destination for drinks, once again being named Liquor Store of the Year in Roy Morgan’s Annual Customer Satisfaction Awards.”

Endeavour reported a slow start to the quarter in January, and while trading conditions improved slightly in February and March they remained subdued relative to the first half of the financial year.

In highlighting some changes in consumer behaviour Endeavour said: “Customer trends towards value, convenience and discovery continue, with many customers shopping more selectively and prioritising value. The appetite for both convenience and discovery is evident in the pre-mixed category, which again had the highest sales growth in the quarter.”

That appetite for convenience is seen in the group’s online retail sales, which grew by 8.4 per cent which was driven by strong online growth from Dan Murphy’s, which saw a continued trend towards pick-up, as well as in BWS where sales via immediate delivery partners drove growth. Endeavour reported that the Dan Murphy’s online sales growth is predominantly being driven by the Dan Murphy’s app.

In the hotel business Endeavour said its localised food and bar offers are continuing to perform with customers engaging with the value offerings. Gaming returned to modest growth in the quarter, although the group said revenue in Victoria continues to be impacted by its early adoption of the Victorian government’s planned changes to trading hours ahead of the wider market.

Donohue said: “Our Hotels continue to show their resilience in challenging economic conditions, with all drivers in growth during the quarter. Our localised food and beverage offer continues to resonate strongly with customers looking to enjoy affordable social experiences with family and friends.”

Looking ahead Endeavour reported that market conditions have remained “subdued” so far in the fourth quarter, which looks to be experiencing similar trading to the third quarter.

Endeavour said: “The Group remains well positioned to perform through the economic cycle, with our strong customer advocacy and value credentials driving resilience.”

In the quarter Endeavour opened two new Dan Murphy’s stores and relocated one, the group also opened two BWS stores and closed five, ending the quarter with 1717 stores with the expectation of adding 10 new stores in quarter four.

On the pub side two venues were renewed, with renewals progressing in seven venues, in addition the group added the Rye Hotel (Vic) and Burnie Central Townhouse Hotel (Tas) to its network, discontinued the lease of The Archer Hotel SA, and is currently progressing the acquisition of the leasehold of the Cavenagh Hotel in Darwin.

Andy Young

Andy joined Intermedia as Editor of The Shout in 2015, writing news on a daily basis and also writing features for National Liquor News. Now Managing Editor of both The Shout and Bars and Clubs.

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