Foodstuffs S Island profits up

TESS MCCLURE
Last updated 05:00 09/08/2014

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Home cooking trends, a strong economy, and "frugality fatigue" have helped to push Foodstuffs South Island's profits up more than a third this year.

Chief executive Steve Anderson said the results were a relief after a few years of belt-tightening.

"We were almost sick of the headwind we've been fighting against for the last couple of years with the global financial crisis and earthquakes, so last year was a nice result for us," he said.

The supermarket giant's net profit for the year to February 28 was $21.5 million, up 38 per cent from last year's $15.6m.

Anderson said the years of penny-pinching were fading now, with consumers switching away from house brands and opting for healthier choices.

"All consumers turned into conservatives almost overnight around the global financial crisis, but we really started having people changing their behaviour in 2012 - they got frugality fatigue."

"Consumers are still being canny, and thinking about what they spend, but are definitely loosening up and treating themselves a little bit."

There was a particular trend toward the "raw materials" of cooking, Anderson said, indicating that more Kiwis were opting to cook meals from scratch.

"There's definite a trend toward fresh foods."

"It's cool to cook now - you see that in TV shows. As a result, people are putting more time and effort in, rather than just slamming something together. They're thinking more about what they're cooking and consuming."

Anderson said it meant particular growth in the Raeward Fresh brand, as the company prioritised taking time out of its supply chains.

The years of earthquake repairs were also beginning to come to an end, and supermarkets are expanding into the increasingly populated Christchurch suburbs.

The chain had new supermarkets in progress for Wigram, Rangiora and Redcliffs, all due to be open in the next year.

Foodstuffs South Island's total sales were up 5.5 per cent or $137 million for the last financial year, and gross profits grew by 4.9 per cent.

The South Island retail chain owns New World, Henry's, Raeward Fresh and Pak 'n Save.

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- BusinessDay

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