Endeavour Drinks total sales increased by 9.5% in Q3 to $2.3 billion with comparable sales increasing by 8.9% and a spike in online sales during COVID-19.
Woolworths Group Chief executive Brad Banducci said: “The last four months have been one of the most challenging periods in the history of Woolworths.
“Our team is doing an incredible job of responding to these unprecedented challenges and I want to thank them for their amazing efforts.
“The COVID-19 crisis is far from over, but we are hopeful that we are now settling into a ‘new normal’ and are confident that we will get through this together.
“Group sales growth for the quarter was strong across all businesses apart from Hotels following the mandatory closure due to Government restrictions in late March.
“After a slower start to the quarter, Australian and New Zealand Food sales increased materially from late February due to pantry-loading and more recently with customers eating more at home.
“Endeavour Drinks sales also surged towards the end of the quarter. While already trading well in January and February.”
“Our team have played a critical role during these unprecedented times and while the outlook for the rest of the financial year is uncertain, we remain in a strong operational and financial position. This has been a real team effort and we expect to pay a recognition bonus to our permanent front-line team members at the end of the financial year to reflect their over-and-above efforts.”
Change in mix returns to normal
January and February sales for Endeavour were subdued and impacted by low market growth due to weather and bushfires.
However, sales grew materially in March with a pronounced surge in demand commencing on March 22 in Victoria and NSW.
Woolworths said sales growth rates have “now begun to moderate”.
In March, Dan Murphy’s was the key beneficiary of increased demand with stronger sales growth “reflecting its strong brand resonance and breadth of range”.
Beer, wine and spirits grew strongly across both retail businesses; however, some trading down was evident as customers shifted towards larger pack sizes and away from premium products.
“This change in mix has now returned to normal,” Woolworths said.
In EndeavourX, Endeavour Drinks’ online sales increased by 43.1%, which Woolworths said was “significantly above recent run-rates” with online penetration increasing to 6.9%. BWS and Dan Murphy’s both delivered strong online growth with BWS’s online sales growing by over 200% for a week during the period of peak sales, albeit from a lower base.
Other initiatives included an extension of Endeavour Marketplace’s (Direct from Supplier) service and local ranging programs to assist small producers with a route to market.
Almost 300 new suppliers have been added, offering approximately 2000 new products in the last four weeks.
Dan Murphy’s also launched a contactless pick up, direct-to-boot service in April, which is now available in approximately 40 stores.
My Dan’s members continued to increase with 4.3 million members at the end of March.
During the quarter, Endeavour Drinks partnered with Sydney’s Archie Rose Distilling Co as it shifted production from its usual gins and whiskies to make hand sanitiser, which has now been distributed across Dan Murphy’s and BWS stores.
Dan Murphy’s added one new store in the quarter, growing the network to 240 stores. BWS added six net new stores in the quarter, growing the network to 1359 stores.