Fresh category drives robust sales at FoodWorks

Posted by Daniel Palmer on 15th June 2009

Australia’s largest independent grocery chain, FoodWorks, has reported strong sales growth as supermarkets continue to defy any economic deterioration.

The company, which operates over 710 outlets across Australia, announced like-for-like sales growth of 10 per cent in April and 12 per cent in May as it turned around a stagnant end to last year.

The health of the main players in the supermarket sector appears as strong as ever, with Coles and Woolworths posting sales rises above the rate of inflation while other players like Aldi, Franklins and IGA also announce resilient results. Their strength has largely been attributed to the ‘at-home’ eating trend which has placed great pressure on the restaurant sector.

“We’re seeing a behavioural shift to the home and old-fashioned family values,” FoodWorks Chief Executive, Peter Noble, told The Australian. “People are hosting barbecues and trying out grandma’s favourite recipes. They’re making more frequent trips to the supermarket and buying more fresh product lines.”

To capitalise on the current trends, FoodWorks – like seemingly all the major chains – is looking to improve its fresh food departments and continue enhancing their private label offering. Last year, they outlined their new private label strategy – however, they maintain that national brands will remain the key focus (representing about 90 per cent of sales).

Mr Noble said 60 FoodWorks stores had introduced their new bakery concept, which they hope will prove strong competition to bakers such as Brumby’s and Bakers Delight.

Speaking at a recent FoodWorks Fresh Workshop to retailers and suppliers, Mr Noble noted that their Fresh category had been a shining light and now provides approximately 22 per cent of total business sales.

“The results we have shown in fresh are even more significant when the range of store sizes in our network is considered. A strong fresh offering will be vital to ensure we continue capturing greater share of the available shopping dollar,” he said.

And FoodWorks is confident about the future, with their business model a key to adapting quickly to changing trends in the marketplace.

“Our business is tracking very well at the moment and we have been able to increase basket size while maintaining customer count,” Mr Noble advised. “Our business model is incredibly flexible which gives us the power to work with suppliers to quickly respond to take advantage of consumer trends.”