Super Retail Group (SRG) will open a new automated distribution centre (DC) in Victoria, to reduce its supply chain costs, improve home delivery and minimise the need for third-party storage facilities.
Announced in the company’s full year 2023 results, the new 65,000 square metre DC will be based in Truganina and will replace two older distribution centres.
Group managing director and CEO Anthony Heraghty told investors the company has signed a long-term lease agreement with the Goodman Group for the construction and leasing of the new DC.
“Construction of the new DC will be built to achieve a five-star green sustainability rating, scheduled to commence in the first half of FY24 with completion expected by the first half of FY26,” he said.
The facility will be funded by the group’s operating cash flows.
Heraghty said the future capital cost of the DC to Super Retail Group is expected to be approximately $80 million, with approximately $30 million scheduled to be incurred in each of FY24 and FY25.
“Further, as we transition from two of our existing facilities in Victoria, transition and close, the company will incur a one-off opex cost of $8 million in FY25,” he said.
Strategy focus
“The group’s strategic focus remains on growth for its core brands, leveraging closeness to our customer, connecting our omni retail supply chain, simplifying the business and excelling in only retail,” Heraghty said.
Over the year, SRG continued its investment towards building customer engagement via a loyalty platform and one-to-one communications.
“I can confirm that our program of investment in customer loyalty and personalisation is on track and proceeding to timetable,” Heraghty said.
“We’re looking forward to the relaunch of the Rebel loyalty program between now and Christmas.
“Our personalisation trial at BCF is continuing, and communication has been extended to the vast majority of customers, excluding a control group.
“The Rebel personalisation pilot will come in the next calendar year.”
He said its was “worth noting” that over a four-year timeframe, the team has “made a number of changes, which has meant we’ve seen active club members grow by 2 million from 1.7 at the end of FY19 to 3.7 million active members”.
In total the group recorded 10.3 million active club members, with member sales contributing to 73 percent of group sales.
Rebel ready to relaunch
The company is on track to relaunch its Rebel loyalty program in the first half of FY24 aimed at targeting new members and boosting engagement.
The second half of FY24 will see the launch of in-store and online campaigns and a Rebel personalisation pilot
The sporting goods store recorded sales of $1.31 billion with its membership base growing by 13 percent to 3.7 million and club members representing 73 percent of total Rebel sales.
Its online sales of $198 million represented 15 percent of total sales with Click & Collect representing 33 percent of its online sales.
Rebel opened four new stores resulting in 159 stores at period end.
Loyalty programs and cyber, omni and digital
Heraghty added SRG is reaching a capital expenditure of $150 million in FY24 to fund the store development program, new DC, improvements to its loyalty programs, and cyber, omni and digital capability uplift.
Cyber, omni and digital capabilities costs are expected to reach $58 million, and also cover investment in data, networking and core information systems.
Other digital and omnichannel highlights
The automotive parts and accessories retailer, Supercheap Auto recorded online sales of $115 million, representing eight percent of its total $1.45 billion worth of sales.
Of its online sales, Click & Collect made up 74 percent purchases.
Over the year Boating, Camping, Fishing’s (BCF) total sales reached $840 million, with SRG recording a dip in sales in the first half of the year before momentum improving in the second half.
From its total sales, online purchases of $94 million represented 11 percent of total sales. Click & Collect represented 60 percent of online sales.
The wilderness equipment brand, Macpac recorded total sales of $216 million, rising 22 percent over the year, with the rise attributed to the removal of lockdown restrictions.
Online sales of $39 million represented 18 percent of total sales with Click & Collect making up 16 percent of online sales.
SRG recorded total group sales of $3.8 billion, up seven percent from the prior year while its statutory net profit after tax (NPAT) came in at $263 million.
Of its total sales, online made up $445 million with Click & Collect accounting for 48 percent of online sales.
It was reported online sales dropped over the year as consumers returned to in-store purchasing, marking a return to pre-pandemic behaviours.