Rebrand resonates with shoppers and boosts earnings at Progressive

A larger fresh food section and price cuts are luring customers. Photo / Dean Purcell

Price cuts and a rebrand of its supermarket stores has seen Progressive Enterprises boost full-year earnings by 17 per cent.

Australian retailer Woolworths, which owns Countdown, Foodtown and Woolworths supermarkets in New Zealand, reported earnings before interest and tax of $244 million here, up from $208 million last year.

It competes with Foodstuffs, a co-operative which operates New World and Pak'n'Save stores.

Woolworths chief executive Michael Luscombe said the rebrand, including a refurbishment of the stores to accommodate a larger fresh food section and price reductions, had resonated with New Zealand consumers.

Sales in rebranded stores are higher than in average sales growth for New Zealand supermarkets.

The company had annual sales of $4.957 billion in New Zealand, up 4.6 per cent on last year. It is in the process of building a $45 million distribution centre in Wiri that Luscombe said would cut supplier and distribution costs.

Luscombe is relatively unconcerned about the potential arrival of cut-price German grocer Aldi to New Zealand, saying it had learned to prosper alongside Aldi.

"We've lived with Aldi for quite a long time here in Australia so we know exactly what to do. I think if there is a customer base that might be at risk of moving across to Aldi, as it was in Australia, it would be the likes of Pak'n'Save."

Its consumer electronics business Dick Smith experienced a 12.1 per cent fall in same-store sales in New Zealand as consumers closed their wallets.

- ADDITIONAL REPORTING: NZPA