Super Retail Group rides online wave into new fiscal year

Super Retail Group says sales momentum has continued into the 2021 financial year, especially online, as shoppers stock up on leisure and sports gear.

Super Retail chief executive Anthony Heraghty.

Super Retail Group, which owns retail chains Supercheap Auto, BCF, Rebel and Macpac, says sales momentum has continued into the 2021 financial year, especially online, as shoppers stock up on leisure and sports gear.

But the performance was not evenly spread across its chains, as lockdowns and limits on travel dented sales at camping retailer Macpac, which suffered a fall in sales for the beginning of 2021, while boating, camping and fishing store BCF registered comparable sales growth of 63 per cent.

Addressing the company’s annual meeting on Wednesday, chief executive Anthony Heraghty said in the first 17 weeks of 2021 the group delivered both total sales growth and like-for-like growth of 25 per cent, despite the ongoing COVID-19 restrictions, including hard lockdowns in Melbourne and Auckland.

Super Retail also maintained strong momentum in digital channels, with online sales growth of 132 per cent, including Click & Collect growth of 123 per cent. Click & Collect represented 44 per cent of year-to-date total online sales.

Investors warmed to the news, and shares in Super Retail rose more than 5 per cent before closing up 4.8 per cent at $11.70.

However, there was some investor angst around Super Retail’s corporate governance, with shareholders registering a 17.18 per cent vote against the adoption of the remuneration report and a 20.9 per cent against an equity grant to the chief executive.

Mr Heraghty said year-to-date sales performance across the group’s four core brands included Supercheap Auto reported sales growth of 22 per cent and like-for-life growth of 21 per cent.

Rebel grew total sales by 16 per cent, with like-for-like also up 16 per cent. Rebel had the best online growth, with digital sales up 184 per cent.

BCF experienced extremely strong growth year-to-date, with total sales growth of 63 per cent, and like-for-like of 61 per cent.

Macpac was hurt by the Melbourne lockdown, Mr Heraghty said, with total sales growth of minus 2 per cent and like-for-like down 1 per cent.

Online sales continue to accelerate for all four brands, with online sales growth ranging from 121 to 184 per cent for the first 17 weeks of 2021.

The group’s gross margin was more than 200 basis points higher and benefited from reduced promotional activity (particularly in Rebel) as the group protected its inventory position in the lead-up to the Christmas trading period.

But Mr Heraghty was cautious as to whether the strong sales trajectory would continue.

“Given the continuing uncertainty in the economic outlook, we do not believe that year-to-date performance should be treated as an indicator of full year performance,” he said.

He said Super Retail intended to invest in its digital capability and modernise its technology infrastructure. The group expects capital expenditure in fiscal 2021 will be around $100m.

“We are pleased with the positive start to the financial year. We are continuing to see robust growth in both in-store and online sales, and our active club membership base has increased to over 6.85 million members.

“Our considered approach to promotional activity in response to strong levels of consumer demand — to help manage inventory in the lead-up to Christmas and optimise gross margin — and the substantial fixed component of our cost base means revenue growth has flowed meaningfully through to the bottom line.”

He added that the dynamic growth in digital sales had reinforced the company’s conviction in its omni-retail business strategy, and it would continue to reinvest in the business.

“COVID-19 continues to make this a challenging year for our customers, trade partners and team members, as well as the communities in which we operate,” he said. “As Australia and New Zealand begin to reopen, we are looking forward to inspiring our customers to live their passion as they look to get outdoors, be more active and enjoy the summer holiday season.

“The group’s four core brands operate in attractive lifestyle categories and are well positioned to benefit from increased demand for domestic tourism and leisure, as well as the acceleration of the health and wellbeing trend.”