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Countdown earnings slip on record revenue

NZN 25/08/2016 By Pattrick Smellie

The Countdown supermarket chain posted a 3.7 per cent drop in annual earnings due to a combination of food price deflation, competitive pressures and increased team-based performance payments as part of a customer service improvement programme.

Earnings before interest and tax fell to $313.9 million in the 52 weeks to June 26, from $326m the previous year, its ASX-listed parent company Woolworths announced.

When normalised for team performance-based bonuses, Countdown's ebit for the year was flat compared with the previous year, the company said.

Sales of $6.1 billion set a new record, up 3.8 per cent on the previous year, and the chain opened a net seven new stores in New Zealand.

"Comparable sales increased 1.3 per cent for the year as customers reacted positively to our lower prices and improved service and fresh food offer," Woolworths said in a commentary on its New Zealand segment, which is the Countdown chain.

"Sales per square metre declined by 0.9 per cent with comparable sales growth more than offset by an increase in year-end trading space of 5.1 per cent."

The supermarkets' own food price index showed deflation of 0.3 per cent over the year, with lower prices across both categories.

Countdown is now operating at 184 sites in New Zealand, having opened 10 new stores and closed three in the last year.


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