A near doubling in sales revenue from its growing BCF (Boating, Camping Fishing) division has helped Supercheap Auto Group to a near 17% increase in first quarter sales
Supercheap SUL yesterday said first quarter sales for the 13 weeks to 29 September 2007 were 16.8% higher than the same period last year, with sales in the BCF business rising from $14.8 million to $29 million in the latest period.
That 96% rise more than outstripped a 7.5% or $9.5 million rise in sales at the core business, Supercheap Auto's chain of stores.
The market liked the news, pushing the shares up 8c to a day's high of $4.58, before they eased to close at $4.48, down 2c in the weaker market yesterday afternoon.
Supercheap Auto Group Managing Director, Mr Peter Birtles, said in a statement to the company's AGM that the sales increase was due to positive customer response to new product ranges, refurbished stores and improvements to the Group's own brand offer.
"We are particularly pleased that we have been able to maintain the momentum established in Supercheap Auto's like for like sales given that we are now cycling stronger comparative periods," he said.
"BCF's new store program is ahead of schedule and like for like sales growth remains very strong. The business is continuing to benefit from working closely with its suppliers to extend the range with exclusive products and new product opportunities," said Mr Birtles.
During the quarter, Supercheap Auto opened two new stores and closed one store to bring total stores trading to 247. Thirteen existing stores were also refurbished.
In September, the Caboolture store, north of Brisbane, was reformatted to trial the new 1,100 sq. metre ‘Super Store' format which features an extended product range.
Supercheap Auto plans to open eight new stores and refurbish a further 17 existing stores throughout the remainder of the financial year.
BCF has opened seven new stores and now has 38 stores trading. The business expects to open eight more stores by June 2008.
"We believe that the Supercheap Auto has the potential to grow to a network of around 300 stores. We plan to open 10 new stores, close 1 store and relocate 1 of our existing stores during the 2007/08 year. To date, we have opened 2 stores and closed 1 store," Mr Birtles said.
"One of the new stores is a second trial store for the Supercheap Auto – Pitstop at the Westfield shopping centre in Hurstville, Sydney. We will review the performance of our 2 trial Pitstop stores over the coming months and make a decision on the potential for this format post Christmas."
In total, SUL is planning to refurbish around 30 of its existing stores during 2007/08 and by this weekend will have already refurbished 13 stores with the aim of driving comparable store sales faster.
Comparable store sales for the first 13 weeks of the new financial year rose 3.9% compared to the headline figure of 7.5%.
Refurbishing existing stores increases overall sales and lifts the same store comparison. It is a cheaper and more effective way of increasing sales than going hell for leather with a new store program only.
Combing new stores and refurbishing existing stores aggressively, is one of the reasons why Woolworths gets such a high level of same store sales compared to its top line figure. Woolies supermarkets and liquor business lifted topline sales 8.7% in the first quarter, according to Tuesday's statement, with same store or comparable store sales up 7.6%.
"We are continuing to extend our range and service offer with the introduction of a range of garage storage solutions and extensions to our range of travel and touring products. We have also recently launched Supercheap Auto Car Insurance and a new volume discount offer for Trade customers. We have also completed the rollout of our Fitment Services offer across all stores, Mr Birtles told shareholders.
He said the he performance of BCF has "demonstrated the potential for over 60 stores across Australia. As of this weekend, we will have opened a further 7 new stores so far this financial year which takes total store numbers to 38.
"The new stores will primarily be in Queensland, New South Wales and Western Australia.
"We are close to completing our ranging work for the Victorian and South Australian markets and we start to look for new store opportunities in those markets."
