Big rise in annual revenue for Foodstuffs South Island doesn't keep its bottom line out of the red

Foodstuffs South Island raked in an extra $267 million in revenue during its 2024 financial year, which the co-operative says was driven by rising food prices and a surge in domestic and international tourism.

But according to the co-op’s recently released 2024 annual report, its full-year net profit for the financial year ended 29 February 2024 went in the opposite direction to its soaring revenue.

Foodstuffs South Island (FSSI) reported a net loss after tax of $11.5 million in the 2024 financial year – a big slump from the $6.9 million net profit after tax FSSI reported last year. FSSI's annual report doesn't say why profit fell. Interest.co.nz is asking the co-operative.

The co-op’s extra $267 million revenue this year boosted its full-year net revenue to $3.62 billion, up 8% from the $3.23 billion reported in 2023.

FSSI Chairman Russell Mckenzie says in the annual report the 8% revenue increase was primarily driven by food price inflation, “but also by the continued growth of domestic and international tourism.”

The co-op’s full-year net revenue has risen over $434 million since 2022 and since 2020, annual net revenue has shot up by almost $653.2 million.

Operating expenses rose to $353.3 million in the 2024 financial year, up 19.6% from $295.4 million in operating expenses during the 2023 financial period.

Mckenzie, who is also the owner-operator of New World St Martins in Christchurch, says FSSI has continued to maintain its strong financial position.

He says 14,000 people are employed across the co-op and FSSI has seen 13 changes of ownership take place and welcomed eight new owner-operators this year.

According to figures from the annual report, members of the South Island co-op now own 193 PAK’nSAVE, New World, Four Square, On the Spot and Raeward Fresh stores as well as six Trents branches.

Mckenzie described the proposed merger of FSSI and Foodstuffs North Island (FSNI) into one entity as a “significant milestone”. 

“A nationwide Foodstuffs co-operative would also continue to have significant operations and leadership capabilities in the South Island,” he says. “What would change is the way we’re governed and operated.”

The Commerce Commission which has been tasked with either clearing or denying the merger, pushed out its decision date for a second time this year on Friday, setting down a new decision deadline of October 1st because of unresolved issues with the application.

Chief Executive Mary Devine says the South Island co-op remained “future-focused.” Devine has been the CEO of FSSI since 2021 and was previously the Managing Director of fashion retailer Hallenstein Glasson.

She says New World’s revenue had risen 8.9% from a year ago while PAK’nSAVE’s revenue “finished the year strongly” and jumped an even higher 13.1%.

This was up from PAK’nSAVE’s 10.4% revenue increase in 2023, and Devine says the rise demonstrated the importance of delivering value to customers.

A return of tourism contributed to a 10% increase at Four Square. The full-year revenue of Trents and On the Spot increased by 0.3% and 5.4%, respectively.

Raeward Fresh’s revenue dipped 1% which Devine says was caused by “changing customer trends”.

FSSI’s report only provides the percentage changes in revenue for each of the co-op’s store chains, and didn’t include the actual revenue figures.

Devine says two new On the Spot stores had been opened in the 2024 financial year and work was wrapping on PAK’nSAVE Papanui in Christchurch, which is due to be opened in early 2025.

“We drove hard to increase efficiency this year, progressing a number of projects to simplify and reduce cost across the value chain from our suppliers to our customers,” she says.

Foodstuffs North Island has yet to release its 2024 annual report but last year reported revenue had risen by $278.5 million to $4.33 billion.