RETAILING
Australia
Franklins in Australia achieved a much improved performance in 1997 with a 5% increase in sales and a stronger growth in operating profit. The company now has 257 stores in four states with a total of some 5.6 million sq. ft of selling space. The conversion of the No Frills stores to the new Fresh format continued in 1997 with 23 more stores completed. The new Fresh stores are achieving improved margins resulting from increased sales and changes in the sales mix. At the year end there were 24 Big Fresh and 62 Franklins Fresh stores, which now account for over 52% of total sales. On the basis of this success, the conversion programme to the Fresh formats remains a high priority in Australia.

In addition to changing store formats, Franklins is concentrating significant resources on improving the quality of its business processes through the introduction of category management and the rationalisation of its distribution infrastructure with the closure of the Chullora warehouse. These initiatives have resulted in an 11% reduction in inventory value. It is expected that further benefits will arise as Franklins implements its new information technology platform over the next two years.

New Zealand
Woolworths in New Zealand had another good year with sales up 4% and operating profit improved by 19%. Store openings were lower than in recent years, contributing to a slight decline in market share. In total we now have 77 stores in New Zealand, including 45 Woolworths supermarkets, 12 Big Fresh stores and 20 Price Chopper stores.