Liquor retailer Endeavour Group says supply chain challenges are impacting product availability and transport costs but the company is doing “all we can” to support suppliers and hold off price increases.
MD and CEO Steve Donohue reassured suppliers during a virtual supplier forum this week that the company would hold off on cost increases for as long as possible.
“Together, we have managed to wade through the availability challenge, and we are genuinely grateful for everybody’s efforts in trying to put stock on shelves and moving through the supply chain, but it’s costing more than ever before,” Donohue said.
“What we have done is try to hone in on exactly how much it is costing us at the moment, and therefore what the cost increases for us look like. One of our intentions is to try to continue to hold that cost which we view as an investment in trying to facilitate stock movement for suppliers for as long as we can, but we’re also going to start sharing that information with suppliers to give everybody some visibility on what it is costing at the moment to move things around,” he added.
The company has extended its 14-day payment terms first introduced in April 2020 after the outbreak of Covid-19 that allowed faster payment to small suppliers. These terms will now remain until June next year.
“In a world with so much uncertainty right now, we know how much stability and certainty means,” said the group’s GM merchandising Tim Carroll.
“We are committed to supporting our suppliers through these never-before-seen circumstances and we recognise the economic challenges faced by small suppliers over the last two years,”
Innovation was another core theme of the supplier briefing.
“What customers are looking for increasingly is more discovery, more interesting stuff, more new things and more convenience,” Donohue said. Forty per cent of the products Endeavour’s stores sell today did not exist eight years ago
He encouraged the company’s suppliers to innovate more citing that in the past five years, 85 per cent of sales growth of the company has come from new product development.
He also emphasised that there was room for innovation in the wine category to meet changing consumer trends and attitudes.
“The wine category needs to keep pace with changing customer expectations; lower alcohol, no alcohol, smaller format, easier format, something new and different like I’ve never seen before,” he said.
