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Bushfire and drought impact Super Retail’s start to the year

Super Retail Group has delivered sales growth over the first half of 2020, despite the impact of bushfire and drought on Australia’s struggling retail market. 

Group sales across the Supercheap Auto, Rebel, BCF and Macpac brands grew 2.9 per cent, while like for like sales rose 1.7 per cent over the 26 weeks to December 28. 

“After a strong start to our peak trade season with higher year-on-year trading across the Black Friday and Cyber Monday online events, the bushfire and sustained drought conditions have impacted December trading,” said Super Retail Group chief executive officer Anthony Heraghty said. 

“Whilst we expect the impact to be one-off, it is difficult to estimate how long it will take for sales to recover, specifically in the outdoor sector.”

According to Super Retail, while all brands have been impacted, Macpac and BCF were most affected due to their higher exposure to the outdoor category. More than 50 BCF stores have been directly impacted by fire and/or drought, and the associated smoke haze hurt the business’ peak trading season, and several stores were forced to temporarily close.

Supercheap Auto also saw impacted sales in regional NSW, Victoria and Queensland, Rebel saw slowed sales momentum.

“While first half earnings were challenged by exceptional circumstances, there are a number of positives in the expected result that bode well for the second half,” Heraghty said. 

For one, online sales over the period grew by 22 per cent, showcasing a strong omni-channel strategy delivered across the group’s brands, while margin and sales largely stabilised in the second quarter. 

As such, the business is now expecting its first half earnings before interest and tax to land between $113 million and $115 million, subject to external review. 

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