Annual reports and annual meetings are usually only of gripping interest to a small group of people but I have to say that The Trusts staff and I took enormous pleasure in August, in reporting to Trustees and WATS Board members that this business is starting to really rock.
And while you may not find the details as interesting as the Trustees and Directors did, it is your business and so I have great pleasure in telling you also that your business is in very good shape as we head into a period that will almost certainly offer up far more opportunities than the last five did.
We are trimmed down and much more efficient. Our retail stores are now awesome. They lead the way in style, customer service, range, price and very importantly they acknowledge that our customers want a better shopping experience.
Westies are stylish and they have character, they love the look and feel of the West and they have responded incredibly well to the new stores. They also have a new profile with new and different preferences; they drink less mass-produced beer and more craft beer, they drink more wine, fewer RTDs and more cider; more women are choosing to shop with us which was, of course, one of our goals when we embarked on our new style and image.
It was interesting at our annual meeting to spend a lot of time studying the annual accounts because as Brian Corban, our chairman, said, accounts can just be a mass of figures or they can tell a story about which way the market and the business is heading. In every case they can provide early warning signals of when things are going wrong, early indicators of what we are doing well, clues to things we should be doing differently. In every case they can lead you directly to the hidden causes of problems and to the potential solution. Coupled with public opinion surveys, they are powerful tools.
For example, our figures tell us that we are selling more in total, but we are selling less to each person. This tells us that even though each customer is buying less per visit than they did a few years back, more people are shopping with us. And that tells us that we are winning new customers who now choose to shop with us rather than elsewhere. Which is exactly what we said several years ago, we wanted to happen.
Also, we wanted to sell more but we didn’t want to do it by irresponsibly trying to sell more alcohol to the same group of customers. Our alternative, therefore, was to transform our operation so that more people wanted to shop with us. This we have done.
This is part of that delicate balancing act of running a successful and profitable business on behalf of the community that owns The Trusts, and yet growing our business responsibly.
We’ve also become hugely more efficient which means that while the market remains very tough overall, more of the money that comes into our bank accounts stays there, increasing our profits. In the Portage area the return on sales (the amount that stayed in our bank accounts) is five times greater than it was before 2011; in the Waitakere area it is four times.
This is a major contributor to profit. It helps us to grow and run the business better and enables us to give back more to our community.
One area in which we have been very successful is in being able to do much better deals with our suppliers. As a result supplier-support of The Trusts topped $1 million over the last year.
Nor is this all just about improvements in the retail stores (although those have been pretty spectacular in some stores); the hospitality sector is also performing better. This side of our business has benefited from the general improvements in efficiency throughout our operations and also from us quitting under-performing premises that we could see no prospect of turning around.
Having achieved this new bedrock of efficiency, we have developed exciting plans for the future. We have confidence that the market will improve generally over the next five or so years and the West Auckland population will continue to grow.
Accordingly, there will be a continued increase in the number of people seeking out local bars and restaurants. However, that greater customer base will be demanding modern surroundings and food and beverage options and it is our challenge to give them what they’re wanting, just as we did with retail stores. Thus, hospitality, too, will see a transformation and emerge new, different and in tune with the market we serve.
Transformations are not brought about by one person but by the whole team committing to a single outcome and then moving mountains to make it happen. That is what we have here at The Trusts. I want to acknowledge the truly outstanding staff we have, led by exceptional managers who I believe, are among the best in New Zealand.
I wish to sincerely thank the board for re-electing Brian Corban as our chairman. Brian is an outstanding business leader. He had faith in the staff and stood firmly behind us when we adopted our turnaround strategy back in 2011, and he has been a rock for me in particular. With his support and that of the Trustees and Directors we launched a very bold strategy to ensure that The Trusts organisation emerged from a market very depressed by the global financial crisis into a business, trimmed, efficient, and oriented to the needs and wants of the West Auckland market.