Dan Murphy’s, BWS owner Endeavour cops double whammy hit from Woolworths strike, weak consumer demand

Dan Murphy’s owner Endeavour has copped a double-whammy from a strike action that crippled Woolworths in the lead-up to Christmas last year and weak consumer demand for booze.

The group — which is also behind BWS and a network of pubs and hotels under the ALH banner — reported flat sales at $6.6 billion and a 15.1 per cent fall in net profit to $298 million in the 27 weeks ended January 5.

Retail sales at its 1725 bottle shops slid 1.5 per cent to $5.5b. It’s a result outgoing chief executive Steve Donohue blamed on subdued consumer spending and and an estimated $40m to $50m hit in lost sales due to the 17-day strike by Woolworths warehouse workers in Victoria and the ACT late last year.

“Our challenge was the fact that that we . . . didn’t have sufficient stock to support promotion,” Mr Donohue told analysts.

“If you’re able to remove any impacts of the supply chain disruption that affected us on a national scale . . . we think we would have continued to grown share as we’ve done in the preceding quarters.”

Delivering his last financial results in the top job, Mr Donohue said customers were still challenged by cost of living pressures.

“You are seeing down trading across a number of categories,” he said.

“Probably the most acute is in the champagne to sparkling wine space. I’ve talked before about the material price increases that have flowed through in French champagne at a time when consumers really are challenged from the cost of living standpoint.”

Endeavour shares were down 7.1 per cent to $4.16 just before lunchtime.

Mr Donohue also pointed to the increase in alcohol excise that kicked in earlier this month, requiring distillers and brewers to pay $104.31 per litre of alcohol.

“Spirits are probably one of the more affected, obviously, by the CPI indexation of excise,” he said.

“That’s where we do see some of the more larger declines in volume, offset a little bit by unit price, but not enough to make up for some of those volume decline.”

Endeavour said sales at its 350 hotels grew by 3.3 per cent to $1.1b with sales momentum increasing throughout the half. The board declared an interim dividend of 12.5c a share.

Endeavour in September announced Mr Donohue’s departure after 30 years with the company, including more than six years in the top job. He will be replaced by chair Ari Mervis as executive chair.

Endeavour said sales growth for the first seven weeks of calendar 2025 were weak for retail at just 0.8 but 4.7 per cent better for its hotels.

It said retail sales so far this half have been impacted by ongoing effects of supply chain disruption but it expected market conditions to improve as inflation moderates.

The company plans to open up to six new Dan Murphy’s store in the second half.

“Dan’s is still the cheapest and it’s a cheapest by a long way,” Mr Donohue said.

“Reminding people of that and encouraging them to travel past the two or three competitor stores they’ve got to get to Dan Murphy’s will be a continued focus for the team.”