Success of big box stores lifts Mitre 10

DIY chain Mitre 10 has recorded the highest sales revenue figures in its 41-year history, after last year cracking the billion-dollar barrier.

The chain's revenue was $1.13 billion in the year ended June 30 - up 8.7 per cent on the previous year's $1.04 billion.

Martin Dippie, chairman of the 81-store business, said the result was outstanding.

"Everyone involved in the Mitre 10 business is pleased to see the company performing so well and thriving in a highly competitive environment," Dippie said.

Market competitor Bunnings now has 25 Bunnings Warehouse stores, 19 smaller format stores and six trade centres and declared $899 millon sales for the year
ended June 30.

Mitre 10's 64 co-operative members also just got a lot richer - Dippie said member distributions rose 17.1 per cent, from last year's $57.3 million to $67.2 million.

Sales from the 38 bigger-format Mitre 10 Mega stores beat the average - up 9.3 per cent on last year.

Chief executive Neil Cowie attributed that to the customer appeal of the large stores.

"They're better stores. They're big with garden centres and trade and a bigger retail footprint offering a bigger range."

Cowie attributed the financial performance of the chain to a combination of factors.

"New Zealand home ownership is quite high. DIY is strong. Our garden centres and trade businesses are doing well," he said.

"A lot of the growth over the 41 years is to do with what we've focused on. It was a small business when it started and Mega - 10 years ago - was embraced by our membership because we knew we had to change.

"Members are very entrepreneurial because they're owner-operators so they want to succeed."

Two new stores will open this financial year - the first in Queenstown before Christmas replacing an existing smaller store, with a new Mega opening in Christchurch in the middle of next year.

That will take the chain up to 82 stores including 40 Mega stores.

"Online sales are very small at this stage but we don't say what it is," Cowie said.
"We have doubled the number of products online in the last 12 months and we
now have almost 10,000 items online that can be purchased.

"But we have five to six out of 10 customers who go online before they go to a store.

"The space we're in is still very much about the experience."

Cowie named the trade and garden sectors as standouts, along with paint and hardware and said the good summer had helped drive more business as customers focused on the outdoors.

The cool winter had also helped in the latest financial year, with strong sales of heating equipment, particularly fireplaces, he said.

The group has 48 Hammer Hardware stores but the latest result does not include those figures because Cowie said they were a subsidiary business.