Londis Driving Forward Despite Difficult Market Conditions

May 11, 2012

ADM Londis plc, the Irish symbol group owned by retailers for retailers reported a robust performance in 2011 recording a 37% growth in pre tax profits and a dividend payout to shareholders of €0.25 per share. This very creditable performance was underpinned by careful cost control and a significant strategic focus on procurement that saw profit before tax increase to €1.5m in 2011 on wholesale sales of €220m.

Like for like wholesale sales performed within 2% of 2010 levels underpinning the ability of the Londis brand to compete in today’s competitive value focused market. This positive outturn was achieved despite intense margin support initiatives by the Group for its retailers. 

Commenting on the performance, Stephen O’Riordan, CEO ADM Londis said, “Core to the Group’s strategy in 2011 was an ongoing commitment to provide high levels of pricing and promotional support to Group retailers. This commitment was reflected in the excellent organic performance of Londis retailers who enjoyed strong momentum as the year progressed, outperforming the convenience market during the crucial three month Christmas shopping period. This reflects very positively the competitive edge secured for Londis retailers in 2011.” 

Reflecting its support for its retailers, ADM Londis invested heavily in price and item advertising throughout 2011, supported by exceptional pricing and promotional campaigns and a value driven procurement focus. 2011 was also the first year of the Group’s sponsorship of the TV programme ‘Come Dine with Me’ on TV3 which has proven a resounding success giving Londis a daily primetime presence in households throughout the country. To date the sponsorship has delivered strong results in share of voice metrics as well as enabling innovative social media engagement.  

A key factor in the Group’s positive performance and that of the retail members has been ADM Londis’s continued focus on the development of e-retailing. The launch of iSIS, the Group’s web based intuitive ordering portal has enabled Londis retailers fine tune their offering and maximise margin. The Group’s commitment to intelligent retailing was further reinforced with the provision of iPads to Londis retailers providing a business tool to access their entire store operation anywhere at any time.  

O’Riordan expanded, “The initiative is the culmination of a five year €5m investment strategy, delivering efficiencies to our retail members, enhancing our customer experience in store and differentiating Londis as one of the most technologically progressive groups in Ireland. In short with 80% of our retailers now embracing e-retailing, this has enabled intuitive, instantaneous and intelligent solutions from the warehouse through to the shop floor.” 

Looking ahead it is clear that all retailers remain under immense pressure given downward price pressure and reduced consumer spending. With its unique structure Londis is optimally placed to alleviate some of this pressure for retail members, ensuring the overriding focus remains on intense price and margin support to retail members.  

O’Riordan continued, “With this ethos in mind, the Group is set to launch one of the biggest strategic initiatives in its history with the launch of a centralised chilled offering later this summer. This will deliver real benefits to Londis retailers in terms of heightened efficiencies, consistent supply, a finely tuned consumer offering and higher sales and margin. This investment will enhance the sustainability at a Group and store level in these still challenging times for the market.”

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