Mercury (Hobart)

GLOBAL SUPPLY IS MOTHER OF ALL PROBLEMS

- ELI GREENBLAT

BABY Bunting boss Matt Spencer has warned that supply chain constraint­s and other issues had ratcheted up the cost of goods for the baby goods retailer.

Mr Spencer said the company had worked with suppliers to manage cost changes and strike new efficienci­es to counter the blowout in shipping charges and avoid price rises for consumers where possible.

Baby Bunting also provided a trading update, which showed that although same store sales growth was still negative, it had improved since August despite ongoing lockdowns across NSW, Victoria and the ACT.

Addressing shareholde­rs at the retailer’s annual general meeting on Tuesday, Mr

Spencer mirrored comments made recently by other Australian retailers which have faced steeper shipping costs this year caused by disruption­s to the global supply chain caused by the pandemic.

“Ports both internatio­nally and domestical­ly have had some disruption; in China there have been Covidrelat­ed shutdowns and weather-related closures and in Australia we are seeing some industrial disputes,” Mr Spencer said.

Mr Spencer said as a result of sourcing challenges and the increase in shipping costs, the cost of goods had increased in some cases, but Baby Bunting had worked hard to avoid price rises where possible.

Turning to recent trading, year to date same store sales were down 1.3 per cent for July to October 3.

Excluding stores in NSW and the ACT, comparable store sales were up 4.7 per cent. Total sales growth year to date was up 1.5 per cent.

From week seven to week 14, comparable sales growth was 3.2 per cent,

Mr Spencer said online continues to grow strongly, up nearly 38 per cent year-todate. The retailer plans to open six to eight new stores in Australia this financial year.

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