Booze giant eyes job cuts, as consumers curb thirst
One of Australia’s biggest alcohol sellers is trying to ring-fence its business and protect its customers as conflict in the Middle East threatens supply chains and increases fuel and freight costs.
Endeavor Group, which owns more than 1,500 Dan Murphy’s and BWS stores, has signaled layoffs in its new financial year as part of a $100 million cost-saving campaign.
Endeavor is making the move after seeing relatively flat sales of $2.4 billion in the third quarter of fiscal 2026.
While sales were supported by strong Easter trading, consumer demand remains weak.
The group’s outlook is in line with major rival Coles, which last week said sales at its Liquorland business fell 3.9 per cent to $781 million in the first half.
Supermarket group boss Leah Weckert said consumers were counting their money as confidence was shaken after the war began on February 28.
“Liquor is a more discretionary category than something like food,” he said last week.
“People will decide to reduce that space to make room for the increased constraints they may see in their budgets on things like mortgages, energy or food.”
Endeavor, which also owns hundreds of bars, said sales at those venues began to soften in March due to food and bar sales, gaming activities and accommodation bookings.
This was despite overall sales growth in the hotels division rising 3.7 percent to $531 million in the three months ended April 26.
Endeavor is now adding another $400 million to its inventory to create a buffer against potential supply chain issues resulting from the war.
It also closely monitors price pressures in the supply chain due to high fuel costs.
“Endeavor is working with its suppliers to manage these pressures to reduce structural cost inflation and minimize the impact on customers,” it said in a statement.
The company warned that it would incur additional fuel and transportation-related costs of $6 million to $8 million over the remainder of its fiscal year.
RBC Capital Markets analyst Michael Toner said despite the consumer outlook, Endeavor’s overall sales were above expectations.
“But from a forward-looking perspective, (six months to date) sales growth (including April) is showing signs of slowing as the cost of living puts pressure on spending,” he said.
Earlier this year CEO Jayne Hrdlicka said the group was putting customers ahead of profits after cutting prices to stay ahead in a highly competitive market.
“To be clear, the aim is for Dan Murphy to never be outdone in terms of price, for any reason,” he said at the half-time results briefing in March.
Endeavor shares fell 7.5 percent in morning trading and fell 4.3 percent to $3.28 by midday trading.
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