In a bid to generate new earnings streams, forty new Foodchain stores are to be opened by store operator David Jones over the next five years. The project will cost an estimated A$160m and chairman Dick Warburton explained that the main focus is on driving growth after solid fiscal 2000 results heralded a turnaround in the chain’s fortunes over the past three years.
The company’s first Foodchain store, which operates in a “very specific niche” was said to be “encouraging” when it opened last month. “We believe that we need to have around seven or eight stores to be in the profitable zone,” explained Warburton, adding, “that number should be in operation by the end of the financial year.”
The full quota of forty Foodchain stores is expected to generate annual returns A$500m, making up less than 1% of the total food market in Australia, but Warburton insisted that “We are super confident we’re going to outperform the competition.”
This means that despite the recent disappointing slip in share value, Warburton is confident: “I believe a good story cannot continue to go unnoticed or unrewarded.”