Booze group's price strategy pays off, but profit falls

The owner of two of the nation's best-known bottle shop chains continues to lift sales in its flagship retail business after cutting prices to draw in more customers.

But the outlook for consumer spending remains uncertain as higher interest rates, cost of living pressures and the conflict in the Middle East weigh on sentiment.

Endeavour Group, which owns the Dan Murphy's and BWS networks, made a bottom line net profit of $52 million for the year ended June 28, a fall of almost 90 per cent.

But the 2025/26 result was skewed by a one-off $311 million post-tax expense related to the writedown of certain assets and costs related to its strategy review.

It that's taken out, its profit came to $363 million, a fall of almost 15 per cent, on sales of $12.2 billion, up 1.3 per cent.

"Our retail business is consistently gaining share, delivering 10 consecutive months of sales growth," chief executive Jayne Hrdlicka said on Monday.

That growth followed the introduction of lower shelf prices in Dan Murphy's at the end of the first quarter of financial year 2026.

It also increased promotional activity across both Dan Murphy's and BWS.

"Sales momentum in retail is building with customers responding positively to our renewed focus on value and price leadership," the booze boss said.

Retail sales totalled $10 billion in the year, up 0.7 per cent, with Dan Murphy's contributing to most of that with a gain of one per cent.

However, Endeavour's retail gross profit margin declined by 80 basis points on the back of its lower shelf prices strategy.

Endeavour's hotel business, made up of hundreds of pubs across Australia, generated $2.2 billion in sales, up 4.2 per cent.

Looking ahead, retail sales for the first seven weeks of 2026/27 are positive.

"While the group enjoyed a strong start to the year in retail, the outlook for consumer spending remains uncertain," the group said.