Baby Bunting posts record sales against COVID and logistics headwinds

In an age of retail uncertainty, backed by COVID-related trading restrictions and worldwide supply-chain disruptions, Baby Bunting has posted record sales for FY22.

The baby goods retailer is Australia’s largest specialty retailer for baby goods and is one of many Large Format Retailers who’ve gripped online shopping by the horns and adapted to a rapidly evolving retail landscape. More impressive still is the company’s ability to generate milestone sales in the wake of crippling pandemic restrictions and ongoing logistical issues.

The Numbers

Baby Bunting reported an increase in year-on-year sales of 38 per cent, breaking through half a billion dollars in sales for the first time in their forty-four-year history. Sales are also up 25.2 per cent against FY20 results.

The company has not only raised the bar in bricks and mortar sales but have seen exceptional performance in their online consumer market. Online sales made up 22.2 per cent of total sales, growing 24.2 per cent in the 12 months to 30 June 2022 ($112.7 million annual growth).

Thriving in uncertain times

The supply-chain crisis, triggered by COVID lockdowns and restrictions which were sporadically introduced across different countries at different times, has been plaguing retailers since 2021.

With the foresight into potential supply chain-led hazards, the company set about making massive improvements to their supply chain back in August 2019, creating a centralised supply chain planning platform with the help of RELEX Solutions. Chief Operating Officer Scott Teal said it “helped us improve how we manage and optimise our resources – labour, inventory and freight.” You can read all about it in RELEX’s case study.

Last financial year’s remarkable performance is a reason for celebration. However, Baby Bunting is not one to rest on their laurels. With exciting new initiatives on the horizon further growth is expected for FY23.

Expansion

The timing of Baby Bunting’s announcement of record-breaking sales results was somewhat romantic, as it occurred on the same day as it opened its first New Zealand store. The Auckland branch will be followed by a second store in Christchurch later this financial year, with the expectation that a total of 10 stores will eventually be established.

The company will continue ramping up its private label operations, 4Baby, Bilbi and Jengo, which contributed a whopping 45.3 per cent of total sales in FY22.

The lesson for Australian retailers is that the traditional retail model is not to be relied upon for sales success. Successful bricks and mortar stores are leaning on online retail sales and looking to alternative market opportunities (perhaps in smaller niches) through private labels.

Retailers are being challenged. But as Baby Bunting seems to consistently prove, challenges can be overcome – and record sales overtaken.

Baby Bunting is a Properties & Pathways tenant in one of our longest-standing commercial property syndicates, Pathway 6 Unit Trust. To find out how you can invest alongside us in a robust commercial real estate investment, get in touch today.