CORPORATE REVIEW2012

ABOUT US .............................................4

OUR NETWORK .....................................6

YEAR IN REVIEW ...................................8

GROUP DEVELOPMENT ........................12

CORPORATE RESPONSIBILITY................13

ENVIRONMENT .....................................14

COMMUNITY ........................................16

SYSTEMS ...............................................18

INTERNATIONAL OPERATIONS ..............19

LOGISTICS .............................................20

SUPER RETAIL COMMERCIAL ................21

AUTO RETAILING ...................................22

LEISURE RETAILING - BCF ......................24

LEISURE RETAILING

RAY’S OUTDOORS .................................26

LEISURE RETAILING - FCO .....................28

SPORTS RETAILING ................................30

OUR TEAM ............................................32

TEAM MEMBER

DEVELOPMENT .....................................35

APPENDIX .............................................36

PERFORMANCE TRENDS .......................37

FINANCIAL STATEMENTS ......................38

INTRODUCTION 3

CONTENTS

FEEDBACK

ABOUT THIS REVIEWThis review is designed to be an easy to read

record of our achievements against the objectives

and strategies of our strategic plan. It also sets

out our financial position for the 2011-2012 year.

Each chapter outlines and analyses the

performance, challenges and key initiatives within

each of our divisions during the past twelve

months. The review, along with our Annual Report

are methods by which we report on our activities

to our stakeholders and the general public.

This review and past reviews are available to view

online at www.superretailgroup.com

Only 700 copies of this review were printed, using

recycled paper.

© 2012

Super Retail Group

751 Gympie Road

Lawnton Queensland 4500

AUSTRALIA

We welcome your feedback and suggestions

on this review. Please refer any comments to

our communications team:

Telephone: +61 7 3482 7500

Fax: +61 7 3482 7161

Email: communications@superretailgroup.com

4 ABOUT US

Super Retail Group is one of Australasia’s Top 10 corporate retailers and is

listed on the Australian Stock Exchange. The Group comprises eight businesses:

Amart All Sports, BCF Boating Camping Fishing, Goldcross Cycles, FCO Fishing

Camping Outdoors, Ray’s Outdoors, Rebel Sport, Supercheap Auto and Super

Retail Commercial.

Started in 1972 and publicly listed in 2004, the Group has grown to become

one of Australasia’s leading specialty retailers with over 585 stores and

annualised turnover in excess of $1.9 billion. With operations in Australia, New

Zealand and China, Super Retail Group’s success is underpinned by a continued

focus on maintaining and enhancing our culture, products and core values,

which are embodied by our more than 11,500 passionate team members.

Our ability to deliver great value, choices, products and service to our

customers, in whichever manner they prefer to experience our brands, is

achieved through our continued focus on new product introduction, sourcing

and supply chain initiatives, and the further development of our integrated

multi-channel customer offer.

The defining principle of our businesses is to offer products and services that

will enhance our customers’ leisure time. In many cases we are selling products

to enable our customers to enjoy their passion, whether it’s the car that’s their

pride and joy, taking the family fishing or training to take part in a triathlon.

ABOUT US

To provide solutions and engaging experiences that enable our customers to make the most of their leisure time.

OUR MISSION

Products and innovation

Identifying and launching innovative brands, products,

services and concepts quicker than our competitors whilst

maintaining the relevance of our core range

Passionate team members

Providing opportunities and maintaining a culture that

attract, develop, engage and retain loyal and passionate

team members

Customer engagement

Having a clear understanding of our customers’

requirements and delivering friendly, informative, engaging

customer experiences which allow them to shop their way

Business systems Leveraging our core systems, infrastructure and processes

to provide agile and cost effective multi-channel solutions

Speed and discipline Executing our plans with speed and discipline to ensure we

achieve our objectives

Partner engagement Developing collaborative business relationships with our

partners to enable delivery of mutual goals

To be Australasia’s most highly

regarded specialty retailer

To be one of the five largest Australasian retail companies

To achieve the highest team member retention across the retail sector

To achieve higher customer satisfaction ratings than our competitors in the markets in which we operate

To provide returns to our shareholders that exceed the benchmark ASX200 by 5%

VISION GOALS

DIFFERENTIATORS

ABOUT US 5

INDIA

OUR NETWORK6

OUR NETWORK

STORE NUMBERS

BRAND LOCATIONS TEAM MEMBERS

BRAND ACT NSW NT QLD TAS VIC WA NZ

AMART ALL SPORTS 0 3 1 25 0 0 0 0

BCF 2 26 1 26 0 19 13 0

FCO n/a n/a n/a n/a n/a n/a n/a 13

GOLDCROSS CYCLES 0 0 0 8 0 11 0 0

RAY’S OUTDOORS 1 10 0 9 1 19 7 0

REBEL SPORT 4 32 0 10 1 26 12 0

SUPERCHEAP AUTO 4 60 3 76 5 49 26 43

TOTAL 11 131 5 154 7 124 58 56

STORES BY STATE

BRANDS

AMART ALL SPORTS

BCF

FCO

GOLDCROSS CYCLES

GROUP SERVICES

RAY’S OUTDOORS

REBEL SPORT

SUPERCHEAP AUTO

DISTRIBUTION CENTRES

35

91

13

19

3

52

91

281

6

855

1633

129

203

586

728

3808

3444

338

AMART ALL SPORTS

BCF

FCO

GOLDCROSS CYCLES

RAY’S OUTDOORS

REBEL SPORT

SUPERCHEAP AUTO

CHINA

VIETNAMVIETNAMVIETNAMVIETNAMVIETNAM

THAILANDTHAILANDTHAILANDTHAILANDTHAILAND

SINGAPORESINGAPORESINGAPORESINGAPORESINGAPORESINGAPORESINGAPORE

OUR SUPPLY CHAIN 7

OUR SUPPLY CHAIN

LEGEND

SUPER RETAIL GROUPDISTRIBUTION CENTRE

ROAD FREIGHT

SHIPPING

AIR FREIGHT

In 2003, we started to build the

foundations to expand the Group’s

operations beyond that of our business

retailing auto products. Our move

into the retailing of outdoor leisure

products and most recently the retailing

of sports products was foreshadowed

at an executive team strategy planning

workshop held in that year.

We put in place a plan that included

both the ongoing organic development

of our existing businesses but also the

acquisition of market leading retail

businesses in relevant and connected

retail categories. Each of our businesses

retail products that our customers

predominantly use as part of their leisure

experiences – in many cases we are

selling products to help our customers

enjoy their passion whether it’s the car

that’s their pride and joy, taking the

family fishing or training to take part in a

triathlon.

We also set about building an

organisation in which our various

individual retail businesses could derive

synergy benefits from the scale and

capability of the Group’s sourcing, supply

chain, marketing and IT infrastructure

and operations. This has allowed each

business to develop a stronger offer

for its respective group of customers

than it would have been able to do as a

standalone business.

The 2012 Financial Year has seen the

Group take a major step forward with

the acquisition of the Rebel Sport and

Amart All Sports businesses at the end of

October 2011. We thank our shareholders

for the support of the capital raising

to partially fund the acquisition. We

are confident that we have acquired a

business that, although it is already the

clear market leader, has the potential for

significant growth over the coming years.

The focus on store development, sourcing

and range management, supply chain

improvements and business capability

development has continued to drive the

performance of our Auto and Leisure

Retail businesses which have again

enjoyed successful years. We have also

made good progress in developing

our integrated multi-channel retail

capabilities including the Group wide

launch of a customer contact centre,

dynamic freight costing, a click and collect

service and mobile enabled websites.

The foundation stone of performance

across the Group continues to be the

Group’s culture and the commitment and

passion of our team members. We now

employ around 11,500 team members

across the Group and on behalf of all

shareholders we would like to thank

all members of the team for their huge

efforts and their ongoing contribution to

our success.

GROUP RESULTS

Sales grew by 51.4% to $1.65 billion

and profit after tax grew by 50% to

$83.5 million. This strong growth has

been achieved through a combination

of the organic growth of our Auto and

Leisure Retail businesses and the post-

acquisition contribution of the Sports

Retailing businesses, which has been

consolidated from 30 October 2011.

Solid like-for-like sales growth, continued

underlying improvement in gross margins

and further reduction in operating costs

as a percentage of sales all contributed

to the strong organic growth in profit in

our existing businesses. This has been

achieved through the continued focus on

new product introduction, sourcing and

supply chain initiatives, and the further

development of our integrated multi-

channel customer offer.

YEAR IN REVIEW8

YEAR IN REVIEW

Marks the 40th anniversary of the company that has evolved from

distributing battery chargers out of the home of our founders Reg and

Hazel Rowe to the group of leading retail businesses it is today.

We are proud that in such a milestone year, we have been able to maintain the continued success and progress of our company and to be able to report another strong set of financial results.

2012

YEAR IN REVIEW 9

AUTO AND CYCLE RETAILING

The Supercheap Auto business has had another strong year. The

work done over the past six years to reposition the Supercheap

Auto brand through the store refurbishment program, improved

product quality and presentation and through partnering with

the world’s best automotive and tool product brands continues

to drive this performance.

Nine new stores were opened during the year while two stores

were closed and 41 stores were refurbished including three

as Superstores. At 30 June the business had 281 stores with

potential to grow to around 320 stores over the next five years.

The business plans to refurbish another 50 stores in the coming

two years and to convert another 10 stores to Superstores.

The Electrical and Power categories delivered particularly

strong growth through a number of new product and ranging

initiatives whilst the Car Care and Car Audio/Visual categories

also continued to perform extremely well. Sales growth was

relatively consistent across all the states of Australia and in New

Zealand, although the business performed most strongly in

areas with mining activity.

Towards the end of the year, the business launched its loyalty

program, Supercheap Auto Club Plus in the New Zealand

market. This exciting initiative will provide the opportunity for

the business to gain a deeper understanding of its customers

and to develop another marketing channel to drive sales. It is

expected that the loyalty program will be launched in Australia

by the final quarter of the 2012 calendar year.

At the end of the year, the business announced the launch of

its new trade customer offer Auto Trade Direct. This offer is

targeted towards auto mechanics and will provide a parts and

accessories delivery service operating from a small number of

designated hub stores. This offering will again be trialled in New

Zealand before being launched in Australia.

Although the Goldcross Cycles business continued to track

below expectations, many of the initiatives introduced over

the last two years have generated positive outcomes. This was

reflected in the successful launch of a number of private brand

products, improvements in range management and a number

of supply chain efficiencies.

The biggest impact on profitability continues to be the weak

sales per square metre being achieved in the business,

primarily as a result of the number of stores that are oversize.

Consequently, we plan to convert the larger Goldcross Cycles

stores into Amart All Sports stores and to retain a 130m2 to

150m2 Goldcross Cycles outlet in these stores as a store-within-

a-store concept. It is expected that up to six stores will be

converted in the coming year, which should see the business

move closer to a break even position. The link to the Amart All

Sports business and the fact that cycling is predominantly a

sport and leisure activity will see the Goldcross Cycles business

transfer to the Sports Retailing division in the coming year.

LEISURE RETAILING

BCF Boating Camping Fishing continued to perform strongly

with high single digit like-for-like sales growth and an

improvement in gross margin. BCF also achieved like-for-like

growth in transaction numbers, units sold and average unit

value. There are now close to one million members of the BCF

Club – the businesses loyalty program.

The Fishing category performed extremely well, benefitting

from the high volume of fish stock across the country after

the last two years’ wet weather, a number of new product

initiatives and the work done to tailor the range to local

demand at a store level. The business also performed

consistently well across the country.

Thirteen new BCF stores were opened during the year, taking

total store numbers to 91. Expectations for future total store

numbers have increased to around 120 as the business expects

to be able to operate a number of smaller format stores at

around 800m2 in regional locations.

The work started last year to refresh the Ray’s Outdoors

business continued through the year. The business achieved

low single digit like-for-like sales growth driven by an increase

in transaction numbers and average item value. However,

gross margin was lower than the prior period as the business

introduced a higher proportion of international branded

product and cleared aged inventory.

The 4x4 category performed well following the introduction of

extended product ranges and the performance of the Footwear

category was also encouraging reflecting the partnership with a

number of major brands such as Merrell, Columbia and North

Face. The Apparel range has also been redesigned and sales of

the 2012 Winter range are promising.

“We are selling products to help our customers enjoy their passion whether it’s the car that’s their pride and joy, taking the family fishing or training to take part in a triathlon.”

The business opened seven and closed five stores during

the year to bring total stores trading to 52. The business will

commence a program of store refurbishments in the next year

as the current store fit-out and design has become dated. The

business expects to be able to develop a network of 75 stores

across Australia.

The division launched its new business FCO Fishing Camping

Outdoors in New Zealand in November 2011. The business

takes elements of both the BCF and Ray’s Outdoors businesses

to provide a customer offer designed specifically for the New

Zealand market.

By the end of the year, the business had opened 13 stores all

in the North Island. It is management’s plan to bed down and

fine tune the performance of these stores before committing

further capital to store roll-out. It is anticipated that there is the

potential for up to 25 FCO stores.

Early performance was encouraging as the business traded

well during the summer period but was slower than expected

in the autumn/early winter period. Customer conversion and

membership of the FCO loyalty program were pleasing whilst

gross margins tracked ahead of expectations.

Customer numbers fell below expectations with research

indicating that customers’ understanding of the full breadth of

products available in the stores is limited so a marketing push is

underway to highlight the spread of product categories.

SPORTS RETAILING

The Rebel Sport and Amart All Sports businesses were acquired

with effect from 30 October 2011.

The initial focus of management post-acquisition has been to

reenergise and engage the team, clear aged inventory, establish

a focus on like-for-like sales growth, rebuild relationships with

trade partners, integrate the business within the Group and to

develop the strategies to grow the businesses over the next five

years.

Good progress has been made in all areas. A major driver of

sales improvement was the clearance of aged inventory which

was reduced to around 5% of total inventory by the end of the

year. Underlying performance was pleasing and reflected the

more competitive pricing and promotional position adopted

since acquisition. Sales growth was achieved primarily through

growth in customer traffic and conversion whilst average

transaction value was below the prior period reflecting the

changes in pricing and promotion.

The Footwear and Apparel categories both performed strongly

despite the increased competition from international websites.

Performance was reasonably strong across all regions with

the important New South Wales business improving through

the period from quite a depressed position at the time of

acquisition.

The business closed the two stores trading under the brand

Performance Sports with the space being reallocated to the

Rebel Sport brand. Two Rebel Sport stores were opened post

acquisition whilst one Rebel Sport and one Amart All Sports

store were closed. At 30 June, there were 91 Rebel Sport stores

and 35 Amart All Sports stores trading across Australia. The

business expects to be able to develop a network of around 100

Rebel Sport stores and 85 Amart All Sports stores.

Work has been completed on the brand strategies for both

businesses and future store design work is in progress. The

business expects to refurbish a number of stores in the coming

year and will test a number of new concepts before a wider roll-

out. Management believes there are significant opportunities to

improve the shopping experience for customers.

The synergy benefits anticipated at the time of acquisition

are on track with a number of purchasing and supply chain

benefits already realised in addition to a reduction in executive

management positions. The business will implement Super

Retail Group’s Enterprise Resource Planning (ERP) system in

the coming year and will begin to source a number of its own

private brand products through the Group’s International

Operations team rather than through third party agents.

GROUP LOGISTICS AND SOURCING

The Group has continued to invest in developing its logistics

operations to provide more efficient support for the Group’s

businesses. The warehouse management systems were

successfully upgraded and towards the end of the year, the New

Zealand logistics operations were successfully relocated into a

larger distribution centre.

The Group has completed a review of its requirements for the

next 10 years and has determined that within the next two

years a new distribution centre will be established in Sydney

whilst the two Brisbane distribution centres will be relocated

into one larger centre. This will enable the Group to fully

support the requirements of the Sports Retailing businesses, the

anticipated increase in private branded and exclusive product

and to generate freight savings for both the Group and its Trade

Partners. At the same time, the Group will be able to reduce its

requirement for expensive off-site storage at peak times.

YEAR IN REVIEW10

“The foundation stone of performance across the Group continues to be the Group’s culture and the commitment and passion of our team members.”

The Group’s International Operations team based in China has again significantly increased their contribution to the Group with an

increase in the value of product sourced directly and through increasing the number of pre-shipment inspections managed by the team.

The team has also worked with its Australian colleagues to establish scan pack arrangements for apparel items to go direct to store from

China. The team has also established a sport products sourcing unit to support the Sports Retailing division.

YEAR IN REVIEW 11

Our focus over the coming year will

be to continue the growth in sales

and the improvement in margins

and working capital efficiency of

each of our existing businesses. At

the same time, we will continue

to work on developing our multi-

channel capabilities to enable

our businesses to provide our

customers with an engaging offer

that inspires them to continue to

shop with us in store or on line

at whatever time of day or at

whatever location suits them.

We are confident that we can

continue to deliver solid like-for-

like sales growth even if retail

conditions remain subdued and we

expect to be able to open around

10 new stores across all of our

divisions.

We will continue to develop our

loyalty programs across the Group

and increasingly use data analytics

to develop relevant targeted

marketing campaigns. We will

launch a new offer for the trade

mechanic customer in our Auto

Retailing division.

We have many initiatives

underway to drive the

performance of our businesses and

to build our capabilities and we

look forward to reporting on our

progress in the coming years.

Peter Birtles

Managing Director and

Chief Executive Officer

LOOKING FORWARD

CORPORATE SOCIAL RESPONSIBILITY

The Group has maintained its support for a variety of charities raising funds for

research into childhood diseases in particular selling product in store to support

BrAshA-T Ataxia Telangiectasia Limited, Sids and Kids, Canteen and @Heart. The

Group is particularly passionate about the support it provides to BrAshA-T which

raises funds for research into Ataxia Telangiectasia an extremely rare but very serious

degenerative condition.

Supercheap Auto provides support to a range of safe driving campaigns and is

supporting an education program aimed at school age drivers. BCF and Ray’s

Outdoors raise funds for the Coastguard and Cancer Council respectively through

encouraging their customers to round up for charity. Rebel and Amart support a

range of national and local charities with Rebel running its annual fund raising dinner.

The Group has continued to work on its sustainability initiatives including the

reduction and recycling of packaging material, power consumption and plastic bag

usage and through the rollout of car battery and engine oil recycling arrangements

in its Supercheap Auto business. The Group achieved a 10% improvement in the

amount of packaging material recycled and collected nearly over 10,000 car batteries

during the year.

The Group and its businesses are signatories to the Australian Packaging Covenant

(APC) and have developed a series of initiatives to ensure we meet targets

committed to under our APC action plan. In 2012, we received a 3.7 star rating from

the APC indicating that the Group has made solid progress in meeting its targets.

TEAM MEMBERS

The Group now employs around 11,500 team members operating from nearly

600 sites across Australia, New Zealand and China. We are very pleased that team

retention levels continue to improve and now sit at 71.5% - a big step forward from

the 59% achieved in 2006.

We conducted a Group wide engagement survey for the first time in 2011 and

achieved an engagement score of 60%, which compared to the Retail industry

average of 55%. Whilst this is a pleasing result, there is room to improve and areas

such as Recognition, Change Management, Career Opportunities and Line Manager

capability were identified as areas for focus.

The Group’s safety performance has improved through the year benefitting from the

increased focus on safe working practices across the Group’s retail teams introduced

towards the end of last year.

The Group’s five key performance indicators in the area of team members cover

the areas of Attraction, Engagement, Retention, Succession and Safety and good

progress was made in all areas.

“We would like to recognise all members of our team for their commitment and contribution to their part of the Group each and every day”

We are pleased to say the program management team

successfully implemented a number of significant change projects

in 2011/12 to improve the Group’s multi-channel capabilities.

From a customer understanding perspective, we have continued

to develop our customer relationship management system

and leverage its capability to execute a number of marketing

campaigns for BCF Club members during the year. These

campaigns are delivered via direct e-mails to Club members and

allow the Group to generate additional sales without the costs of

catalogue or TV advertising; thereby generating excellent returns

on marketing spend.

In addition, we have enhanced our capability to service customers

that buy products on-line, through our “Click and Collect”

functionality, i.e. order the product on-line and collect it from

the nominated store. We have reduced delivery times for on-line

orders through the establishment of hub fulfilment stores in

the network. This ‘hub store’ capability highlights the potential

to use the Group’s physical store network to enhance the

customer experience across multiple channels. Finally, ongoing

development has continued to ensure our various brand websites

provide an engaging experience when customers are researching

or purchasing products on-line. It is pleasing to note the Group’s

share of on-line traffic is at least equal to that of physical store

traffic, across all our brands.

2011/12 also saw significant change in the Group’s supply chain

operations. The projects were broken into two broad areas –

development of the Group’s distribution centre (“DC”) network,

and improvements to our inventory management systems and

processes. During 2011/12, the Group finalised the plan for our

distribution centre network to accommodate requirements for

the next five to seven years. The first stage of this plan - the

construction of a larger DC in New Zealand to cater for the SCA

and FCO businesses - was completed during the year.

Other significant achievements include the upgrade of our

warehouse management system and various inventory

management initiatives, including the upgrading of Supercheap

Auto’s inventory forecasting system and re-engineering the

Christmas promotion forecasting process for BCF and Ray’s

Outdoors. These activities are designed to grow sales and

reduce out-of-stock while investing less in the way of inventory

purchases. Finally, the BCF team has commenced development of

a new inventory forecasting system which will be piloted within

our Fishing division during the first half of 2012/13.

Lastly, the Group reviewed a number of key contracts and

suppliers as part of the integration of the Rebel Group business

into the broader Group. This contract review resulted in

significant savings that will enhance the Group’s cost profile in

future years, while underpinning the synergy savings that were

flagged at the time of the Rebel Group acquisition.

GROUP DEVELOPMENT12

GROUP DEVELOPMENT

In order to differentiate ourselves from our

competitors and to provide a seamless customer

experience regardless of the channel they use to

engage with us, as a Group we must ensure:

We understand our customers’ needs and wants at a detailed level and we communicate with our customers in a timely and relevant way

Our supply chain has the capability to deliver products to customers in line with their expectations, while ensuring our inventory levels are as efficient as they can be

We work productively as an organisation, to maintain our cost competitiveness and maximise the time we spend in value-adding activities, such as product and range selection and customer interaction

Given the rapid pace of change occurring in the retail industry, we recognised the need to further enhance our capability in the

areas of customer insight and engagement, supply chain effectiveness and productive working arrangements, at the same pace we

have historically rolled out brand-specific growth projects such as new and refurbished stores. To achieve this, the Group established

a dedicated program and project management team in 2011/12. The team, comprising three full-time program managers and a

number of internal and contracted project managers, has two broad objectives:

Delivery of a number of change projects to build the multi-channel capabilities of the Group.

Implementation of a standardised methodology to deliver

change projects throughout the Group. The use of the methodology

is intended to ensure projects are delivered on time and budget,

and realise the expected benefits.21

COMMUNITY 13

CORPORATE RESPONSIBILITY

We have a commitment to: paper usage reduction, power

usage reduction, catalogue paper reduction/recycling, and

customer oil and battery recycling. In addition, we are a proud

signatory to the Australian Packaging Covenant, working towards

reducing the volume of packaging used across the Group.

ENVIRONMENTAL INITIATIVES

We have a commitment to supporting several children’s

charities, responsiveness in times of community crisis,

e.g. natural disasters (fires, floods, earthquakes) and

active participation in improving community wellbeing,

e.g. safe driving, safe boating and sun safe initiatives.

SOCIAL EDUCATION AND PHILANTHROPIC INITIATIVES

We have a commitment to: equal employment opportunities

and to a bullying, harassment and discrimination-free work

environment, open door communication and the gathering of team

member feedback, fair trading practices, team member development

and involvement in negotiations over pay and conditions, product

quality standards, workplace health and safety and ethical sourcing.

ETHICAL WORKING AND EMPLOYMENT PRACTICES

We are committed to achieving

and demonstrating profitable and

sustainable growth in a manner

consistent with our group values

and with our commitment to social

and environmental initiatives for

the benefit of our team, customers

and suppliers and the communities

in which we operate.

With our fourth group value defined as ‘CARE’, we strive to lead by example and invest our time, financial support and resources in a variety of initiatives.

EXAMPLES OF THIS PHILOSOPHY IN PRACTISE INCLUDE:

ENVIRONMENT14

ETHICAL PRODUCT SOURCING

Super Retail Group has continued to develop our

compliance frameworks governing our sourcing

of product from overseas, including our Ethical

Sourcing and Imported Goods Policy for all our trade

partners. This policy addresses environmental and

socioeconomic criteria including labour relations,

packaging and environmental requirements. In

addition, the Group has invested in developing our

own quality assessment team in China to support the

specialist independent auditors periodically engaged

to ensure that requirements are understood and that

compliance is maintained by trade partners.

PACKAGING OPTIMISATION PROJECT

In addition to the above, our packaging team overseas

liaises with suppliers on a regular basis to ensure they

are complying with our packaging specifications. To

this end, last year we reduced a significant amount of

waste through our overseas packaging optimisation

project, which involved reducing air space and

changing packing methods to reduce the amount of

packaging material.

The Group’s existing compliance and quality assurance

programs include use of accredited auditors to inspect

and test to certify that products meet Australian

legal requirements, to ensure that good quality,

safe and innovative new products are provided to

customers and are good value-for-money.

CUSTOMER AUTOMOTIVE BATTERY RECYCLING

In accordance with our Environmental Policy, the

Group continues to explore options to offer our

customers the ability to return directly to our retail

stores selected products which will be collected and

distributed to recycling facilities. Supercheap Auto

now accepts used car batteries in all retail stores.

These are collected and returned to a recycling facility

where the lead and plastic is reused in manufacturing

new products. In addition to this, the Group continues

to explore other recycling opportunities as an added

service and convenience to our customers in support

of the environment.

ENVIRONMENTAL MANAGEMENT SYSTEM (EMS)

As part of the Group’s EMS development, a

Committee has been formed to assist with the EMS

implementation and drive environmental initiatives

including the reduction of waste, packaging and

energy consumption.

AUSTRALIAN PACKAGING COVENANT

The Group is committed to establishing a ‘framework

for the effective life cycle management of consumer

packaging’ through an educational approach

internally with our team, our trade partners and our

customers. Since becoming a signatory in July 2008,

the Group has embraced the principles of product

stewardship to ensure the environmental impact on

new or existing packaging is continuously monitored

and minimised, via a collaborative approach with

our trade partners, and education of our team

members and customers. During the year, the Group

has continued to develop processes that embody

the principles of product stewardship with an aim to

continually improve our environmental impact with

respect to packaging and waste management via:

• Development of internal policies and procedures,

such as the Sustainable Procurement Policy,

to govern product packaging and operations

in accordance with the Sustainable Packaging

Guidelines

• Extension of recycling processes within current

waste management activities to reduce waste

disposal

• Promotion of existing recycling activities to

customers and team members to improve

knowledge and awareness of recycling options;

• Use of recycle logo in our packaging and

catalogues to encourage waste recycling

• Regular articles on waste and environmental

topics in our internal media to increase our team

members’ awareness

• Engaging with our waste provider on a regular

basis to improve our waste management

practices

• Inclusion of Environmental and APC compliance

checks in our internal audits

ENVIRONMENT

POWER USAGE REDUCTION

Super Retail Group continues to explore opportunities to reduce power usage and

monitor company performance. These include:

• Organisational culture initiatives - educating team members on how to reduce power usage

• Structural initiatives – building specifications, e.g. Super Retail Group is currently trialling

heat reflective roof paint and efficient lighting fixtures to assess the benefits

• Energy saving devices and control equipment, e.g. ‘smart’ thermostats, light sensors

• Procedural initiatives – optimising the hours of operation of equipment, e.g. air

conditioning, lighting and illuminated signage through timers and PE Cells

CATALOGUE PAPER REDUCTION/RECYCLING

Through our major printing and distribution partners, Super Retail Group

uses paper which includes up to 70% recycled fibre with the balance

coming from fully sustainable plantation forests. Similarly, our use

of customer targeting software and greater emphasis on email

marketing has enabled us to reduce catalogue distribution

quantities with little or no loss in effectiveness. A great win for

the environment and our business.

ENVIRONMENT 15

CHARITY16

Super Retail Group is a corporate supporter of children’s charities including

Children’s Hospital Foundations Australia, @Heart Inc., CanTeen’s Bandanna

Day and Sids and Kids Red Nose Day. The Group is also involved with the

charity BrAshA-T; developing a range of promotional products sold exclusively

throughout Super Retail Group’s Australian retail stores each year during

the month of March. This promotion assists in raising awareness and much

needed research funds for the disease Ataxia-Telangiectasia (A-T) which is

a rare degenerative disorder that first shows during early childhood. It is

a complicated illness that affects a number of different parts of the body,

particularly the brain and the immune system.

Amart All Sports is committed to partnering with community groups and

charities that promote an actively healthy lifestyle for all the family. We are

pleased to be associated with many of the major sporting bodies around

Australia, including: National Rugby League (NRL), Cricket Australia, Australian

Football League (AFL), Football Federation of Australia and Australian Rugby

Union (ARU).

As part of BCF’s community sponsorship program for the Australian Volunteer

Coast Guard (AVCG), the team has raised over $100,000 through its in-store

“round-up” initiative. This is a significant achievement for the BCF team and

we are proud to assist in raising funds and awareness for the role the Coast

Guard plays in marine safety and protecting the wellbeing of Australians;

many of whom may be valued BCF customers. The funds raised will be

distributed between the flotillas and will assist AVCG in search and rescue,

purchasing vital rescue equipment and public boating education. In addition

to supporting the AVCG and numerous other charities, BCF continues to

hold a strong affinity with the environment by promoting sustainable fishing

practices and a generally environmentally responsible ethos. This is underlined

by our decision in 2010 to remove plastic bags from the business, which has

been well received by customers and is now being emulated by other retailers.

FCO recently announced a partnership with New Zealand’s primary maritime

search and rescue service, Coastguard NZ. The organisation comprises more

than 2,140 dedicated and highly trained volunteers, 92 dedicated search and

rescue vessels and two small fixed wing single engine aircraft. FCO will support

the Coastguard’s fundraising efforts via an in-store ‘round up’ function. This

allows customers to simply ‘round up’ the value of their transactions to the

dollar value they nominate. A number of additional activities are planned

throughout the year such as the ‘Mayday’ appeal, which will assist us in raising

additional funds to make New Zealand’s waterways a safer place for boaties.

COMMUNITY

CHARITY 17

Goldcross Cycles has continued its strong community focus supporting State

Cycling bodies and the National Cycling Promotional Fund via promotional

activity on the Goldcross Cycles website, email, catalogues and in store.

Goldcross Cycles has supported mass participation bike rides such as Brisbane

Bike Week, Ride to Work day, Brissie to the Bay, Victorian Schools Cycle

Championships, BSX and many other smaller events. Certainly one of the

highlights of the year was sponsoring Dave Alley who broke the world record

for fastest time to cycle around Australia. All money raised went to the Royal

Flying Doctors with Goldcross Cycles and Super Retail Group donating $3,000

to this worthy organisation. The Goldcross Cycles team has visited local schools

and businesses to run free cycling clinics and donate products to school

raffles. We continue to run our free Smartrider courses, which are open to the

community and teach safe cycling and basic bike maintenance techniques.

From July 2011 Ray’s Outdoors’ customers have been invited to assist Cancer

Council Australia in its vision to minimise the threat of cancer to all Australians.

The generosity of customers has contributed much-needed funds for cancer

research, prevention and support services by simply ‘rounding up’ the value

of their purchase, or by making a standalone donation at the register. Ray’s

Outdoors is on track to achieve approximately $135,000 in its first year of the

Round Up program.

Rebel Sport is proud to be the inaugural, national Presenting Sponsor for the

iconic Jump Rope for Heart program – one of the longest-running physical

activity programs in Australian schools, which has been running now for

28 years. The Jump Rope for Heart program provides a fun way to educate

children about heart health. Not only do they learn about the need to look

after their own hearts by skipping and being active, but they are also looking

after the hearts of all Australians by helping the Heart Foundation with vital

fundraising support which assists them to continue their lifesaving work.

Following Australia’s highly-successful Supercheap Auto – Driving Home

Road Safety campaign, Supercheap Auto has continued the partnership with

Driversafety.com.au and V8 Supercar champion Russell Ingall to support

CARMA, a landmark national road safety campaign aimed at improving road

users’ awareness, behaviour and attitude to driving on Australian roads.

A series of community service announcements and a dedicated CARMA

website www.yourcarma.com.au feature useful driver tips and avenues to

practical driver training for all Australian drivers. Supercheap Auto has also

embarked on a behavioural and skill-based road safety education campaign

for Queensland schools. The school education initiative is designed to better

equip both young drivers and their parents with well researched proven skills

and techniques to create better drivers on our roads.

SYSTEMS18

We took the first step in delivering this strategy in 2002,

with the installation of SAP as our core Enterprise Resource

Planning (“ERP”) system. SAP is a leading ERP system

and provides the Group with key merchandising, finance,

human resources and customer relationship capabilities;

with reporting from SAP’s Business Warehouse solution.

Our focus is on developing the Group’s multi-channel

capability, improving the effectiveness of our supply

chain and supporting the divisions in the development of

their customer offer. For example, Click & Collect - a key

development in letting our customer purchase products

in the way that they choose - has been implemented in

all on-line and physical stores. To support the near-real-

time stock information required by Click & Collect all stock

management is now provided by SAP.

SAP integrates with a suite of other applications that

extend from systems such as Manhattan Associates’

warehouse management application through to our group

point of sale system. Super Retail Group is maintaining

its strong commitment to SAP as its base platform,

and is extending its capabilities using specific best of

breed products such as JDA’s forecasting software.

Our partnership with SAP’s reseller partner, Extend

Technologies, has existed from the initial implementation

through to current day.

SYSTEMS

Super Retail Group’s IT Systems have been strategically

developed to meet the demands of a major specialty

retailer undergoing significant growth and dynamic change.

• Support our team members in providing

the best possible service to customers

• An organisational platform to deliver

consistent business processes across all

brands to leverage group scale

• Support business processes to maintain

the unique characteristics of each brand;

• Provide appropriate security and resilience

to keep the business operating effectively

and efficiently

• Scalability to support future organic growth;

• Simplify the integration of new businesses

as opportunities occur

• Contribute business value by using IT to

solve existing problems or provide new

opportunities

Our current IT strategy addresses the following critical needs:

DURING 2012/13, WE WILL DEVELOP OUR CAPABILITIES IN THE FOLLOWING AREAS:

• The Sports Retailing division will be moved on to our standard group information services platform to provide improved

functionality to our team members and allow the expansion of our supply chain capabilities

• As part of the customer experience initiative the store infrastructure will be reviewed to better support the use of rich media in

stores by our team members and customers

• We will refresh our data warehouse platform using SAP’s HANA database infrastructure to introduce a real-time analytics capability

OUR CORE SAP ENVIRONMENT IS AUGMENTED BY INDUSTRY-LEADING APPLICATIONS AND PARTNERSHIPS IN OTHER AREAS, INCLUDING:

• Manhattan Associates’ system continues to support our significant growth in warehouse management needs

• Telstra, supported by Telstra Clear, provides all voice and data telecommunications within Australasia

• IBM delivers a robust, scalable and reliable server infrastructure

• Cisco Systems and Dimension Data provide IP networking technologies and services

• LANDesk’s suite of support tools allows a small support team to administer a network of over 3,000 devices

“Information Technology has been, and will continue to be a critical success factor for Super Retail Group by providing a major competitive advantage”

Another year of growth and expansion on all fronts as the International

Operations team continues to explore new products and new ways to

add value to the business. Most recently, we have focused on preparing

to extend our services to the Sports Retailing Division. During the year

we expanded our office space in Hangzhou, in order to accommodate

the future Rebel Sport requirements; meanwhile the demands on our

Shanghai space continue to grow.

The last few years have seen our team grow in depth of experience as

they continue to seek best sources of supply, audit factories, design

packaging and artwork, coordinate production schedules, quality

assurance and order management right through to pre-shipment

inspections and dispatch of goods to Australia and New Zealand.

Changing the division’s name from Overseas Sourcing to International

Operations reflects the breadth, scope and scale of services provided to

facilitate an efficient international source to store supply chain. As the

flip side of the domestic Australia and New Zealand logistics business it is

important we lay the groundwork at origin to support the logistics efforts

at destination.

Our international operations journey involves careful assessment of the

best methods, locations and technologies to deploy over coming years. A

reorganisation during the year increased our operational focus to support

a flexible and adaptable supply chain and logistics fulfilment capability,

offshore consolidation hubs and smarter logistic practices at origin.

GROUP INTERNATIONAL OPERATIONS 19

“Changing the division’s name from Overseas Sourcing to International Operations

reflects the breadth, scope and scale of services provided to facilitate an efficient

international source to store supply chain”

“A reorganisation during the year increased our operational focus to

support a flexible and adaptable supply chain and logistics fulfilment capability.”

An average 63% of cartons reviewed as part of

our packaging optimisation program achieved

improved pallet utilisation of 20.1% and

container utilisation of 7.5%, reflecting the

Group’s commitment to sustainability and a

responsible approach to reducing packaging

waste whilst continually delivering logistic

transport improvements and commercial

benefits.

Scan pack capability developed last year

with our international logistics partners

Cargo Services Far East for apparel has been

extended to handle hard goods store ready

displays to provide greater supply chain

flexibility in servicing our stores’ requirements.

Our group-wide focus has ensured

International Operations are well placed to

realise incremental improvements to the

Rebel Sport business.

Strategic objectives identified by the

Sports Retailing division have been clearly

communicated, resourced and are now a part

of business as usual as our Chinese based

team members are inspired to action.

The year ahead will offer exciting

opportunities to deliver good product

and extract value from our supply chain

infrastructure as we continue to seek the best

products with the best features and value

proposition for our customers.

INTERNATIONAL OPERATIONS

Our team’s focus on product category specialisation leverages cross brand knowledge and skills to tailor products to best suit

respective customer requirements and optimise the Group’s scale.

CONTINUAL IMPROVEMENT

THE PHYSICAL LOGISTICS INFRASTRUCTURE

Commencing in March 2011, a project team was formed to search

and recommend key future requirements for Super Retail Group’s

supply chain. This project, entitled “Design Year 2015” is a major

initiative in designing a supply chain capability to support a

$2.5Billion+ retail multi-channel supply chain. During this period,

we have also commissioned and built a new distribution centre in

New Zealand to support a 10 year capacity horizon.

The acquisition of the Rebel Sport and Amart All Sports businesses

provides an opportunity for improving the Group’s overall supply

chain efficiency, both in domestic transport and overseas sourcing

logistics. This opportunity is encapsulated within the Design Year

2015 project and is now underway.

The focus on optimising inventory continues with ongoing

reductions in deleted lines while adding many thousands of new

lines to the customer offer, both in store and on-line.

SAFETY

The number one priority in all operational areas continues to be

safety for all team members, customers and stakeholders across

and interfacing with our brands. We continue to trend positive in

the reduction of Lost Time Injuries within all distribution centres,

while the overall volumes and transactions within the supply chain

increase. Our Performance and Compliance team works hand

in hand with our operations managers to standardise processes

and policies across all major distribution centres and transport

operations with regular audits and performance measures.

TEAM MEMBERS

The five distribution centres in the network continue to handle

more volume; resulting in the growth of full time jobs with

associated training and third party service support. We have in

place one Enterprise Agreement for every team member in the

business, including distribution centre personnel. This works well

for everyone: one set of policies and guidelines for all that are

clearly communicated and managed with full transparency.

The investment in training - both new and refresher - is an integral

part of the support agenda for our teams.

THIRD PARTY SERVICES AND SYSTEMS SUPPORT

Our respected third party Logistics Support teams within Australia,

Asia and New Zealand continue to grow with the business and

are clearly focussed on simple and effective service level KPIs

targeting all of our customers. We have upgraded our Manhattan

Warehouse Management System through 2011/12 with a very

successful launch that was highly commended by the system

provider, Manhattan U.S.A, as one of the best managed upgrades

globally. This critical and timely systems upgrade provides the base

capacity and capability for many aspects of Design Year 2015.

THE FUTURE

The supply chain and customer engagement agenda active across

all brands will see continued investment in Super Retail Group’s

capability to ensure further enhancements and efficiencies in

supply chain continue to enhance our customers’ experience

across our multi-channel business.

LOGISTICS20

LOGISTICS

Super Retail Commercial (SRC) is the recently established commercial arm of Super Retail Group. The business was launched in 2012

to leverage off the Group’s sourcing and supply chain capabilities, and to focus on building long term commercial relationships with a

range of businesses throughout Australia, New Zealand and Asia Pacific.

Super Retail Commercial customers represent a variety of business sectors including:

SUPER RETAIL COMMERCIAL 21

SUPER RETAIL COMMERCIAL

SRC is the single point of contact for

business customers across all of our seven

brands and provides the capacity for the

Group to fully engage with the commercial

market, by offering business customers

a personalised and flexible service that

meets individual business requirements.

The development of SRC enables us to

provide customers with any product

from any brand, from any one of our

distribution centres, or deliver directly

from overseas sources. Super Retail

Commercial specialises in establishing

trading arrangements with corporate

clients that wish to purchase products

across a variety of specialised categories

and across multiple retail brands.

SOURCESRC uses the platform built by our

International Operations division and

enables us to provide the full range

of private label merchandise offered

by our retail brands to business

customers. This allows SRC to develop

individual and customised product

ranges to suit particular business

needs across a broad spectrum of

industry sectors. These products

deliver great value and can be offered

at competitive commercial rates,

allowing SRC to connect into wholesale

and retail markets within domestic

and overseas markets. SRC also offers

customers the well-known third party

brands ranged in our retail stores.

SATISFYSRC is focused on delivering

exceptional customer service. We

work closely with our customers

to develop a clear understanding

of their requirements, and

deliver friendly and informative

customer support which meets

the standards they rightfully

demand. Having recently

launched our on-line presence,

existing customers can now

browse and select products

directly from the entire SRG

range, while potential customers

can explore our full range at their

leisure and send enquiries to the

SRC team via a single mouse-click.

SUPPLYSRC leverages off the

Group’s overall supply chain

capabilities in order to

provide effective fulfillment

solutions for our customers.

SRC holds inventory and

supplies orders from all of the

Group’s distribution centres.

During 2012 we have built

our systems capabilities to

allow fulfillment of customer

orders across all product

categories and the ability to

dispatch from multiple DCs;

resulting in flexible delivery

options that suit customers’

unique requirements.

• Government and Defence

• Sporting Clubs and Schools

• Insurance and Finance

• Resources and Manufacturing

• Commercial Tenders

• Incentive and Reward specialists

• Promotional Product and Event

specialists

• Community Associations and NFPs

• Export Markets

• Wholesalers and Retailers

SUPER RETAIL COMMERCIAL OBJECTIVES:

Supergifts is a web-based business that allows commercial customers to place orders for gift

cards from all our retail brands. A recent upgrade of the Supergifts website allows us to extend

the previous offer to include Rebel Sport and Amart All Sports gift cards. Supergifts is a great

option for companies wishing to offer gift cards as part of their employee reward, retention and

incentive programs via an easy online order process, with fulfillment managed by the SRC team.

CUSTOMER SEGMENTS

To build long term partnerships with a range of businesses

To develop Group sales outside of the retail sector both within Australia,

New Zealand and overseas

MULTI-CHANNEL CAPABILITY

Our full range is now available for sale on-line in both

Australia and New Zealand, which we see as a key

growth platform for the future. We have also recently

launched a “Click & Collect” (order on-line and pick

up from your local store) service and strongly believe

we must continue to improve and develop our multi-

channel capability, allowing our customers to shop

their way.

BRANDS AND NEW PRODUCTS

Driving quality known and private brands is a very

important element in growing our business and

building integrity and trust with our customers. We

continue to launch thousands of new and innovative

products each year faster than our competitors and

we firmly believe that new products are the lifeblood

of any good retail business

STORE EXPERIENCE

We have always strived to create an in-store

environment which is interesting, exciting and value-

focused. The next important stage on this journey

is to make our stores - both bricks and mortar and

on-line - a more engaging experience. We are very

focused on improving and delivering in the area of

customer engagement and will focus our energies in

three key areas: team engagement, in-store / on-line

engagement through design, theatre and product

display, and finally on engaging through the use of

suitable technologies. This will be a very exciting

journey indeed.

FITMENT PROGRAM

The fitment program was launched in 2007, driven

by customer demand for basic items to be fitted for

them at the time of purchase. The fitment program

continues to be strongly supported by our customers

with over 170,000 fitments last year alone. Our

friendly team loves to go above and beyond and this

service is another great way for our team members to

engage, surprise and delight our valued customers.

FURTHER EXCITING INITIATIVES

The automotive workshop trade business is a very

large sector of the industry, which demands a

high level of service, accuracy and knowledge. We

believe now is the right time to enter this sector of

the automotive market and we will do this with a

new Super Retail Group brand focused totally on

the trade market. Auto Trade Direct will trade as a

standalone business, with a dedicated, passionate and

knowledgeable team based in New Zealand.

AUTO RETAILING - SUPERCHEAP AUTO22

AUTO RETAILING

We recently launched an exciting new loyalty club called ‘Club Plus’ in

New Zealand, which will deliver many benefits to our valued members.

The core benefit is the “Best Price Reward” and early membership and

usage of the Club card has been very encouraging. For more details,

please visit www.supercheapauto.co.nz

Supercheap Auto is a thriving specialty retail

business, with over 280 stores across Australia

and New Zealand, specialising in automotive parts

and accessories. We also stock a wide range of

tools and accessories for the DIY home handyman

as well as products for travel, touring, outdoors,

garage and the shed.

There are many and varied activities that continue

to drive and grow the Supercheap Auto business;

below are some of the key strategies along with a

preview of some new and exciting initiatives.

AUTO RETAILING - SUPERCHEAP AUTO 23

“We continue to launch thousands of new and innovative

products each year”

LEISURE RETAILING - BCF

LEISURE RETAILING - BCF24

BCF - Boating, Camping, Fishing continues to be largest

outdoor retailer in the country, with over 90 stores located

across every state of mainland Australia. This financial

year has seen 13 new stores open, extending BCF’s

coverage of the market and making it easier than ever for

our customers to shop for their outdoor equipment needs.

AUSTRALIAN VOLUNTEER COAST GUARD PARTNERSHIP

Dedicated to helping make Australia’s coastline safer, BCF

entered a community partnership with the Australian Volunteer

Coast Guard (AVCG) and has raised over $100,000 as a result of

our ‘round-up’ fundraising initiative. A cheque was presented

to the Coast Guard in February 2012 and we are forecasting a

further $200,000 to deliver to AVCG at the end of the financial

year. BCF is proud to be involved in raising money for a non-

profit, non government funded organisation that does such great

work keeping boaties and fishos safe on the water.

SOCIAL MEDIA

The BCF Facebook page has really started to hit its straps, with

over 13,000 fans and our level of engagement continues to grow.

Facebook is a great community of like-minded BCF fans where

they can share experiences and stories, and take advantage of

the inside-word direct from the brand.

CLUB BCF

Our Club BCF team has been busy this year with 76 club nights

Australia-wide. We have introduced exclusive email offers –

enabled by our new Customer Relationship Management system

– which delivers special offers only available to club members.

Our ‘Swipe to Win’ competition kicked off in January 2011

and since that time one lucky winner at every BCF store every

month has scored a $50 BCF giftcard. With $50,000 worth of

prizes distributed so far, the initiative has encouraged increased

participation by members in our Club BCF activities. This year

our club members have enjoyed access to more exclusive

competitions than ever before – including the chance to win a

decked-out kayak, fishing trip with Scotty Hillier from Channel

Seven’s Creek to Coast and a ‘money can’t buy’ trip of a lifetime

to The Kimberley with the All 4 Adventure boys, Jase and Simon.

KAYAK REFRESH PROGRAM

The kayak refresh program that was completed in mid 2011

has been successful in boosting sales and making BCF a

destination for all things kayak and kayak accessories. Since the

refresh, kayaks have grown 50% in like-for-like sales and kayak

accessories have grown 45% as a result of the project.

BCF TV

Our online TV channel is going from strength to strength with

some major activities planned for the next 12 months. Club BCF

members will have the opportunity for greater involvement in

the content, serving as presenters rather than simply viewers of

the channel. We will also see the premiere of the first full series

to air on BCF TV, with the nine episode Camping 101 and eight

episode Deck Out Your Tinny series. So stay tuned for a big year

of BCF TV!

INVENTORY OPTIMISATION

The last 12 months have seen the BCF business reduce inventory

by 6% on the previous 12 months on a per-store basis, which is

also a 23% reduction over the last four years on a per-store basis.

This has been driven by three main factors. Firstly, every new

BCF and Ray’s Outdoors store we have opened in the last

12 months has been partly stocked with excess inventory from

existing stores by approximately 30% of the total opening

inventory value. Secondly, a greater focus was placed on

improving our merchandise planning, through more disciplined

purchase order management, improved sales and operations

planning and utilising demand planning tools to optimise our

inventory for the Christmas seasonal stock build in 2011. Lastly,

improved processes have been established, primarily centred

on bedding down detailed process flows and procedures for the

category stock control team.

LEISURE RETAILING - BCF 25

“This financial year has seen 13 new stores open, extending BCF’s

coverage of the market”

RE-INTRODUCTION OF NATIONAL BRANDS FOR APPAREL

We identified a need to introduce more nationally-recognised

brands into our range of adventure travel products, to assist in

legitimising our own branded products. Popular brands such as

Columbia, The North Face, Merrell and Vigilante have allowed

us to fully portray the value proposition of our private label

garments and demonstrate the quality customers can purchase

at reduced prices. Feedback received from stores and customers

regarding the desire for more key brands informed the decision

to extend our range.

R.M.Willams was a brand the Ray’s Outdoors business previously

stocked for many years and we have now re-introduced

this iconic label into the business to capture our grass roots

customer. Again, this brand was very well supported by our retail

team and the feedback from the stores has been fantastic.

PRIVATE BRAND PACKAGING REVAMP

The past year saw Ray’s Outdoors revamp and refresh our

private brand packaging across all categories to reiterate the

quality of our private brand offerings to the customer. The

new packaging showcases our products more effectively, looks

great on the shelves and offers valuable information to guide

customers’ purchasing decisions.

CATALOGUE REFRESH/ NEW TVCS

To support our revised brand image and brand strategy, the

Ray’s Outdoors catalogue was refreshed and updated to suit the

new vision and direction. The refreshed catalogue incorporated

a cleaner typeface, a user-friendly layout and imagery that

better matched the new brand. New television commercials

were also filmed to consolidate the brand strategy. Including

both 15 second and 30 second executions, the new TVC imagery

and audio were modernised to support the brand’s evolution.

CANCER COUNCIL

From July 2011 Ray’s Outdoors’ customers were invited to assist

the Cancer Council Australia in its vision to minimise the threat

of cancer to all Australians. Ray’s Outdoors customers have

contributed much-needed funds for cancer research, prevention

and support services by simply ‘rounding up’ the value of their

purchase, or by making a standalone donation at the register.

Ray’s Outdoors is on track to achieve approximately $135,000 in

its first year of the Round Up program.

PHASE OUT OF PLASTIC BAGS

As part of the Group’s commitment to the environment, plastic

bags were completely phased out of Ray’s Outdoors stores on 30

September 2011. All stores throughout the network now offer

customers an enviro bag as an alternative.

LEISURE RETAILING - RAY’S OUTDOORS26

LEISURE RETAILING RAY’S OUTDOORS

Ray’s Outdoors has enjoyed a busy

year, opening seven new stores around

Australia, including our first Tasmanian

stores in Moonah and Launceston. This

year has seen a focus on national brands

across all categories, while also refining

and refreshing our private brand offer.

CALLINAN UPDATE – RANGE IMPROVEMENT AND MARKETING

The partnership with Pat Callinan’s television program saw Ray’s Outdoors

extend our offer of 4WD, camping gear, tents, communications, power and

lighting merchandise in store. Season 4 of Pat Callinan’s 4x4 Adventures

aired on Network Ten and ONE-HD and comprised eight x one hour episodes.

Ray’s Outdoors branding featured throughout the series via top-and-tail

billboards and integrated product stories. Content from the current and

previous seasons of Pat Callinan’s 4x4 Adventures has also been utilised in

our digital and traditional media. This integration of content has supported

the initiative very well and the partnership has been successful in positioning

Ray’s Outdoors as a genuine destination for all things camping and touring.

LEISURE RETAILING - RAY’S OUTDOORS 27

“As part of the Group’s commitment to the environment, plastic bags

were completely phased out of Ray’s Outdoors stores on 30 September 2011”

LEISURE RETAILING - FCO28

LEISURE RETAILING - FCO

OUR RANGE

FCO is positioned as a true one-stop-shop for all

things fishing, camping and outdoors, with the range

boasting:

• Over 60 different sleeping bags

• Over 60 different back packs

• Over 25 different tents

• Over 2000 lures

• Over 300 reels

• Over 700 rods and combos

• Over 25 different kayaks

• Over a dozen barbeques

• All the major apparel brands under one roof:

The North Face, Columbia, Merrell, Hi-Tec, Keen

and Bear Grylls.

OPENING CELEBRATIONS

Our new store openings have embraced and

incorporated the Kiwi culture, featuring store

blessings by local Maori elders. Our multiple-store

grand launches in November last year were a real

celebration with live radio outside broadcasts,

free BBQ cook-up, prizes and special giveaways for

customers.

CLUB FCO

Our loyalty program has started off strongly with over

24,000 New Zealanders signing-up to be part of Club

FCO. Over 1300 people have attended the 11 club

events hosted in-store to date and we look forward

to another 17 club nights before the end of the 2012

calendar year. So far we have focused on fishing

presentations from expert guests, providing practical

tips and showcasing new merchandise. These events

give our members access to special presentations and

exclusive offers which provide an excellent incentive

for customers to get on board and join Club FCO.

One in three people who have signed up to Club

FCO have opted in to receive marketing material,

such as club news and special offers. More

impressively however, is that they are keenly reading

and responding to these calls to action. Club FCO

electronic direct mails (eDMs) enjoy impressive open

and click-through rates of more than 55 per cent,

which is double the industry standard.

TV FCO

TV FCO, an interactive on-line channel has launched

strongly, with over 40 informative “how-to” videos

to assist customers on a range of topics. The channel

features a range of clips, including how to tie knots,

fillet fish, plot waypoints on sounders and even layer

clothing to make the most of the great outdoors.

The video clips feature FCO team members and

industry experts and now have more than 29,000

views to date.

APPAREL

The FCO apparel range boasts industry-leading brands

such as The North Face, Columbia and Merrell. The

New Zealand customer is very technical savvy with

products, given their climate, and offering these key

brands has given our range creditability. FCO will be

introducing other leading brands such as Marmot and

Mountain Hardwear in the next few seasons which will

add even greater substance to the range, and assist in

legitimising our private label product for customers.

Key strategies around commodity products will

drive foot traffic and increase sales in key areas and

substantiate our hero statements in store.

FCO exploded onto the North Island of

New Zealand last year with nine stores

launching simultaneously on Saturday

19 November 2011. Since then, the

network has expanded to 13 locations

across the North Island and a new

shared distribution centre and support

office facility has opened in Mangere,

housing our New Zealand based team.

LEISURE RETAILING - FCO 29

“Our new store openings have embraced and incorporated the Kiwi culture, featuring

store blessings by local Maori elders”

SPORTS RETAILING30

SPORTS RETAILING

Rebel Sport continues to be the largest sporting goods retailer

in Australia. It is first-to-market with new innovative product

and technology in the sporting category and offers customers

the best of the best in terms of brands, in-store experience and

service.

Rebel Sport is a place to go and hang out just to see what’s new

and what’s happening in sport at the moment. TV screens are

constantly streaming live or archived sporting matches that

are relevant (i.e. tennis during the Australian Open) and you

can see the pride and passion our stores have for sport by the

event-driven displays at the front of the store.

The visual merchandising in women’s apparel equals, if not

surpasses, that of specialty boutique women’s sporting apparel

retailers. In all categories the in-store point of sale materials are

informative, clear and concise and merchandising standards are

consistent and logical.

Whilst Amart All Sports has the latest product and all of the

best brands, its range assortment and customer engagement is

geared more towards the price-savvy shopper. Amart All Sports

stores nationally have Goldcross Cycles store-in-store concepts

which offer mid-range bikes, an extensive parts and accessories

range and workshops offering servicing and maintenance.

Shopping at Amart All Sports is a fun experience - the stores are

clean and well-presented and customers feel “at home” there

because it’s not too fancy. The team is super-friendly and the

school and club program really drives an extra level of customer

engagement. And you can tell they’ve worked really hard to

deliver red-hot pricing to customers because some of the

signage in store is even hand written!

Customers of both brands are engaged through a seamless

experience across all channels: in-store, on-line, social media,

through partnerships with sporting bodies and a comprehensive

loyalty program that drives optimum engagement because

the communication is tailored to each specific customer.

Communication is relevant and is also triggered by customer

behaviour, something that is possible due to a sophisticated

in-house analytics team.

We have efficient systems that allow us to better predict

what stock needs to go to what store and in what quantity.

This combined with store-based feedback means we not only

maximise sales based on what has happened in the past,

we maximise future opportunities through store input and

subsequent passion.

Across both brands all our team members are passionate

about sport and because we have great training systems,

development programs and inspiring remuneration schemes

that drive results, our employee retention rates are industry

best.

Trade partners love working with the Sports Retailing division

because we are easy to deal with and really value the

partnership - not just the transactional relationship - we have

with them.

THE FUTURE VISION OF SPORTS RETAIL…WHERE WE WANT TO BE BY 2017

Rebel Sport and Amart All Sports were acquired by Super

Retail Group on 1 November 2011. Rebel Sport has 91 stores

nationally, predominantly located in shopping centres; while

the Amart All Sports network includes 35 stores, mainly in

homemaker destination centres across Queensland. Prior to

acquisition, the customer offer for both brands overlapped

quite substantially, resulting in no real distinction in the

product ranges, marketing message or promotional offers.

SINCE ACQUISITION, THE PRIMARY FOCUS OF THE SPORTS RETAILING DIVISION HAS BEEN TO:

1. Confirm there is an opportunity for two sports

retail brands nationally.

2. Determine the core customer for each brand and how and where they prefer to shop.

3. Confirm the growth strategy for the Sports Retailing division moving forward.

We have now completed that work and restructured the business to deliver a Sports Retailing strategy which includes an extensive

store refurbishment program, store expansion (especially for the Amart brand nationally), and the integration of Goldcross Cycles

into the Sports Retailing division from 1 July 2012. Goldcross presents an opportunity for both brands, with store-in-store concepts

to be incorporated into the Amart All Sports business. Since acquisition there has been an increasing level of positivity both

internally and amongst our trade partners and we look forward to creating the best sports retail brands in the world.

GOLDCROSS CYCLES – THE YEAR THAT WAS…

The past 12 months have been both challenging and rewarding

for the Goldcross Cycles business and its team members. The

challenges have been very much linked to the weak retail

sector and overall economy, which have challenged retailers

selling higher value products in discretionary sectors, and bikes

certainly fall into this category. There have been numerous

bicycle stores come and go throughout the year, but we are

proud and pleased with our performance and progress during

the past year.

STORE STANDARDS AND CUSTOMER SERVICE FOCUS

There has been a strong focus by the operational team to

improve the standards of our stores and to ensure we have a

consistently high standard in the area of visual merchandising

and overall appearance. An upgraded internal signage package

has also been rolled out, which focuses on lifestyle signage,

directional and information signage, which has enhanced

the look and feel of our stores. This combined with a specific

customer service and product knowledge training package for

all store team members, which we titled internally “winning

the customer service race”, has helped the Goldcross business

improve the sales and profit trend over the past year.

WORKSHOP SERVICES

We strongly believe that a quality workshop service is at the

heart of any great bike store, and to this end we continue

to invest in workshop training to ensure we deliver the very

best services for our customer base. With a challenging

economy, consumers are looking more towards maintaining

their bike, rather than looking to buy a new one. We’ve had an

outstanding year in our workshop business, with double digit

growth on double digit growth the previous year. We believe

the coming year will be another strong one for our workshops

and if we maintain a high level of workshop service, when our

customers do decide to buy a new bike, we will hopefully be top

of mind.

PRODUCT OFFER

We have focused on improving our product offer over the past

12 months and have made some strong improvements in both

range, quality and overall value. The key drivers have been in

the area of private brand development, with the Flight Bike and

GX parts and accessories ranges being the highlight. Our private

brand range now represents over 20% of our overall revenue

at a better average margin return than the overall business. We

have also worked very closely with our key bike trade partners

to develop selected “Exclusive” models at great value for money

price points.

INVENTORY MANAGEMENT

This year has been a break-through year when it comes to

inventory management. We have seen our overall inventory

value reduce by over 25% and at the same time we have been

able to clear our older bike models, putting the business in a

good position for the year, which also assisted in significantly

improving the retail gross margins. The level of out of stocks

has also improved, now running between 2% and 3% of total

inventory.

SPORTS RETAILING 31

The GX club, which now has over 30,000 members, continues to be a success and allows

us to communicate with our dedicated customer base on a more consistent basis,

building loyalty and a higher level of customer engagement. We will build further on the

GX Club in the next 12 months, with more personalised, exclusive offers and club events.

OUR TEAM32

The culture and people within Super Retail Group make this a fantastic business to be a part of. We foster growth

and development from within and allow the opinions and ideas of team members to be heard and considered. We

are passionate about our team members, who are the foundation for our success. We create an environment where

people can live and breathe their passions inside and outside of work. Most of all, our team members take pride in

helping our customers make the most of their leisure time.

OUR TEAM

OPENNESS

THIS MEANS WE:

We are committed to open and effective communication and respect others’ opinions.

Share informationConfirm understandingHave our sayListen openly

PASSION

THIS MEANS WE:

We create an environment in which we share a passion for our business and our contribution and successes are recognised.

Are committedShow enthusiasmRecognise others’ contributionCelebrate success

INTEGRITY

THIS MEANS WE:

We only say things that we know are true and we only commit to things that we can do.

Are truthfulMaintain confidentialityDeliver on our commitmentsAccept responsibility

CAREWe value each member of our team and have a commitment to ensuring our business is safe for everyone.

THIS MEANS WE:Work safelyAre considerateEncourage each otherConsider the impacts of our actions

DISCIPLINE

THIS MEANS WE:

We commit to the plan, resource effectively and follow the agreed processes and standards

Explain expectationsCollaborate as a teamTake pride in all that we doMonitor progress and take action

Super Retail Group has a commitment to its team-based culture in which

each individual team member is encouraged to contribute to the success

of the company and to pursue their own personal development plan. Our

culture is underpinned by a set of five values:

OUR VALUES

TEAM MEMBERS 33

TEAM MEMBER EMPLOYMENT STATUS

TEAM MEMBER RETENTION 2007 - 2012

TEAM MEMBERS YEAR ON YEAR

CASUAL 54%

PERMANENT FULL TIME 31%

PERMANENT PART TIME 14%

TEMPORARY FULL TIME 1%

TEMPORARY PART TIME 0%

5616

6041

113872012

2011

2010

2009

2008

2007

2006

0 2000 4000 6000 8000 10000 12000

5557

4291

4469

4990

80

70

60

50

40

30

20

10

0

2007

53.9

6%

2008

54.9

0%

2009

68.4

4%

2010

65.3

9%

2011

70.7

7%

2012

71.8

5%

49

.12%

3

4.84

%

3

6.43

%

11.33

%

40.

96%

46.

84%

54.

96%

37.8

3%

50.8

8%

65.1

6%

63.5

7%

88.6

7%

59.0

4%

56.1

6%

45.0

4%

62.1

7%

FEM

ALE

MAL

E

TEAM MEMBERS34

TEAM MEMBERS BY BRAND

GENDER BY BUSINESS UNIT

ATTRACTION AND RETENTION

In a period of growth, we are committed

to attracting and retaining the best

people. We are committed to providing

the best start for our team and assisting

them to be the best they can be.

We are passionate about providing tools

to our team to assist them in their day

to day role. We continue to review our

approach to ensure we are providing

a range of mechanisms to support the

recognition, reward, attraction and

retention of our team.

Our annualised retention rate for the

Group in 2012 increased to 71.85% with

this figure including both permanent

and casual team member turnover. We

are continuing to build on our retention

rate and are proud that this continues

to increase year on year. We benchmark

ourselves against the industry to ensure

we continue to deliver a rewarding

experience to our team.

Our commitment to attracting the best

candidates has led to innovation in our

recruitment processes, allowing us to

identify the person that best suits our

culture and our business.

SAFETY, HEALTH AND WELLBEING

We are committed to providing a

healthy and safe workplace for our

team members and customers. We

make every reasonable effort to provide

a working environment that minimises

the risk of incidents and/or damage to

property.

We provide a range of health and

wellbeing activities and initiatives

designed to educate and assist team

members to live a safe and healthy life.

Our ‘Get Active’ framework focuses on

bringing information, promotions and

offers, tools and tips to support team

members in achieving a healthy and

active lifestyle.

AMART ALL SPORTS 8%

BCF 14%

FCO 1%

GOLDCROSS CYCLES 2%

GROUP SERVICES 5%

RAY’S OUTDOORS 6%

REBEL SPORT 33%

SUPERCHEAP AUTO 30%

TEAM MEMBERDEVELOPMENT

team member development

TEAM MEMBER DEVELOPMENT 35

COMMUNICATION AND ENGAGEMENT

Our people shape our business.

We care about our team

members’ opinions and what

they have to say. As a business

we are committed to providing

a great place to work for every

member of our team.

Most recently, the Group

introduced a new engagement

survey and we are proud of our

first year results which see us

exceeding the Australia/New

Zealand retail average by 5%. The

feedback provided by our team

helps us make a real difference

for our people, culture,

communications, leadership

behaviour and training. As a

business we aim to continue to

develop our team member value

proposition and are aiming to be

recognised as one of Australasia’s

best employers.

LEARNING AND ORGANISATIONAL DEVELOPMENT

We are committed to growing

our team members and focus on

both succession planning and

personal growth. We encourage

our team members to make the

most of learning opportunities

available to them including

retail training, management

training, leadership development

programs, post graduate and

personal development programs.

Since the Rebel Group acquisition

we now also run an internal

Registered Training Organisation

which allows our team members

to achieve qualifications for the

programs we offer. We truly

value investing in and developing

our people and offer an extensive

range of internal and external

opportunities. Our team

members are also responsible

for defining their own pathways

to success; working with their

manager to identify how well

they are performing, how they

can improve, and what skills they

need to achieve that success.

“We are committed to growing our team members

and focus on both succession planning and personal growth”

APPENDIX36

APPENDIX

2011 - 2012FINANCIALSUMMARY

PERFORMANCE TRENDS

PERFORMANCE TRENDS 37

EBIT ($m)*

*excludes goodwill impairment charge in 2010

0

30

60

90

120

150

38.1 45

.7 55.1 65

.8 87.5

140.

7

JUN07

JUN12

JUN11

JUN10

JUN09

JUN08

POST TAX ROC (%)

0

5

10

15

2013

.9

14.1 15

.6 16.8 17.5 18

.8JUN07

JUN12

JUN11

JUN10

JUN09

JUN08

NET DEBT ($m)

0

50

100

150

200

250

300

350

93.5

117.

8

114.

7

78.8

73.5

341.

0

JUN07

JUN12

JUN11

JUN10

JUN09

JUN08

DIVIDEND (¢)

0

5

10

15

20

25

30

35

10.5 13

.0 18.0 21

.5

29.0 32

.0

JUN07

JUN12

JUN11

JUN10

JUN09

JUN08

SALES ($m)

0

500

1000

1500

2000

624.

8

715.

4

828.

8

938.

0

1092

.3

1654

.1

JUN07

JUN12

JUN11

JUN10

JUN09

JUN08

EPS (¢)*

*historical EPS adjusted to take into account the bonus element in the 2011 entitlement offer

0

10

20

30

40

50

19.5 22

.6 28.1 32

.1 40.6 46

.1

JUN07

JUN12

JUN11

JUN10

JUN09

JUN08

FINANCIAL STATEMENTS

FINANCIAL STATEMENTS38

BALANCE SHEETCurrent assets

Non-current assets

Total assets

Current Liabilities

Non-current liabilities

Total liabilities

Net assets

Total assets

Contributed equity

Reserves

Retained profits

Capital and reserves attributable to equity holders of Super Retail Group Limited

492,294

893,213

1,385,507

226,927

469,717

696,644

688,863

541,835

(706)

147,734

688,863

340,731

231,317

572,048

145,704

122,664

268,368

303,680

194,541

(3,239)

112,378

303,680

20112012$’000 $’000

CASH FLOW STATEMENTNet cash (outflow) inflow from operating activities

Net cash (outflow) inflow from investing activities

Net cash inflow (outflow) from financing activities

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents at end of year

135,247

(681,913)

567,953

21,287

47,043

70,902

(36,518)

(38,801)

(4,417)

25,697

20112012$’000 $’000

INCOME STATEMENTTotal revenue from continuing operations

Cost of sales of goods

Operating Expenses

Profit before income tax

Profit attributable to Members of Super Retail Group Limited

1,656,390

(927,679)

(608,606)

120,105

83,521

1,094,757

(598,067)

(419,038)

77,652

55,599

20112012$’000 $’000

www.superretailgroup.com.au