Endeavour Group has initiated a cost reduction program targeting $100 million in savings, as it works to mitigate the impact of the conflict in the Middle East.

The group expects the program to deliver $100 million of cost savings in FY27. This comprises savings from store cost optimisation, labour efficiencies, centralised administration, procurement savings and support office headcount reduction.

According to management, simplifying the business is paramount and will deliver significant cost reduction benefits across the organisation.

“We are implementing a more efficient operating model to deliver better returns for our shareholders and look forward to discussing this more fully at our upcoming Investor Day,” said Endeavour Group CEO Jayne Hrdlicka.

The group said it is experiencing pricing pressure throughout its supply chain due to increased fuel costs linked to the Middle East conflict. As a result, approximately $6 million to $8 million of additional fuel and freight related costs will be incurred this year, which will primarily affect the retail segment’s gross margin.

In response, the group is working with its suppliers to manage these pressures, mitigate structural cost inflation, and minimise the impact on customers.

For the third quarter of FY26, retail sales at Dan Murphyʼs and BWS stores grew 2.9 per cent. The Easter holiday trading period saw better results than last year, but outside key events, consumer demand remains subdued, the group said.

Hrdlicka said the retail business maintained positive growth despite challenging macroeconomic conditions and geopolitical uncertainty.

“Our continued market share gains in retail underscore our compelling value proposition in both Dan Murphyʼs and BWS, which continue to resonate with customers,” she said.

• Further reading: Endeavour Group sees retail profits hurt by low-cost push.