West Australian Fresh Food market SpudShed increased its profit by 76 per cent to nearly AU$4 million over the past year, despite pressure on margins fuelled partly by rising competition from international players.
Its owner, Tony Galati, who is also a potato farmer, gained widespread attention with his protest against what he considered to be unfair and excessive control by the Potato Marketing Corporation of West Australia of the quantity, varieties and price of potatoes grown and sold in Western Australia.
In 2015 the PMC launched legal action against Tony Galati, alleging that he had planted more than his allocated quota of potatoes. In 2017 this lawsuit was dropped after the PMC became defunct in December 2016
Spudshed entity Vegie Bandits’ AU$3.96 million net profit for fiscal 2018, up from AU$2.25 million a year earlier, still reflected tight margins in a business which turned over AU$285.5 million, up 10.5 per cent, according to financial statements lodged with the corporate watchdog.
“Because of competition from internationals like Aldi, we’ve had to get far more efficient in absolutely everything we do.”
“Luckily, we have plenty of good staff around us, which has helped us achieve that result.”
The opening of a ninth store, in Bentley in December, also helped achieve economies of scale, Mr Galati said.
Spudshed’s results were released as the discount retailer this week opened its 10th store at Midland.
To mark the occasion Mr Galati and his staff are handing out free 1kg bags of potatoes until the end of the weekend, while stocks last.
He was expecting to give away about 25 tonnes over the period.
Mr Galati said an 11th Spudshed store would open in Butler in February or March, after receiving council approval. The new superstore, like Midland, will be open 24 hours a day.
He said longer-term plans still included opening stores at Geraldton, Kalgoorlie and Albany, though this was still several years away.
A separate business, Galati Nominees, which is responsible for farming and property development, made a profit of AU$2.7 million, down 35 per cent from $4.05 million in 2017.
Farming revenues were down by more than 4 per cent compared with the previous year, as prices of major crops had fallen.
Among them, potato prices were down across the industry because of a massive supply after an incursion by a bug called the tomato potato psyllid caused Australian's Eastern States to close their markets at short notice.
Revenue from property sales were up on the previous year.