One of Australia’s biggest alcohol sellers is trying to ring-fence its business and cushion customers as the Middle East conflict threatens supply chains and pushes up fuel and freight costs.

Endeavour Group, which owns more than 1500 Dan Murphy’s and BWS outlets, has also hinted at job cuts going into its new financial year as part of a $100 million cost-savings drive.

Endeavour is acting after relatively flat sales of $2.4 billion in the third quarter of fiscal 2026.

While sales were supported by strong trading over Easter, consumer demand remains subdued.

The group’s outlook is in line with its major competitor Coles, which last week said sales at its Liquorland business fell 3.9 per cent to $781 million in its first half.

The supermarket group’s boss Leah Weckert said consumers were counting their pennies as confidence nosedived after the war began on February 28.

“Liquor is just a more discretionary category than something like food,” she said last week.

“People will make decisions to cut back in that space to make way for the increased lines in their budget that they might see on things like mortgages or energy or groceries.”

Endeavour, which also owns hundreds of pubs, said sales at the venues began to soften in March across food and bar sales, gaming activity and accommodation bookings.

This was despite an overall sales lift in its hotels division of 3.7 per cent to $531 million in the three months ended April 26.

Endeavour will add $400 million more to its inventory to create a buffer against potential supply chain issues due to the war. It is also closely watching price pressures in its supply chain due to higher fuel costs.

“Endeavour is working with its suppliers to manage these pressures to mitigate structural cost inflation and to minimise the impact on customers,” it said in a statement.

The company warned it faced additional fuel and freight-related costs for the remainder of its financial year of $6 million-$8 million.

RBC Capital Markets analyst Michael Toner said, despite the somewhat gloomy consumer outlook, Endeavour’s overall sales were ahead of consensus.

“However, taking a forward-looking view, the [half-year to date] sales growth [including April] shows signs of deceleration as cost of living weighs on spending,” he said.

Earlier this year, chief executive Jayne Hrdlicka said the group was putting its customers before profits after cutting prices to stay ahead in a highly competitive market.

“To be clear, the intention is that Dan Murphy’s will not be beaten on price by anyone at any point for any reason,” she told a first-half results briefing in March.

Endeavour shares dropped 7.5 per cent in morning trade before recovering around midday to $3.28, down 4.3 per cent.