The Warehouse has ended its foray into the grocery business.
The company says groceries did not generate the Extra sales in its traditional merchandise goods that it had hoped for.
The Warehouse will phase out sales of groceries at its three existing stores within the next six months at a cost of $10 - $12 million.
Managing director Ian Morrice says that will be offset by an expected $9 million increase in pre-tax operating earnings for the financial year.
After the announcement, shares in The Warehouse rose 42 cents to $3.51 at 11am on the NZX50 on Thursday.
Radio New Zealand's business editor says the Extra concept is of particular significance as it's central to a Court of Appeal decision blocking the Woolworths and Foodstuffs supermarket chains from taking over The Warehouse.
Woolworths is currently appealing the decision to the Supreme Court.