11 Nov 2013

Warehouse customers responding to store investment

6:51 am on 11 November 2013

The Warehouse chief executive says sales growth of 51% in the first quarter reflects better performance from its Auckland stores and double-digit growth in some categories.

The growth also reflects the company's purchase of the Noel Leeming business in December last year.

Sales through the company's traditional Red Sheds rose 8.8% in the three months, while sales at Warehouse Stationery grew 10.3%.

Chief executive Mark Powell says that was after sales had been in decline for some time, but in the first quarter there was double-digit growth in categories such as apparel, housewares and consumer electronics.

He says the 5.5% rise in Red Shed sales through stores open 12 months or longer in the latest quarter marked the 11th consecutive quarter of same-store sales growth.

Mr Powell says The Warehouse had been in sales decline for some time.

He says sales decline comes from when the products are not good enough, customers are not being served, prices are not good enough and store experience is not good enough.

Mr Powell says The Warehouse has invested in improving its products and it's halfway through a programme to refit stores and customers are responding to that.

But he says the investment is not necessarily translating into increased profit and all the retail factors have to be fixed if it's to be successful long-term.

But Mr Powell says there is a lag in terms of how that translates into increased profitability.