Photo: Rafael Ben-Ari/Chameleons Eye/ 123rf
The country's biggest retailer is tightening its belt to match changing consumer spending habits and a slowing economy.
The Warehouse Group's third quarter sales to the end of April were up 3.8 percent on a year ago, while year to date sales were up 4.5 percent at $2.6 billion.
Chief executive Nick Grayston said it was a challenging consumer environment and the group's margins were under pressure.
"We have reprioritised our focus on trading in response to the current economic conditions. Our attention remains on managing costs and delivering gross profit across the group."
Its group gross profit for the nine months was down 1 percent on last year to $865.6 million, and gross profit margin was down 160 basis points (1.6 percentage points) to 34 percent.
However, the squeeze on household budgets was seeing consumers opting for lower priced options, which was working to the benefit of the big "Red Shed" Warehouse stores, with quarterly sales rising more than 10 percent on last year and nine-month sales up 12 percent.
"The economic outlook continues to be challenging and New Zealanders looking for great value has driven continued sales growth at The Warehouse this quarter. Other group brands remain challenged as customers continue to control disposable income while cost of living remains elevated and interest rates continue to rise," Grayston said.
Sales for the Noel Leeming appliance and electronics chain were down 4 percent for the year to date, and the outdoor goods Torpedo 7 sales were nearly 2 percent lower with bike sales down.
The company has cut 340 jobs and reorganised its structure to lower costs and did not pay a half year dividend to ease pressure on its cash resources.
