Retailer The Warehouse is finding demand remains unpredictable, despite improving consumer confidence, with September and October sales below expectations.
The company reported yesterday that for The Warehouse Group as a whole, sales for the first quarter to November 1 were $362.9 million, down 1 per cent on a year earlier.
After adjusting for discontinued fresh produce, frozen food and liquor operations, sales were up 1.2 per cent, the company said.
At The Warehouse red shed stores unit, first quarter sales, adjusted for discontinued activities, rose 1.1 per cent to $317.7 million, with same store sales up 0.5 per cent.
The quarter included online sales which started in June and sales from the company's new Mosgiel store which opened in July.
Group chief executive Ian Morrice said that although August was a solid trading month, September and October were below expectations, highlighting a slow start to sales of seasonal categories.
At the Warehouse Stationery unit, first quarter sales were up 2.2 per cent to $45.2 million with same store sales up 3.8 per cent on a year earlier.
Sales grew in technology and business machines, among the high ticket categories most affected by the downturn, but the market for office furniture remained below last year, Morrice said.
Retail demand remained unpredictable despite improving consumer confidence, as retail sales figures from Statistics New Zealand showed.
"Also evident was the extent to which many specialist retailers who were particularly hard hit in the same quarter last year are seeing increased sales off this low base at the present time," Morrice said.
Although consumer spending was expected to gradually improve, the extent of any improvement was uncertain.
But Morrice was confident going into the second quarter that The Warehouse had a strong product offer in place for the key Christmas trading period.
Shares in The Warehouse closed yesterday at $4.11, down from a year high of $4.55 last month.
- NZPA
