Warehouse Group said sales growth stalled in the first quarter as the biggest retailer on the NZX-50 grappled with falling sales of CDs and DVDs and weak consumer demand.
Sales fell 0.2 per cent to $362.3 million in the three months ended October 31, Warehouse said in a statement. Same-storesales at its Warehouse department stores fell 1.5 per cent while Warehouse Stationery achieved 5.3 per cent growth.
The retailer is "optimistic about the prospect of economic recovery in the medium term" though trading conditions are "expected to remain difficult for some time," said managing director Ian Morrice.
Figures show New Zealand consumer spending has been tepid at best, with debit and credit card transactions unchanged last month, excluding auto-related categories, even as GST rose. Warehouse joins homeware and sporting goods retailer Briscoe Group in reporting a patchy performance as households pay down debt rather than spend more.
Shares of Warehouse rose 6 cents to $3.88 yesterday and have declined about 4 per cent this year, while the benchmark index climbed 2 per cent. The NZSE Consumer Index has climbed 9.5 per cent this year.
Sales of CDs and DVDs were down 9 per cent from the same quarter last year, hurt by changing consumer trends to buying online from sites such as iTunes. Morrice said categories such as sporting goods, jewellery, small appliances, health and beauty "are continuing to achieve good growth."
The retailer is scheduled to release its second -quarter sales with is first-half results on March 11 and will update its full-year earnings guidance then.
Warehouse Group has 88 Warehouse stores and 48 Warehouse Stationery outlets.
