Grocery shoppers boosted The Warehouse sales to record in Q1

Grocery sales were up 76.2 per cent over the first quarter. Photo / Jason Oxenham

Grocery and homeware shoppers propelled The Warehouse’s store sales to a record $414.6 million in the first quarter, up 39.0 per cent on the year-ago quarter.

The discount retail chain said customers shopped for value. Grocery sales were up 76.2 per cent and homeware sales up 32.2 per cent over the quarter.

Chief executive Nick Grayston said the global economic environment continued to be volatile and unpredictable and local conditions were seeing New Zealanders having to make challenging trade-offs as they managed their household budgets.

For the group - which includes franchises such as Noel Leeming and Torpedo 7 - first quarter sales came to $764.7m, up 21.2 per cent on the first quarter of last year.

Sales were also up 12.3 per cent on the first quarter of its 2020 (July) financial year - the last pre-Covid comparative period.

Foot traffic increased 61.4 per cent across all brands in the quarter, as customers returned to the store.

Group gross profit margin was 32.3 per cent, down slightly from 32.9 per cent a year earlier.

The year-ago quarter was heavily impacted by Covid-19 lockdowns from August 18, 2021, including level 4 for two weeks New Zealand-wide and five weeks in Auckland, with Auckland remaining in level 3 for the remainder of the quarter.

Grayston said the result was a positive start to the 2023 financial year and continued the momentum seen in the second half of 2022.

“In the current environment with increased cost of living pressures, New Zealanders are continuing to seek great value across our brands with 2023 Q1 sales at The Warehouse at the highest level in our history,” he said.

“Every dollar counts for our customers, and we remain committed to keeping the price on key essentials as low as possible. We’re seeing a shift in demand from premium categories, such as technology and home office equipment that experienced a lift in recent years, to growth in our great value essentials like grocery and homeware.

“We are focused on offering affordable groceries to Kiwi families and our grocery sales increased 76.2 per cent this quarter as customers sought fairer-priced alternatives at The Warehouse,” he said.

Warehouse Stationery also had a strong quarter with sales of $56.9m, up 18.0 per cent, but a fall of 9.7 per cent compared to the pre-Covid quarter.

Noel Leeming recorded sales were $246.6m, up 3.3 per cent, and up 9.6 per cent on the pre-Covid quarter.

Torpedo7 recorded sales were $37.4m, up 9.4 per cent and up 57.1 per cent on the pre-Covid period.

“Looking ahead, we are well positioned as we move toward the Christmas and summer peak trading period with good levels of stock across all our brands, despite ongoing supply chain constraints,” Grayston said.

The Warehouse is due to hold its annual meeting on November 25.