Warehouse says Christmas trends hard to pick as sales dip

Photo / NZ Herald

The Warehouse says it is hard to pick trends for the coming months after yesterday reporting sales slipped 0.2 per cent from a year earlier to $362.3 million in the latest quarter.

Managing director Ian Morrice said maintaining sales across the group broadly in line with last year was a "satisfactory" result in the present environment.

He said the retail market continued to be driven by sales and there were no signs of a sustainable recovery in consumer spending.

Sales at The Warehouse red sheds division for the first quarter to the end of October were down 0.6 per cent to $315.8 million, with same-store sales down 1.5 per cent.

An ongoing market decline in CDs and DVDs remained a factor affecting same-store sales, falling 9 per cent compared with the first quarter last year, Morrice said.

He said downloading was hurting his company and its competition.

"We believe that ourselves and JB Hi Fi are taking market share butit's from a market where peopleare increasingly downloading."

Sales in some other categories such as sporting, jewellery, small appliances and health and beauty continued to grow well.

"The last quarter was hit by the lead-up to the GST change and the month immediately following. Some of the higher-ticket items had a pickup just prior to GST but in almost all cases that was offset by a decline."

He said the important Labour Weekend figures fell into the first quarter this year and last year but for some other retailers and data they did not, making comparisons harder.

The outlook for Christmas was difficult to assess.

"There are some very positive signs there but it's actually too early to say," he said.

"The effect of the tax changes will be feeding into people's pockets for the first time about now so it's really too early to say whether more disposable income will translate into more sales."

Warehouse Stationery's first quarter sales were up 2.9 per cent to $46.5 million, with same-store sales up 5.3 per cent on the same period last year.

Shares in The Warehouse closed unchanged at $3.88.