Warehouse Shoppers Spend More Per Visit Despite Hard Times

The Warehouse Group has posted stable sales despite tough economic conditions, with customers making fewer shopping trips but spending more per visit.

The retail giant, which operates The Warehouse Red Sheds, Warehouse Stationery and Noel Leeming stores, reported third-quarter sales of $700.8 million, down 1.4 percent on the same period last year. However, like-for-like sales across existing stores remained flat.

Group chief executive Mark Stirton said rising fuel costs were changing shopping patterns across the country.

"As fuel prices rose, we saw customers become more conscious of travel, making fewer shopping trips but buying more when they visited our stores," Stirton said.

The trend was reflected in company figures, with foot traffic down 1.8 percent but average basket size up 2.7 percent.

The Warehouse Red Sheds recorded the biggest decline, with sales falling 2.5 percent to $405.3 million. Warehouse Stationery sales dropped 2.9 percent to $57.1 million, while Noel Leeming bucked the trend with sales rising 0.7 percent to $236.6 million.

Online sales provided a bright spot, growing 5.4 percent and now representing 6.8 percent of total sales, up from 6.4 percent the year before. Noel Leeming showed particularly strong online growth.

Despite lower overall sales, the group's profit margins improved, rising by half a percentage point in the quarter as the company focused on better margin management.

Noel Leeming announced plans to return to Auckland's city centre this summer with a flagship store at 192 Queen Street, after closing its previous Queen Street location in 2021.

Noel Leeming chief executive Jason Bell said the new store would offer a different retail experience.

"We're bringing Noel Leeming back to the city centre with a store designed to offer something different for customers," he said.

"Alongside the latest technology, the Queen Street store will feature a more modern design and interactive product demos, gaming events and expert service, creating an exciting experience for customers."

The store opening is expected to coincide with the launch of Auckland's City Rail Link.

Looking ahead, Stirton warned that challenging conditions would continue, with inflation, global instability and economic uncertainty affecting both consumers and businesses.

"We're doing everything we can to balance providing everyday value for customers while managing the impact of higher costs on our business," he said.

"In this environment, our priority is to stay focused on what we can control."