Warehouse Group plans to cut 190 jobs at Auckland support office

Thursday, 26 January 2023

The Warehouse Group is consulting with staff about 190 potential job losses at its Auckland support office.

The Warehouse Group, one of the country’s largest retailers, may cut 190 jobs at its Auckland support offices as it responds to “challenging market conditions” and increased online shopping.

A spokesperson said the company shared a proposal with staff on Wednesday to make changes to its structure which may impact 190 roles at Auckland support offices. The changes did not involve store staff.

Retailers are bracing for a tough year as the economy is expected to slip into recession, with consumers tightening their belts and cutting back on spending amid rising interest rates and high inflation.

In late December, The Warehouse Group delivered a weak trading update for its key Christmas period, with lower sales and profit margins while costs increased as it invested in digital platforms.

* The Warehouse staff called to meetings amid redundancy rumours

The World Bank warns the global economy is on a “razor’s edge”.

* Staff at The Warehouse Birkenhead told store will close next month

The company, which owns The Warehouse, Warehouse Stationery, Noel Leeming, Torpedo7 and TheMarket.com, said its sales dropped 5.5% during its key Christmas period from October 31 to December 26, compared with the previous year. Its gross profit margin for the period was down about 300 basis points.

“The Warehouse had relatively disappointing Christmas sales figures, so it makes sense that they’re looking to tighten their belt and cut costs as and where they can,” said Mark Hampton, an investment adviser at Hamilton Hindin Greene.

“It’s obviously horrible for the people who have the prospect of losing their job.”

In recent years, the company has been restructuring its business to cater for increasing customer demand for online and click-and-collect shopping, which resulted in hundreds of job losses at stores.

A company spokesperson said they were currently consulting with teams on the proposal for support staff.

Hampton said the outlook for retailers was softening after “some really good years”.

“They did really well when the Government was printing money and we weren’t allowed to leave and spend our money overseas on holidays,” he said.

“People started spending up large here with the record low interest rates, making everyone feel very rich as their house price went up in value. We're starting now to see all that go the other way. So people are going to be spending less money.

“The Warehouse are doing what they can to cut costs to make sure that they make up for any fall in revenue.”

In mid-afternoon trading on the NZX, the company’s shares slipped 0.8% to $2.59, their lowest level since late December. The stock has shed 12% over the past year.