The Warehouse Group faces uphill sales battle

Friday, 15 May 2026

Retail giant The Warehouse Group says trading conditions are expected to remain challenging, with inflationary pressures, global instability and an uncertain domestic economy continuing to affect consumers and businesses.

The group owns The Warehouse red sheds, Warehouse Stationery and electronics retailer Noel Leeming, which will open a new store on Auckland’s Queen Street next summer.

Group chief executive Mark Stirton said like other retailers, costs had increased, particularly international and domestic freight.

The company was balancing its the shopping experience while managing the impact of higher costs on the business, Stirton said. “In this environment, our priority is to stay focused on what we can control.”

The group’s trading update for the third quarter ended May 3 had group sales down 1.4% to $700.8 million compared to the same period to April 27 last year. Same store sales were flat for the 13 week to May 4 last year.

Group sales year to date for the 39 weeks ending May 3 were $2.3 billion, up 0.7% on a like for like same store sales basis.

The flagship chain suffered a 2.5% dip in sales to $405.3m in the third quarter compared to a year earlier, with like for like same store sales down 0.8%.

Warehouse Stationery sales were $57.1m, down 2.9%, with like for like same store sales up 3.1%.

Noel Leeming provided a highlight, recording sales of $236.6m, up 0.7% compared and like for like same store sales up 1.1%.

The group delivered a stable trading result for the quarter, with sales flat on a like for like same store basis, despite growing pressure on consumer confidence, Stirton said.

“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.

Foot traffic declined 1.8% while average customer basket size increased 2.7%. Online sales increased 5.4%, making up 6.8% of total sales, up from 6.4% a year ago, driven by strong online growth in Noel Leeming.

Improved margin management, particularly in Warehouse Stationery and Noel Leeming, partially offset by a decline in The Warehouse.

“Cost discipline and working capital management remains our immediate priority while we continue the work to lift margin performance.” Stirton said.

Looking across the retail divisions, The Warehouse red sheds’ $405.3m sales were down 2.5% on the same period last year, with like for like same store sales down 0.8%. Sales grew in health and beauty and apparel on the back of improved range and store improvements.

Warehouse Stationery booked $57.1m in sales, which included the peak back to school trading week, down 2.9%. Year to date sales were $173.2m up 1.7% on a like for like same store sales basis.

Noel Leeming was boosted by a strong Easter trading period, helping to reverse its first half sales decline with sales of $236.6m in the quarter, up 1.1% on a like for like same store sales basis. But the brand’s sales for the year to date were down 0.7% to $778.9m.

“We’re bringing Noel Leeming back to the city centre with a store designed to offer something different for customers,” the band’s chief executive Jason Bell said.

The store would feature a more modern design and interactive product demos and gaming events. Noel Leeming last operated on Queen Street in 2021.