Kiwi retailer blames Australia for soft sales

By James Wells

New Zealand discount retailer, The Warehouse, has blamed its Australian stores for a poor half year result.

The Warehouse reported a $NZ7.96 million ($A7 million) loss for the six months to January 29, compared with a profit of $NZ53.9 million ($A47.46 million) profit a year earlier.

The retailer has forecast annual earnings of $NZ83 million ($A73 million) to $NZ88 million ($A77.5 million) including the pre-tax writedown of $NZ$88.8 million following the sale of 120 Australian stores to a private equity company in December last year.

In addition to the underperforming Australian stores, The Warehouse chief executive, Ian Morrice said high petrol prices were affecting consumer sentiment.

"The word we would use for consumer demand is patchy," Morrice said.

"We’re certainly seeing some very mixed signals of demand. We are in our view experiencing pretty soft demand at this point in time."

Following the sale of its Australian operations, The Warehouse is said to be trialling the sale of groceries, pharmaceuticals and liquor to boost earnings and improve market share against retailers including Briscoes Group, Kmart, Farmers and Hallenatein Glasson.

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