Warehouse Group First Quarter Sales Fall on `Difficult' Trading Conditions

Warehouse Group Ltd., New Zealand’s biggest discount retailer, said first-quarter sales were little changed amid sluggish consumer spending.

Sales fell 0.2 percent to NZ$362.3 million ($283 million) in the 13 weeks ended Oct. 31, the Auckland-based company said in a statement.

Warehouse said sales at the 88 ‘Red Shed’ general merchandise stores have been curbed by weak consumer spending as the New Zealand economy recovers from recession. Trading conditions “were expected to remains difficult for some time yet,” said Chief Executive Officer Ian Morrice.

Same-store sales at the 87 Red Sheds fell 1.5 percent led by a decline in demand for music videos and compact discs, the company said. Sporting goods, small appliance and jewelry sales improved. Same-store sales at the 48 Warehouse Stationery outlets increased 5.3 percent.

“From a group perspective maintaining sales broadly in line with last year is a satisfactory result in the present environment,” Morrice said. “The retail market continues to be highly promotionally driven and we are not yet seeing signs of any real or sustainable recovery in consumer spending.”

To contact the reporter on this story: Tracy Withers in Wellington at twithers@bloomberg.net.

To contact the editor responsible for this story: Iain Wilson iwilson2@bloomberg.net

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