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Warehouse Group is consulting with staff about 190 possible job losses at the Auckland support office.
Warehouse Group, one of the country’s biggest retailers, may cut 190 jobs at its Auckland support offices as it responds to “challenging market conditions” and the rise of online shopping.
A spokeswoman said the company shared a proposal with staff on Wednesday to make changes to its structure that could affect 190 roles in its Auckland support offices. These changes did not include store employees.
Retailers are bracing for a tough year as the economy is expected to slide into recession and consumers tighten their belts and cut spending amid rising interest rates and high inflation.
In late December, The Warehouse Group gave a weak trading update for its key Christmas period, with sales and profit margins narrowing as costs rose as it invested in digital platforms.
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The company, which owns The Warehouse, Warehouse Stationery, Noel Leeming, Torpedo7 and TheMarket.com, said sales in its key Christmas period from October 31 to December 26 were down 5.5% on the previous year. Its gross profit margin decreased by about 300 basis points for this period.
Mark Hampton, investment adviser at Hamilton Indian Green, said: “The warehouse had a fairly disappointing Christmas sales figure, so it makes sense that they are looking to tighten their belts and cut costs as much as they can.”
Obviously, this is terrible for people who are at risk of losing their jobs.
The World Bank has warned that the global economy is on a “razor’s edge”.
In recent years, the company has been restructuring its business to meet increased customer demand for online shopping and click-and-collect, which has led to hundreds of job losses in stores.
A company spokesperson said they are currently consulting with teams about the support staff offer.
Hampton said the outlook for retailers is slowing after “a couple of really good years.”
“They did really well when the government was printing money and we weren’t allowed to go out on holidays and spend our money abroad,” he said.
“People here started spending big with interest rates at record lows, which made everyone feel rich as their home prices went up. We now begin to see that everything is reversed. So people will spend less money.
“The warehouse is doing everything it can to cut costs to ensure that it offsets the decline in revenue.”
In mid-afternoon trading on the NZX, the company’s shares were down 0.8 percent at $2.59, their lowest level since late December. This share decreased by 12% last year.