Phone sales boost retail profit

New Zealanders’ growing reliance on smartphones is changing the way retailers do business, The Warehouse Group’s chief executive says.

The retail giant has reported a net profit after-tax for the year of $57.1 million, down nearly 6 per cent.

Retail sales were up 4.6 per cent to $2.77 billion across the group, which includes The Warehouse, Warehouse Stationery, Noel Leeming, Torpedo7, R&R Sport, No 1 Fitness and Shotgun Supple- ments.

Chief executive Mark Powell said the biggest change in shopping habits over recent years had been the rise of smartphones.

Online sales totalled nearly $150m annually, up from $18.8m in 2011, with all of the company’s brands now available online.

Powell said people tended to think about online retailing just in terms of sales, but it had much wider implications.

Customers would do their research online and were now much better informed consumers, he said. ‘‘It puts pressure on retailers but that is not a bad thing.’’ He said consumers’ ‘‘shopping journey’’ had changed. Instead of looking at brochure that arrived in their letterbox and going in to a store to buy what they wanted, they might look at a brochure, then do some research online, order it from a site and then go into the store to collect their purchase. They would also be exposed to advertising material online and via social media. ‘‘We’ve gone from virtually not being in the online space to being New Zealand’s leading digital retailer.’’

The Warehouse had to keep up with changing buyer behaviour, and had respond more quickly than its competitors, Powell said.

The Warehouse stores and Warehouse Stationery were the company’s standout performers for the year.

The Red Sheds reported their 18th consecutive quarter of sales growth, with operating profit up 3.5 per cent.

Other brands did not deliver so well. Noel Leeming’s operating profit dropped by 43.2 per cent to $6.4m this year, partly due to rebranding costs.

Profit for the Torpedo7 group, which includes R&R Sport, No1 Fitness and Shotgun Supplements, dropped to just above break-even. The group announced a final dividend of 5 cents per share, bringing total annual dividend to 16cps.

Fairfax