WHS - Warehouse Group

[LaserEyeKiwi]

Interesting to see they are targeting NZX50 inclusion. Only something like 20% of the shares are eligible for the market cap calculation so there is still a ways to go. Really need Tindall, Foodstuffs or Pascoes to sell down a portion to increase free float.

Disc: one of my largest holdings in long term portfolio.

WHS was part of the NZX50 as recently as 2017. Has the shareholder base changed significantly since then?

[ratkin]

They are looking to increase capital expenditure.

What are they up to?

[bull....]

They are looking to increase capital expenditure.

What are they up to?

for store refurbs , new it system to cut costs.

[bull....]

biggest cost savings will come from swas ( store within a store ) probably makes sense on marginal stores to do this , the profitable store will remain stand alone. savings on leases and staff which they say are on there minds as risks. mentioned on this thread donkey years ago swas was the way to go

growth in NL thru value add services + sales and growth in WHS thru home branding , business hubs + sales while maintaining margins and reducing costs

[bull....]

JB Hifi Q3 sales up 16%

That's pretty good ....bodes well for Noel Lemming sales

super retail out saying there sales ahead of last yr and margins are still strong at the moment also nick scalia saying there sales are looking up 100% on the 100% last yer

[LaserEyeKiwi]

WHS to stop stocking DVD/Blu-rays in stores due to lack of demand (will still sell online, and have some new release titles in store and some school holiday stock). After reading through yesterdays investor day slide deck, I can see how this lines up very well with their inventory management improvements.

I very much approve of WHS effort to become both New Zealand's version of Amazon.com, as well as maintaining profitable physical store network. It is a juggling act though, and usually these sort of attempts are best done by separating management of both efforts, which they sort of have done with themarket.com (but its dependant on how tight a leash management has them on - for instance how often, if ever, does themarket.com offer products from non-WHS owned stores that undercut in price the WHS-owned offerings? If the answer is never, then themarket.com chances of becoming the amazon.com of NZ are slim).

[Habits]

Quarter sales report due this week for WHS possibly Friday... The Warehouse where every shareholder gets a bargain

[ratkin]

WHS to stop stocking DVD/Blu-rays in stores due to lack of demand (will still sell online, and have some new release titles in store and some school holiday stock). After reading through yesterdays investor day slide deck, I can see how this lines up very well with their inventory management improvements.

I very much approve of WHS effort to become both New Zealand's version of Amazon.com, as well as maintaining profitable physical store network. It is a juggling act though, and usually these sort of attempts are best done by separating management of both efforts, which they sort of have done with themarket.com (but its dependant on how tight a leash management has them on - for instance how often, if ever, does themarket.com offer products from non-WHS owned stores that undercut in price the WHS-owned offerings? If the answer is never, then themarket.com chances of becoming the amazon.com of NZ are slim).

They take up quite a bit of space in the red sheds, and the section normally devoid of customers. Hardly anyone buys physical copies of games etc anymore, and most people stream music through spotify. As for the movies, with all the streaming services now available there little point buying one in a shop.
Back in the early/ mid 90s those sections of the store would be packed with customers.

Be interesting to see what they do with the extra space.

[LaserEyeKiwi]

They take up quite a bit of space in the red sheds, and the section normally devoid of customers. Hardly anyone buys physical copies of games etc anymore, and most people stream music through spotify. As for the movies, with all the streaming services now available there little point buying one in a shop.
Back in the early/ mid 90s those sections of the store would be packed with customers.

Be interesting to see what they do with the extra space.

No more DVDs, no more jewellery counters - and I saw in the investor deck they are adding clothes tables (which they said are common in the clothing retail industry as they allow much more stock in the same floor space.) I wonder if they will move the electronics section (TV/Audio/phones/tablets etc) into the warehouse stationary area in those stores that have it as SWAS (Store-within-a-store)

[winner69]

Seems we have exciting times with all these changes in the Red Sheds

[LaserEyeKiwi]

Briscoes just gave a sales update for the last 3 months (Feb - April): up 78% on year ago period (which included a month in lockdown last year), and up 15% 2 years ago.

[LaserEyeKiwi]

Quarter sales report due this week for WHS possibly Friday... The Warehouse where every shareholder gets a bargain

Back in the "Before" times (2019) - WHS provided its trading update on May 10th, so maybe we won't see the update until next week.

[Habits]

Back in the "Before" times (2019) - WHS provided its trading update on May 10th, so maybe we won't see the update until next week.

Apparently delayed news is bad news

[oldtech]

Apparently delayed news is bad news

Don't say that, I just topped up my miniscule holding!

[X-men]

Local warehouse is packed! Profit upgrade is coming soon?

[winner69]

Local warehouse is packed! Profit upgrade is coming soon?

Same here ....Noel Leeming had quite a few looking at laptops .....and hardly a soul in Briscoes ......Kathmandu man said it’s been very quiet this morning

Pet shop was doing brisk business

[X-men]

U went there 6am winner? They opened 9am eh....

[Getty]

Same here ....Noel Leeming had quite a few looking at laptops .....and hardly a soul in Briscoes ......Kathmandu man said it’s been very quiet this morning

Pet shop was doing brisk business

Re Briskcoes & Katmandont

Can be deceptive.

I've staked out a few MHJ stores in my time, and not been impressed, but when the results come in, all is fine.

[winner69]

U went there 6am winner? They opened 9am eh....

Red Shed buzzing about 10.30

Never seen a queue at self serve checkout before .....cheated and did the old go to the service desk trick ...they process sales there

[X-men]

Yes ...yes...I dod that sometimes...hahha...showed my lost face or no speaking english face...then they checked me out at the service desk n I skipped a long Q....hahha

[LaserEyeKiwi]

WHS logistics network still needs a lot of work. Purchased something on Thursday, and it won’t be available for me to pick up from a Wellington store until Wednesday. Almost a week to get from their distribution centre to a main centre store for collection is far too slow.

Heading to Noel Leeming to buy a new fridge/freezer today. Will be interesting to see how long that takes to get delivered/available to pickup.

[Habits]

Red Shed buzzing about 10.30

Never seen a queue at self serve checkout before .....cheated and did the old go to the service desk trick ...they process sales there


Yes ...yes...I dod that sometimes...hahha...showed my lost face or no speaking english face...then they checked me out at the service desk n I skipped a long Q....hahha

.... sneaky ... rich dude winner dresses down and drives a rusty toyota to the foodbank

[Greekwatchdog]

I wonder if its because they have alot less staff processing the orders at check out and distribution center. The store at Barrington Chch has next to no check out staff and people lining up.

[winner69]

.... sneaky ... rich dude winner dresses down and drives a rusty toyota to the foodbank

Oysters and chips for lunch down on the beach once a week more my gig

And love my Hiut jeans (great story that company)

[Habits]

Oysters and chips for lunch down on the beach once a week more my gig

And love my Hiut jeans (great story that company)

Good life Winner! Notice that I did not say you are taking food from the foodbank... if anything you would be giving them food to giveaway, Tindall style, I think :t_up:

[LaserEyeKiwi]

WHS logistics network still needs a lot of work. Purchased something on Thursday, and it won’t be available for me to pick up from a Wellington store until Wednesday. Almost a week to get from their distribution centre to a main centre store for collection is far too slow.

Heading to Noel Leeming to buy a new fridge/freezer today. Will be interesting to see how long that takes to get delivered/available to pickup.

My Noel Leeming trip to buy a fridge did not go well. Wanted a simple cheap fridge - found a model on the floor and the staff member told me there is none in stock and after checking on the computer he had no idea when an order would be filled. I could order one, but he said it could be months before it arrived and shrugged his shoulders. The model was also not listed on their online store.

[X-men]

Oh...poor customer...hard to please...

[LaserEyeKiwi]

Oh...poor customer...hard to please...

Two crappy logistics/inventory related experiences in 4 days while spending over $2000 at WHS properties. I hope my experiences aren't common.

[Dlownz]

Two crappy logistics/inventory related experiences in 4 days while spending over $2000 at WHS properties. I hope my experiences aren't common.
I just brought a washing machine and was expecting a 2 month delay. Arrived in 3 days.
At the moment if you expect to get anything big straight away your dreaming. If you get it your lucky.
I can honestly say WHS Group is very busy

[LaserEyeKiwi]

over last 10 years, the latest the sales update has landed is the 13th May, so may have to wait until Thursday perhaps for the update. Have to go back to 2010 to find a date significantly later (May 18th)

[Habits]

over last 10 years, the latest the sales update has landed is the 13th May, so may have to wait until Thursday perhaps for the update. Have to go back to 2010 to find a date significantly later (May 18th)

Good record keeping LEK. Yes I was wondering today how much longer we would have to wait for the update

[Old mate]

I use torpedo seven mail order regularly. The service is excellent,often overnight delivery even though we live in a rural location.

[Habits]

over last 10 years, the latest the sales update has landed is the 13th May, so may have to wait until Thursday perhaps for the update. Have to go back to 2010 to find a date significantly later (May 18th)

The WHS website says Q3 sales update Friday 14th May

The Warehouse Group :: Financial Calendar
https://www.thewarehousegroup.co.nz/investor-centre/financial-calendar

[LaserEyeKiwi]

The WHS website says Q3 sales update Friday 14th May

The Warehouse Group :: Financial Calendar
https://www.thewarehousegroup.co.nz/investor-centre/financial-calendar

Thanks for this - was unaware they publicly scheduled these in advance.

[bull....]

The WHS website says Q3 sales update Friday 14th May

The Warehouse Group :: Financial Calendar
https://www.thewarehousegroup.co.nz/investor-centre/financial-calendar

great thx hopefully those margins are still rocking

[winner69]

Sales still growing ...but not as fast last few quarters ...like more normal growth

Just as well Noel Leeming booming

The 200m profit touted by some not likely ...only 160m

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/WHS/372173/345975.pdf

[X-men]

Full year NPAT $160m

[winner69]

Full year NPAT $160m

No no ...not NPAT ....only adjusted NPAT

Real NPAT much less

Pretty good though

[JohnnyTheHorse]

Sitting on a PE around 7.5x at that guidance. Also you'll note the word "exceed"... a smart CEO would know the true expectation is more like $165-170m.

Looking forward to future ongoing large cash distributions.

[winner69]

Sitting on a PE around 7.5x at that guidance. Also you'll note the word "exceed"... a smart CEO would know the true expectation is more like $165-170m.

Looking forward to future ongoing large cash distributions.

You are right there mate - a PE of 7.5

Shareprice should double over next few months to catch up

Might even get to 4 bucks today

[Rawz]

Sitting on a PE around 7.5x at that guidance. Also you'll note the word "exceed"... a smart CEO would know the true expectation is more like $165-170m.

Looking forward to future ongoing large cash distributions.

Also what I was thinking..

[JohnnyTheHorse]

You are right there mate - a PE of 7.5

Shareprice should double over next few months to catch up

Might even get to 4 bucks today

Looking through the impacts of the wage subsidy and one off restructure costs the 'true' ongoing PE is probably closer to 9 or so? Either way, very good value.

[X-men]

pretty happy with the update!!!

[LaserEyeKiwi]

No no ...not NPAT ....only adjusted NPAT

Real NPAT much less

Pretty good though

no doubt this has been discussed a lot, but totally makes sense to use the adjusted NPAT figure - that is the actual profit from operations generated in this financial year, before they repaid $67.6million in wage subsidies that was received during the previous financial yEAR.

So $160 Million NPAT is the real figure.

Also, management said they will be paying "at least 70% of the group's full year adjusted net profit" as dividends, which at $160 million NPAT will be "at least" $112 million+ in dividends this year, which means at current share price the gross dividend yield is 9.4%.

[bull....]

very happy with the update , big margins should mean big dividends

Group gross profit margin was 35.5% for Q3 FY21, up 295 basis points on Q3 FY20 and up 196 basis points on Q3 FY19. Group gross profit margin for the year to date ended 2 May 2021 was 36.0%, up 267 basis points on the same period last year, and up 320 basis points on the same period in FY19.

i think its cheap at 7.5 p/e with attractive div yield and scope for bigger dividends based on there strong margins.

[LaserEyeKiwi]

If we include the Feb special dividend in the planned 70% dividend distribution of adj-NPAT, then end of financial year dividend will be at least 18c per share for a total of 36c in dividends paid for the entire year. Potentially higher.

[Beagle]

Good strong update, very happy with that. $160m looks very conservative...good that some companies know how to be conservative. Looking forward to a guidance upgrade in due course.

[bull....]

If we include the Feb special dividend in the planned 70% dividend distribution of adj-NPAT, then end of financial year dividend will be at least 18c per share for a total of 36c in dividends paid for the entire year. Potentially higher.

36c is possible all right based on 60 - 70% payout of npat therefore a 14% gross dividend. not bad compared to 1% in the bank if this is how it pans out

[LaserEyeKiwi]

Positive coverage in the muggle press:

https://www.stuff.co.nz/business/125129793/the-warehouse-expects-to-double-profit-this-year-after-strong-trading

[Entrep]

Fantastic result and happy long term holder too. What a turnaround.

[winner69]

Market slack az today .....hasn’t caught up with the WHS news

[peat]

Market slack az today .....hasn’t caught up with the WHS news

same as it didnt with HGH the other day???

is the market exhausted...?

[ratkin]

Looking forward to some more large dividends in the future. As for the shareprice, who cares, if you think it cheap buy some more !!

[Gunner]

Great update. So come July, the PE ratio will be 8 or 9. The SP has plenty of room to grow. Not sure why todays announcement hasn't changed the SP by more.

[Snow Leopard]

So, looking beyond the wonderful FY21. What does FY22 and further on likely look like?

[winner69]

So, looking beyond the wonderful FY21. What does FY22 and further on likely look like?

Unless margins grow by another 300 to 400 basis points I guess FY22 earnings will grow in line with sales growth (either up or down)

[bull....]

So, looking beyond the wonderful FY21. What does FY22 and further on likely look like?

if sales fall back a bit ( if you think they are up due to covid ) it really shouldnt matter for dividends as long as the margins stay strong.

[Habits]

Market slack az today .....hasn’t caught up with the WHS news

The market knows the growth story, with or without today's numbers so the stock was cheap before now. Eventually it will be a story no one can deny, including snow leopard. Price is up 4.4 pct .... not bad for one day

[Beagle]

So, looking beyond the wonderful FY21. What does FY22 and further on likely look like?

Forsyth Barr came out with a note this week after polishing up their crystal ball saying that they didn't expect international travel to reach pre-pandemic levels until 2026 so there will be plenty of people staying at home and spending at home, (not that I think WHS's typical customer, if there is such a thing, is a huge international traveler).

One of my key investment themes is that retail will be "stronger for longer" and I'm backing that investment thesis with large stakes in WHS and HLG.

[Gunner]

Forsyth Barr came out with a note this week after polishing up their crystal ball saying that they didn't expect international travel to reach pre-pandemic levels until 2026 so there will be plenty of people staying at home and spending at home, (not that I think WHS's typical customer, if there is such a thing, is a huge international traveler).

One of my key investment themes is that retail will be "stronger for longer" and I'm backing that investment thesis with large stakes in WHS and HLG.

I agree. I think the general feeling is a trip to Australia would be nice but is prepared to wait it out at least another year and see what happens with COVID and the vaccine.

[Ferg]

same as it didnt with HGH the other day???

is the market exhausted...?

What do HGH, WHS and HLG have in common? I have finally put 2 and 2 together. No preferential access for brokers analysts. Hence the lack of enthusiasm, the "sell" recommendations you often see on such stocks, and the negative phraseology that accompanies comments extracted through gritted teeth from the supposed "experts" on positive results. They don't get access so they don't put out positive recommendations. Lazy so and so's need to do their own DD without relying on Management. Further, what makes them think they deserve preferential access? Pox on the lot of the them! Nice to see companies coming out with "unexpected" trading updates - that is the companies sticking it to the brokers analysts. Keep it up I say.

[Beagle]

What do HGH, WHS and HLG have in common? I have finally put 2 and 2 together. No preferential access for brokers analysts. Hence the lack of enthusiasm, the "sell" recommendations you often see on such stocks, and the negative phraseology that accompanies comments extracted through gritted teeth from the supposed "experts" on positive results. They don't get access so they don't put out positive recommendations. Lazy so and so's need to do their own DD without relying on Management. Further, what makes them think they deserve preferential access? Pox on the lot of the them! Nice to see companies coming out with "unexpected" trading updates - that is the companies sticking it to the brokers analysts. Keep it up I say.

I'll play. Some dog has heaps of all three because he thinks they're all awesome value stocks that will grow nicely and pay awesome fully imputed dividends. :D
All 3 on compelling metrics, both in terms of genuine value PE and fabulous yield.

[Ferg]

I'll play. Some dog has heaps of all three :D
Nice and welcome back! I have a few of two and lots of the 3rd. Yeah I recently learned of the way analysts treat these organisations and now that I have been told about it, I can see it happening. It kind of explains why some companies are "unloved".

[nztx]

I'll play. Some dog has heaps of all three because he thinks they're all awesome value stocks that will grow nicely and pay awesome fully imputed dividends. :D
All 3 on compelling metrics, both in terms of genuine value PE and fabulous yield.


my thoughts too - can never have enough of these 3 shares either .. ;)

[Entrep]

You're missing KMD for the quadfecta

[LaserEyeKiwi]

What do HGH, WHS and HLG have in common? I have finally put 2 and 2 together. No preferential access for brokers analysts. Hence the lack of enthusiasm, the "sell" recommendations you often see on such stocks, and the negative phraseology that accompanies comments extracted through gritted teeth from the supposed "experts" on positive results. They don't get access so they don't put out positive recommendations. Lazy so and so's need to do their own DD without relying on Management. Further, what makes them think they deserve preferential access? Pox on the lot of the them! Nice to see companies coming out with "unexpected" trading updates - that is the companies sticking it to the brokers analysts. Keep it up I say.

Those 3 are half of my portfolio. Did not know this regarding lack of analyst "preferential access".

[Beagle]

Big spend up for beneficiaries in the budget. Not trying to pidgeon hole your typical WHS customer, because there is no such thing as a typical customer and I for one am happy to shop there and support my company but I would think the budget is good for retailers like WHS, HLG and Briscoes.

[winner69]

Big spend up for beneficiaries in the budget. Not trying to pidgeon hole your typical WHS customer, because there is no such thing as a typical customer and I for one am happy to shop there and support my company but I would think the budget is good for retailers like WHS, HLG and Briscoes.

.....and those in your pidgeon hole love going to KFC and Pizza Hut ...go RBD

Even MFB might get some more orders :t_up:

[oldtech]

Even MFB might get some more orders :t_up:

Without wishing to stereotype :p but is MFB a beneficiary thing?

I have no personal experience, but I know one person who uses it and she's a contractor ... as a millennial she uses it to eat somewhat healthy ... I would have thought that was more the target audience.

[LaserEyeKiwi]

Without wishing to stereotype :p but is MFB a beneficiary thing?

I have no personal experience, but I know one person who uses it and she's a contractor ... as a millennial she uses it to eat somewhat healthy ... I would have thought that was more the target audience.

MFB is really expensive though (cheapest option is $100+ a week for 2 people, and that only provides for 4-5 nights worth of meals) - doubt anyone on a budget would use it at $600 a month for 4 person family bags.

[nztx]

.....and those in your pidgeon hole love going to KFC and Pizza Hut ...go RBD

Even MFB might get some more orders :t_up:


Price might go up with less willing hands willing to go harvesting the goodies
and yet more Robertson inspired Large inflation too .. ;)

What did they say somewhere - the Public Dent is now $100K per household
courtesy the current lot's crock of ongoing chapters of feel good, do very little .. ;)

[kiora]

From memory debt NZ $22K/person, USA 4 x this
I'll pay mine off if you pay yours off ;)

[Panda-NZ-]

NZers have 500k in a mortgage to an aussie bank for comparison.

[bull....]

.....and those in your pidgeon hole love going to KFC and Pizza Hut ...go RBD

:t_up:

back in the day , dole day used to be the busiest day at kfc

[Panda-NZ-]

Though importantly, all NZ made and spent within the country for once lol.

[X-men]

Not anymore bull...now dole day is when everyone got a bargain!

[winner69]

Beagle ...we might get a phone call to take up some of the shares Foodstuffs are discarding

[JohnnyTheHorse]

https://www.nzx.com/announcements/372548

Foodstuffs selling their ~9% stake at a floor price of $3.25.

This puts it right in the running for NZX50 inclusion.

[LaserEyeKiwi]

Exciting times!

Would love for the warehouse itself to pick up these shares itself in a massive buyback.

[Beagle]

Beagle ...we might get a phone call to take up some of the shares Foodstuffs are discarding

Hope so.


Exciting times!

Would love for the warehouse itself to pick up these shares itself in a massive buyback.
That would make a lot of sense.

[bull....]

https://www.nzx.com/announcements/372548

Foodstuffs selling their ~9% stake at a floor price of $3.25.

This puts it right in the running for NZX50 inclusion.

free float will increase significantly so nzx 50 inclusion back in the running. would expect some new institutional investors to enter the register too.

[Dassets]

What a stunning loss of money from Foodstuffs, the old smartest guy in the room syndrome strikes again. Market up around 250%(incl divvys to be fair) since the smartest guy's (Foodstuffs) capital loss partially offset by dividends.

Suppose it also indicates Foodstuffs view on the competitive threat Warehouse represents to them today. But truly when in the last decade has WHS been a competitive threat to them or vice versa??

[Rawz]

What a stunning loss of money from Foodstuffs, the old smartest guy in the room syndrome strikes again. Market up around 250%(incl divvys to be fair) since the smartest guy's (Foodstuffs) capital loss partially offset by dividends.

Suppose it also indicates Foodstuffs view on the competitive threat Warehouse represents to them today. But truly when in the last decade has WHS been a competitive threat to them or vice versa??

Foodstuffs won't care too much I suspect. From their point of view they paid a small fee to guarantee their market position and profits.

Warehouse extra was a threat but clearly not anymore so time to sell up. Maybe they buy a stake in MFB?

[Getty]

@ the time of opening the WHS store in Sylvia Park, the thinking was that WHS was a threat in grocery lines.

That was to be a forerunner of new store format that could do a broader range of grocery than before.

The doors were built to enable cars to be driven in also, so they could be sold from there as well.

How much Foodstuffs s/holding was able to stifle the grocery expansion would be better answered by someone closer to the action.

[Panda-NZ-]

They own or have an exlusivity deal with a chocolate maker. It could be expanded to other food items using a similar set up.

[Panda-NZ-]

Warehouse bakeries?

Breads, pastries ie lots of similarity across that sort of thing.

[Getty]

An adjunct to an instore cafe?

[maclir]

Offered at bookbuild price range of $3.25 -$3.41 per share

[stoploss]

What a stunning loss of money from Foodstuffs, the old smartest guy in the room syndrome strikes again. Market up around 250%(incl divvys to be fair) since the smartest guy's (Foodstuffs) capital loss partially offset by dividends.

Suppose it also indicates Foodstuffs view on the competitive threat Warehouse represents to them today. But truly when in the last decade has WHS been a competitive threat to them or vice versa??

The threat wasn't warehouse so much , it was the threat that either Foodstuffs or countdown took them over and expanded the footprint .
https://www.stuff.co.nz/business/industries/66913234/woolworths-cops-110m--loss-as-it-sells-out-of-the-warehouse

[peat]

so, will reopening price be changed by the firesale?

[LaserEyeKiwi]

A reminder that management said they are currently open to acquisitions - food retailing has shown exceptional resilience over the last year (as it is designated an essential product/service), would love to see WHS have a serious crack at it.

Perhaps could start with an acquisition of one of the few independent food chains and grow from there - something like Moore Wilsons in Lower North Island.

Alternatively they could reboot the food effort in the warehouse stores, maybe go more towards the Costco-like bulk item food deals.

[Onion]

so, will reopening price be changed by the firesale?

I expect so. That’s why I’ve put in a bid - if I get some it will average down my holding price

[LaserEyeKiwi]

so, will reopening price be changed by the firesale?

Its not a firesale though - $3.25 is the floor price for the book build, actual average price will highly likely be much closer to current share price.

[ratkin]

This looks like good news, onwards and upwards.

[JohnnyTheHorse]

This explains the gentle massaging of the share price yesterday to keep it at $3.65 :)

[Dassets]

An adjunct to an instore cafe?

Nido had one of those!!

[Dassets]

@ the time of opening the WHS store in Sylvia Park, the thinking was that WHS was a threat in grocery lines.

That was to be a forerunner of new store format that could do a broader range of grocery than before.

The doors were built to enable cars to be driven in also, so they could be sold from there as well.

How much Foodstuffs s/holding was able to stifle the grocery expansion would be better answered by someone closer to the action.

The Foodstuffs move was really designed to prevent Walmart or Aldi etc to come in. The block could not prevent WHS from doing it themselves but WHS had already had a disaster in trying to roll out grocery well before Sylvia Park. The block was probably achieved by the time GFC rolled past. Walmart had already been reigned in and Aldi had a battle in Australia, no use opening up a second front. Germany has tried that before in another sphere but as on Faulty Towers goes "Don't mention the ......"

[Beagle]

https://www.nzherald.co.nz/business/foodstuffs-to-sell-stake-in-the-warehouse-for-likely-50m-loss/2T7ZINRJGSNL3WOCIZJ3ELF5DE/

[winner69]

https://www.nzherald.co.nz/business/foodstuffs-to-sell-stake-in-the-warehouse-for-likely-50m-loss/2T7ZINRJGSNL3WOCIZJ3ELF5DE/

Probably a big sigh of relief that it wasn't much more - as if they sold last year

[alokdhir]

Article clearly mentions ...peak of retail sales . Also timing of this sale also points in that direction .

Maybe cash out time ??

[winner69]

Article clearly mentions ...peak of retail sales . Also timing of this sale also points in that direction .

Maybe cash out time ??

How can we be anywhere near 'peak of retail sales' when Robertson says the economy is cooking with gas blah blah blah and working from these numbers where GDP is going

Alllooking good for a few years - strong economic growth and high employment and unemployment heading to 4%

[Gunner]

Article clearly mentions ...peak of retail sales . Also timing of this sale also points in that direction .

Maybe cash out time ??

Tailwinds for the next year or two are people are not travelling overseas anywhere near the pre Covid numbers and have more disposable income, benefits have increased and online shopping is gaining more market share.

[Beagle]

Tailwinds for perhaps five more years ? Forsyth Barr out with a recent report figuring that overseas travel will not return to pre-pandemic level's until 2026 !

[Getty]

All good valid opinions being shared as usual.

Sometimes tho, you need to know where you have been, before you know where you are going.

A look at the 5 year graph is a bit more sobering, $2 was the SP for much of that time.

Going forward, is the retail environment going to be consistently 80% better ($3.60) than what it was?

[LaserEyeKiwi]

All good valid opinions being shared as usual.

Sometimes tho, you need to know where you have been, before you know where you are going.

A look at the 5 year graph is a bit more sobering, $2 was the SP for much of that time.

Going forward, is the retail environment going to be consistently 80% better ($3.60) than what it was?

One has to compare apples with apples though - The Warehouse Group is significantly different to where it was 5 years ago - its growing ever more efficient on the operational side - creating better margins - and has grown into new retail segments (T7, Online), and is keen for more acquisitions.

[Getty]

Chickens shouldn't be counted before they are hatched, (especially coked ones), so disregarding future acquisitions, but a bit closer to apples, have a look at the KGN 5yr chart on ASX.

I wonder if that now, resembles where WHS will be in 9 months time?

[bull....]

Chickens shouldn't be counted before they are hatched, (especially coked ones), so disregarding future acquisitions, but a bit closer to apples, have a look at the KGN 5yr chart on ASX.

I wonder if that now, resembles where WHS will be in 12 months time?

lol kgn has got itself in to trouble inventory wise from not being able to handle the growth.

[Habits]

Shot to over 25 bucks a share from 1.50. The founder ruslan kogan with 15.853m shares would have been laughing. Now it has been dumped

[bull....]

Glennie said The Warehouse was "still realising value" and was one of Hobson Wealth's top broker picks.

https://www.nzherald.co.nz/business/foodstuffs-to-sell-stake-in-the-warehouse-for-likely-50m-loss/2T7ZINRJGSNL3WOCIZJ3ELF5DE/

[Joshuatree]

I've applied for some for the income.

[ratkin]

Warehouse could go into Aldi discount type supermarket format, just leave it on pallets. They are freeing up lots of space by no longer selling DVDs etc.
Spent a lot of time shopping in Lidl when in the UK. Something like that could do well. The supermarket sector in this country really needs a massive shakeup.
The likes of Lidl will not come here themselves because the market too small and remote.
Something needs to be done, as our supermarkets are among the most expensive in the world, we all being shafted

[Beagle]

Warehouse could go into Aldi discount type supermarket format, just leave it on pallets. They are freeing up lots of space by no longer selling DVDs etc.
Spent a lot of time shopping in Lidl when in the UK. Something like that could do well. The supermarket sector in this country really needs a massive shakeup.
The likes of Lidl will not come here themselves because the market too small and remote.
Something needs to be done, as our supermarkets are among the most expensive in the world, we all being shafted

I couldn't agree more !!

[Panda-NZ-]

Warehouse could go into Aldi discount type supermarket format, just leave it on pallets. They are freeing up lots of space by no longer selling DVDs etc.
Spent a lot of time shopping in Lidl when in the UK. Something like that could do well. The supermarket sector in this country really needs a massive shakeup.
The likes of Lidl will not come here themselves because the market too small and remote.
Something needs to be done, as our supermarkets are among the most expensive in the world, we all being shafted

+1, no more dvds or bargain bin books.

[silu]

Warehouse could go into Aldi discount type supermarket format, just leave it on pallets. They are freeing up lots of space by no longer selling DVDs etc.
Spent a lot of time shopping in Lidl when in the UK. Something like that could do well. The supermarket sector in this country really needs a massive shakeup.
The likes of Lidl will not come here themselves because the market too small and remote.
Something needs to be done, as our supermarkets are among the most expensive in the world, we all being shafted

Totally agree. The prices we pay in our supermarkets are an absolute rip-off. When I have visitors from rich countries like Austria or Denmark they cannot believe what prices we have to pay even if you factor in that we live at the end of the world. A duopoly doesn't constitute a competitive environment.

[pierre]

I put in a bid via Jarden Direct to buy some of the Foodstuffs WHS sell-down. I got two thirds of my order at $3.27 each.

Will be interesting to see the opening SP on Monday.

[Habits]

I put in a bid via Jarden Direct to buy some of the Foodstuffs WHS sell-down. I got two thirds of my order at $3.27 each.

Will be interesting to see the opening SP on Monday.

Well done you. Good cheap buying that is for sure

[Beagle]

VERY CHEAP. I am quite surprised they would sell at that price. They must have a very different view than I do about the future of the company.

[Panda-NZ-]

It's a rather illiquid stock. Maybe inclusion into the nzx 50 will help.

[pierre]

VERY CHEAP. I am quite surprised they would sell at that price. They must have a very different view than I do about the future of the company.

Thanks Beagle. I hope your view is the correct one. :)

[Gunner]

VERY CHEAP. I am quite surprised they would sell at that price. They must have a very different view than I do about the future of the company.

Maybe theyve been looking to get out for a while and cutting their losses after it's gone up a fair bit. Who knows what they want the capital for but then their bread and butter is groceries and not stock investing.

[Beagle]

https://www.nzherald.co.nz/business/covid-19-coronavirus-the-peaks-and-troughs-of-retail-spending-over-the-last-year/ASJWNMGOV7UPTRR3UYH3KBF2XE/
Paywalled sorry. Lengthy article on the whole retail scene since Covid began. Haven't had time to read it yet, quite a long article. Just posting the link here so I don't lose it or forget to read it sometime in the next few days. (Its dinner time and I want my hot dog food, reading this article can wait).

[LaserEyeKiwi]

I put in a bid via Jarden Direct to buy some of the Foodstuffs WHS sell-down. I got two thirds of my order at $3.27 each.

Will be interesting to see the opening SP on Monday.

wow. What a great deal! Way lower than I thought it would be.

[blackie]

I have WHS shares in my Sharesies account.
can i participate in this "Foodstuffs WHS sell-down" thru Sharesies? as per this info attached

https://intercom.help/sharesies/en/articles/4375263-take-part-in-corporate-actions

[alokdhir]

Maybe theyve been looking to get out for a while and cutting their losses after it's gone up a fair bit. Who knows what they want the capital for but then their bread and butter is groceries and not stock investing.

But your lead managers and investment bankers doing it for u ...after all big bucks involved over $ 100 mil ...seems like they got professional advise that this is a good time to sell ....

[Cyclical]

Spent a lot of time shopping in Lidl when in the UK. Something like that could do well. The supermarket sector in this country really needs a massive shakeup.

Same, Tooting Bec was my local. I could make interesting dishes with creme fraiche, proper mozzarella, smoked salmon, chorizo and stuff like that for a fraction of what you can here. Was more of a budget continental type place. Then off to Asda to buy NZ lamb for cheaper than what it would be in NZ...pretty much sums up the issue.

[Gunner]

But your lead managers and investment bankers doing it for u ...after all big bucks involved over $ 100 mil ...seems like they got professional advise that this is a good time to sell ....
The same ones that advised them to invest in the mid 2000's and lose 50 million over that period in the investment?

[Cyclical]

Totally agree. The prices we pay in our supermarkets are an absolute rip-off. When I have visitors from rich countries like Austria or Denmark they cannot believe what prices we have to pay even if you factor in that we live at the end of the world. A duopoly doesn't constitute a competitive environment.
Just like the building supplies sector. Time Cindy came out and said we're being fleeced.

[Getty]

Good Call.

Timber literally grows on trees, and aggregates flow down rivers from erosion, & clog up rivers, or are just natures deposits in a hillside, yet the price you pay is more aligned to if they were made in Tesla's factory!

[winner69]

The same ones that advised them to invest in the mid 2000's and lose 50 million over that period in the investment?

Was strategic stake to hinder Warehouse plans to get into groceries and to block rumoured Woolworths takeover of Warehouse.

Something like that

[alokdhir]

The same ones that advised them to invest in the mid 2000's and lose 50 million over that period in the investment?

W69 answered it for me ...I am not a fan of their professional expertise about markets and sentiments but still they are professionals in the field ...cant be always wrong ...lol

[alokdhir]

Was strategic stake to hinder Warehouse plans to get into groceries and to block rumoured Woolworths takeover of Warehouse.

Something like that

Selling out means no further threat like that happening perceived ....otherwise they would have kept that investment ...maybe WHS promised to them no interest in groceries business .

[Gunner]

Selling out means no further threat like that happening perceived ....otherwise they would have kept that investment ...maybe WHS promised to them no interest in groceries business .

I dont really get the connection with changing WHS to groceries. WHS along with Kmart have a strong market position selling the type of things they do in NZ. Why would Woolworths take them down the grocery route? Either they're the WHS or they're a supermarket. It wouldnt work having half and half.

[Joshuatree]

A recent survey on Seven Sharp found common groceries cheapest in England ,then NZ 2nd and Aus and USA tailing behind. we do well here at the bottom of the world and such a small population.
I got 100 % of what applied for @$3.27 thru Craig's.

[haewai]

I have WHS shares in my Sharesies account.
can i participate in this "Foodstuffs WHS sell-down" thru Sharesies? as per this info attached

https://intercom.help/sharesies/en/articles/4375263-take-part-in-corporate-actions

Hope you asked Sharesies and not just this motley gang. It's done and dusted now.
I got just over 2/3 of what I asked for at a considerably lower price than I bid.

[stoploss]

Selling out means no further threat like that happening perceived ....otherwise they would have kept that investment ...maybe WHS promised to them no interest in groceries business .
I think the commerce commission would be interested in that kind of "arrangement":ohmy:

[Onion]

A recent survey on Seven Sharp found common groceries cheapest in England ,then NZ 2nd and Aus and USA tailing behind. we do well here at the bottom of the world and such a small population.
I got 100 % of what applied for @$3.27 thru Craig's.

I got just over 2/3 of what I requested through Jarden's -- @ $3.27.

[SBQ]

https://www.stuff.co.nz/business/industries/125204620/the-warehouse-enters-trading-halt-as-foodstuffs-sells-114m-worth-of-shares

LOL what a laugh. You see the NZX and the insiders need to make an announce to unload that amount of shares ; who are the suckers walking in to buy it? (line up all those Kiwi Saver funds) - 9% is not small beans.

First, question why Foodstuff wants to unload their position?

[Gunner]

https://www.stuff.co.nz/business/industries/125204620/the-warehouse-enters-trading-halt-as-foodstuffs-sells-114m-worth-of-shares

LOL what a laugh. You see the NZX and the insiders need to make an announce to unload that amount of shares ; who are the suckers walking in to buy it? (line up all those Kiwi Saver funds) - 9% is not small beans.

First, question why Foodstuff wants to unload their position?

There could be a very valid reason for them wanting the capital. Investing in their own business for growth rather being an investor in the share market.

[ratkin]

I dont really get the connection with changing WHS to groceries. WHS along with Kmart have a strong market position selling the type of things they do in NZ. Why would Woolworths take them down the grocery route? Either they're the WHS or they're a supermarket. It wouldnt work having half and half.

does not have to be exclusively one or the other. Tesco, Sainsburys and Lidl for example have a wide selection of clothing and household goods in some of their supermarkets.

[ratkin]

Same, Tooting Bec was my local. I could make interesting dishes with creme fraiche, proper mozzarella, smoked salmon, chorizo and stuff like that for a fraction of what you can here. Was more of a budget continental type place. Then off to Asda to buy NZ lamb for cheaper than what it would be in NZ...pretty much sums up the issue.

Yes it makes a lie of he distance argument. NZ wine, beer and lamb all cheaper in the UK than the country they originated in. Some people would be shocked if they knew just how much a difference there was between what we pay for groceries compared to the UK.

Used to love the Pizza section in Azda. You couod design your own and choose what toppings you wanted, all for about Seven NZ dollars. Here you go to New world and see an inferior pre made pizza in their deli and they want nearly Twenty dollars for it.

[Habits]

I dont really get the connection with changing WHS to groceries. WHS along with Kmart have a strong market position selling the type of things they do in NZ. Why would Woolworths take them down the grocery route? Either they're the WHS or they're a supermarket. It wouldnt work having half and half.

Already sell grocery lines, not a big part of the shop. Works well for Reduced to Clear shops which seem to be expanding

[Gunner]

Already sell grocery lines, not a big part of the shop. Works well for Reduced to Clear shops which seem to be expanding

A couple of isles is not a supermarket. People might throw in a cheap bag of crisps but no one does their grocery shopping there.

[alokdhir]

Two important questions which will get cleared by market action in next few days .

1. How will SP behave when so many retail investors got sizeable lots at $ 3.27 ...much below current SP ...they may try to cash up for freeing funds for next opportunity

2. Why Foodstuffs thought its better to sell then hold on ...Capital required doesn't stick with corporate lending rates below 2% . Only dividends here would have covered interest costs . So when retail market is so bullish ...talking $ 5 to $ 7 levels then why cash up at the start of bullish trend of next 3-5 years as mentioned here by many learned investors

Why they could not find better priced institutional investors if stock is so bullish in outlook ??

[Balance]

A recent survey on Seven Sharp found common groceries cheapest in England ,then NZ 2nd and Aus and USA tailing behind. we do well here at the bottom of the world and such a small population.
I got 100 % of what applied for @$3.27 thru Craig's.

Ominous when retail investors get most of what they ask for.

Looks like the institutions are not really there as they are usually given preference?

The old saying in the broking industry comes to mind - ‘Better to get a little of something very good rather than all of something not so good!’

[Habits]

A couple of isles is not a supermarket. People might throw in a cheap bag of crisps but no one does their grocery shopping there.

Start SMALL ... yes bugger all lolz

[Getty]

Yes it makes a lie of he distance argument. NZ wine, beer and lamb all cheaper in the UK than the country they originated in. Some people would be shocked if they knew just how much a difference there was between what we pay for groceries compared to the UK.

Used to love the Pizza section in Azda. You couod design your own and choose what toppings you wanted, all for about Seven NZ dollars. Here you go to New world and see an inferior pre made pizza in their deli and they want nearly Twenty dollars for it.

Pre made pizza's, WW own brand, $4 in Countdown.

Guess where they are made? Italy!

McCains pizza $6.30, Made in NZ

Some Watties branded tomato products also from Italy.

The own brand potato fries imported from? The Netherlands!

I used to think NZ was a garden...

Must be clocking up some Green miles eh?

Since updated post#4164, according to website, McCain pizza $6.50, Made in Australia.

[LaserEyeKiwi]

I dont really get the connection with changing WHS to groceries. WHS along with Kmart have a strong market position selling the type of things they do in NZ. Why would Woolworths take them down the grocery route? Either they're the WHS or they're a supermarket. It wouldnt work having half and half.

Most warehouse stores already have several isles devoted to food items (And there used to be the "Warehouse Extra" stores IIRC that had more food range). 99% of the food items have long shelf life and don't require refrigeration - the exception being the bread and milk fridges.

[Panda-NZ-]

Pams pizza I think is made in NZ though haven't checked for years.
Chicago frozen pizza too which is available in most supermarkets.

[JohnnyTheHorse]

Ominous when retail investors get most of what they ask for.

Looks like the institutions are not really there as they are usually given preference?

The old saying in the broking industry comes to mind - ‘Better to get a little of something very good rather than all of something not so good!’

Yes I am somewhat surprised at the discount. I wonder whether institutions are reluctant to hold large positions retailers given their highly cyclical nature? Can be hard to offload large amounts of shares when the story changes, whereas retail investors can generally unload their positions within a few days?

[Old mate]

What's the price going to be at open Monday?Any guesses?

[winner69]

What's the price going to be at open Monday?Any guesses?

$3.55 .....or lots less if the likes of Onion and JT were in for a quick buck (but I gather they don't get the shares until Tuesday)

[percy]

Yes I am somewhat surprised at the discount. I wonder whether institutions are reluctant to hold large positions retailers given their highly cyclical nature? Can be hard to offload large amounts of shares when the story changes, whereas retail investors can generally unload their positions within a few days?

I would guess institutions may doubt the pandemic sales surge will continue,in which case ,the on going issues of right sizing the business still have to be faced.

[nztx]

I would guess institutions may doubt the pandemic sales surge will continue,in which case ,the on going issues of right sizing the business still have to be faced.


Interesting point too -- the post Covid-19 Trading bubble may well affect other stocks too

Does this mean SP overpricing in other retailers & service providers when the effects of the bubble
are through & normalised post Covid trading results start filtering through ?

Indicators on this could be reflected in the earlier of listed retail stocks reporting later this year..

Didn't WHS close down some outlets & lay off 1000 or so last year ?

[Panda-NZ-]

How will more inflation affect WHS too?

Im a bit spooked by amazon increasing their prescence here but some years ago they added GST to those tax avoiders to level the playing field so the warehouse should be good in the medium term.

[ratkin]

The budget should be good for the warehouse, popular with beneficiaries

[Habits]

Pre made pizza's, WW own brand, $4 in Countdown.

Guess where they are made? Italy!

McCains pizza $6.30, Made in NZ

Some Watties branded tomato products also from Italy.

The own brand potato fries imported from? The Netherlands!

I used to think NZ was a garden...

Must be clocking up some Green miles eh?

This made me laugh... if correct about the italian made pizza vs nz made McCains and both sold here. Anyway I will stick with the ready-made dominoes $5 deal :p

[percy]

Interesting point too -- the post Covid-19 Trading bubble may well affect other stocks too

Does this mean SP overpricing in other retailers & service providers when the effects of the bubble
are through & normalised post Covid trading results start filtering through ?

Indicators on this could be reflected in the earlier of listed retail stocks reporting later this year..

Didn't WHS close down some outlets & lay off 1000 or so last year ?
"This is from 8th June 2020 announcement.
The proposed changes to our footprint consider factors including proximity to our other stores,
shopping habits of those in the area, store profitability and lease arrangements. The Group will
continue to assess its store network and has flexibility in its lease renewal profile with approximately
one quarter of its network coming up for renewal within the next 15 months".

Logistics and pricing issues are ongoing.
On the plus side as ratkin pointed out, the budget will give WHS customers more money to spend,which they will do.

[Beagle]

I noted in the recent half year result that their weighted average lease term is 4 years so there is quite a considerable opportunity to rationalize their extensive national footprint over the next few years especially in light of store within a store and online initiatives. I hope they don't do an acquisition, they have a lot of work to do on enhancing efficiencies and optimizing product selection.

[Panda-NZ-]

Where's the self-service checkouts?

Kmart has them already and both supermarkets.

[Baa_Baa]

I would guess institutions may doubt the pandemic sales surge will continue,in which case ,the on going issues of right sizing the business still have to be faced.

The pandemic recovery has and continues to involve distributions of billions of $ into the economy, I suspect retail will benefit (pun) for years to come.

[winner69]

I noted in the recent half year result that their weighted average lease term is 4 years so there is quite a considerable opportunity to rationalize their extensive national footprint over the next few years especially in light of store within a store and online initiatives. I hope they don't do an acquisition, they have a lot of work to do on enhancing efficiencies and optimizing product selection.

But big cash balances are a temptation aren’t ....acquisitions the answer says the text book

[Panda-NZ-]

Share buybacks/special dividends are good. Cash will be eaten up by inflation

[Dassets]

But big cash balances are a temptation aren’t ....acquisitions the answer says the text book
They have sort of done the acquisition thing. Remember Silly Sollies and the other aussi acquisitions. The past acquisitions here a bit opportunistic imo. Don't think there is any appetite or rationale for new ones. Most retailers just busy trying to manage their own transitions in sales channels. What I mean is any aussi or international guys unlikely to come here to have a crack at establishing competition. I don't think retailers bankers would be easy to convince either that world domination is a sound strategy. I think that is the CEOs approach by the looks also. That means it is a divvy stock. What is reasonable as a long term yield?

[Getty]

This made me laugh... if correct about the italian made pizza vs nz made McCains and both sold here. Anyway I will stick with the ready-made dominoes $5 deal :p

Definitely correct, and up to date, I had both last week, and the $4 is a standard price, not on special..

The story is even more bizarre, I'm pretty sure the Italian ones are 50/100g heavier as well, & the pepperoni is top notch.

It wouldnt surprise me to find out the mozzerella cheese is actually made in NZ, & exported to Italy to make them, then send them back here.
While the McCain one doesnt specifically mention Hastings on the box, It probably is made here, but I accept national pricing applies.

As someone else quoted recently on one of these threads, Nino Culotta's book title, "They're a weird mob"

Update, in the interests of accuracy.
Woolworths Pepperoni pizza, 400g. $4.00. Made in Italy.
McCain Spinach & Mozzarella. 350g. $6.50. Made in Australia.

Both standard pricing, not specials, at Countdown.

[Getty]

Where's the self-service checkouts?

Kmart has them already and both supermarkets.

2 WHS stores I have been in, Hastings & Porirua both have self service, at least since last October, probably longer,

[Gunner]

The pandemic recovery has and continues to involve distributions of billions of $ into the economy, I suspect retail will benefit (pun) for years to come.

The covid phase we are in now is optimine I would say for retailers like the Warehouse. No lockdowns, minimal foreign travel, high employment, increased benefits.

[Gunner]

2 WHS stores I have been in, Hastings & Porirua both have self service, at least since last October, probably longer,

They could work on the aesethics on the ones in Christchurch. It looks like the local DIYer knocked them up. No scales like Kmart have either.

[porkandpuha]

2 WHS stores I have been in, Hastings & Porirua both have self service, at least since last October, probably longer,

I have seen at least two in Auckland - Manukau and Takanini

[LaserEyeKiwi]

They have sort of done the acquisition thing. Remember Silly Sollies and the other aussi acquisitions. The past acquisitions here a bit opportunistic imo. Don't think there is any appetite or rationale for new ones. Most retailers just busy trying to manage their own transitions in sales channels. What I mean is any aussi or international guys unlikely to come here to have a crack at establishing competition. I don't think retailers bankers would be easy to convince either that world domination is a sound strategy. I think that is the CEOs approach by the looks also. That means it is a divvy stock. What is reasonable as a long term yield?

Catch up mate - management said after the most recent earnings that they are keen for acquisitions.

[Bob50]

Re the Foodstuffs WHS sell-down. I am disappointed to have missed out on this. I hold WHS in my portfolio and gain personal satisfaction supporting them.
I returned home Friday to find an email from Jarden Direct arrived at 10.30am detailing offer - and for orders to be in by 11.30.
Not much use to me at 6.30 pm Friday evening.
Is this correct-was this offer only for people connected to the internet for those few hours or did I also miss some pre advice this was coming up?

[winner69]

You can see why CEO talking acquisitions - to a certain extend Red Sheds ain't doing the job as the growth engine

I've updated this chart to Jan 2020 (WHS half year) - all you can conclude Rd Sheds sales are still not keeping with overall retail spend but you can say they are not losing market share as fast as they have in the past.

Interesting chart as it tells a lot of stories and when you think about it it might challenge some peoples perceived view of who Red Sheds customers really are.

Just as well margins have expanded and they have cut costs as again Red Sheds financial performance might have been a disappointment

No worries though because these times are different eh

Why do you have so much history on Red Sheds winner? Started from an consultancy/project exercise and morbid fascination as to how Red Sheds might evolve over time has inspired me to keep it all up to date ..... maybe another chapter being written in their history, just maybe. Hope springs eternal they say

[Habits]

Catch up mate - management said after the most recent earnings that they are keen for acquisitions.

Plus one...

[alokdhir]

You can see why CEO talking acquisitions - to a certain extend Red Sheds ain't doing the job as the growth engine

I've updated this chart to Jan 2020 (WHS half year) - all you can conclude Rd Sheds sales are still not keeping with overall retail spend but you can say they are not losing market share as fast as they have in the past.

Interesting chart as it tells a lot of stories and when you think about it it might challenge some peoples perceived view of who Red Sheds customers really are.

Just as well margins have expanded and they have cut costs as again Red Sheds financial performance might have been a disappointment

No worries though because these times are different eh

Why do you have so much history on Red Sheds winner? Started from an consultancy/project exercise and morbid fascination as to how Red Sheds might evolve over time has inspired me to keep it all up to date ..... maybe another chapter being written in their history, just maybe. Hope springs eternal they say

Great depiction of Red Sheds lagging behind overall covid retail boost ...maybe a case of high tide raising all boats here ...Not a fan of WHS management skills and decisions ....but they can get their act together in this opportune time ...lest they will be punished again by markets .

[Old mate]

Winner your graphs are outstanding:t_up:

[ratkin]

deleted...

[Habits]

Winner your graphs are outstanding:t_up:

Looks like they pick up lost ground during recession and low consumer confidence times.

[LaserEyeKiwi]

You can see why CEO talking acquisitions - to a certain extend Red Sheds ain't doing the job as the growth engine

I've updated this chart to Jan 2020 (WHS half year) - all you can conclude Rd Sheds sales are still not keeping with overall retail spend but you can say they are not losing market share as fast as they have in the past.

Interesting chart as it tells a lot of stories and when you think about it it might challenge some peoples perceived view of who Red Sheds customers really are.

Just as well margins have expanded and they have cut costs as again Red Sheds financial performance might have been a disappointment

No worries though because these times are different eh

Why do you have so much history on Red Sheds winner? Started from an consultancy/project exercise and morbid fascination as to how Red Sheds might evolve over time has inspired me to keep it all up to date ..... maybe another chapter being written in their history, just maybe. Hope springs eternal they say

interesting chart - thanks for sharing!

I would think Kmart growth has gobbled up some of the red sheds share of retail growth over the last 5 years as well, given that it is probably the closest thing to a direct like-for-like competitor to the red sheds. I could be wrong, but Kmart growth has now slowed somewhat as they simply have less locations to expand too.

‘however WHS isn’t priced for any growth at all really, so even if red shed growth is mediocre, the good growth from its other operations, and improving margins and operational efficiency and addition of strong online growth - I still consider it undervalued.

[Panda-NZ-]

You can't get food items at Kmart, so even more important to improve on that side of things.
As well as put in the self-service checkouts

[Panda-NZ-]

The garden centres are good value too which some stores have within them.

[Dassets]

Catch up mate - management said after the most recent earnings that they are keen for acquisitions.

I stand corrected, last time was in Standard 1 when I was asked to state Pi to 27 decimals. Yikes I do not like that then. I would be super surprised if the Tindalls would support but hey you never know. I will throw an idea out there, Carters, Your Building Partner! Isn't CHH selling assets,

[Joshuatree]

Bob50.
Tell your broker to ring your mobile in future.Mine rang and I had 30 mins to decide.

[LaserEyeKiwi]

I stand corrected, last time was in Standard 1 when I was asked to state Pi to 27 decimals. Yikes I do not like that then. I would be super surprised if the Tindalls would support but hey you never know. I will throw an idea out there, Carters, Your Building Partner! Isn't CHH selling assets,

That would be interesting - although I imagine they would want a more retail focused operation, but that isn’t to say they couldn’t do that with Carter’s. Company would look a lot like Wesfarmers if that happened (who own bunnings, officeworks and Kmart/target/coles)

[winner69]

interesting chart - thanks for sharing!

I would think Kmart growth has gobbled up some of the red sheds share of retail growth over the last 5 years as well, given that it is probably the closest thing to a direct like-for-like competitor to the red sheds. I could be wrong, but Kmart growth has now slowed somewhat as they simply have less locations to expand too.

.

Interesting that Department Stores Sector (in which Red Sheds and Kmart are included) share of total core retail spend has slowly declined over the years (Stats NZ data)

Some might say that can't be right as there are apparently more and more poorer people these days

[SBQ]

Interesting that Department Stores Sector (in which Red Sheds and Kmart are included) share of total core retail spend has slowly declined over the years (Stats NZ data)

Some might say that can't be right as there are apparently more and more poorer people these days

More poor and displaced people the cause of the drop in retail? More like what COVID has done hitting retailers hard. Perhaps, it's more like the product lines that TWG sells in their shops are junk, out of date, inferior quality, etc. that even the low income earners don't bother shopping at these red sheds. A visit last week I see they're selling packaged foods that were more expensive than the Pak N Save I go shopping at in Chch. You won't trick consumers in thinking the same product is selling for less when prices can easily be found online.

FB Marketplace is a good example of where people are recyle buying.

Again, question why Foodstuff is dumping 9% of TWG shares?

[Sideshow Bob]

Only a few shares traded so far - last at $3.52

[Getty]

. Perhaps, it's more like the product lines that TWG sells in their shops are junk, out of date, inferior quality, etc. that even the low income earners don't bother shopping at these red sheds.

Not so.
I have a 32 yr old TV I bought cheap at the warehouse, still going, & others I bought elsewhere for 3 times the price lasted less than 12 yrs.
I have an electric Jug bought probably 15 yrs ago for $11.
It boils in half the time, and makes a third of the noise of the expensive ones in flash places I stay or visit.

[bull....]

More poor and displaced people the cause of the drop in retail? More like what COVID has done hitting retailers hard. Perhaps, it's more like the product lines that TWG sells in their shops are junk, out of date, inferior quality, etc. that even the low income earners don't bother shopping at these red sheds. A visit last week I see they're selling packaged foods that were more expensive than the Pak N Save I go shopping at in Chch. You won't trick consumers in thinking the same product is selling for less when prices can easily be found online.

FB Marketplace is a good example of where people are recyle buying.

Again, question why Foodstuff is dumping 9% of TWG shares?

foodstuffs are selling there shares because for the first time in years there is actually substantial demand for warehouse shares that they can off-load there holding.

[winner69]

Again, question why Foodstuff is dumping 9% of TWG shares?

Nothing sinister to see here

They just taking the opportunity of favourable market conditions to quit stock they haven't wanted for ages.

[LaserEyeKiwi]

More poor and displaced people the cause of the drop in retail? More like what COVID has done hitting retailers hard. Perhaps, it's more like the product lines that TWG sells in their shops are junk, out of date, inferior quality, etc. that even the low income earners don't bother shopping at these red sheds. A visit last week I see they're selling packaged foods that were more expensive than the Pak N Save I go shopping at in Chch. You won't trick consumers in thinking the same product is selling for less when prices can easily be found online.

FB Marketplace is a good example of where people are recyle buying.

Again, question why Foodstuff is dumping 9% of TWG shares?

People haven’t stopped shopping at the warehouse though, sales haven’t fallen at the red sheds over last 5 years - in fact been pretty consistently around $1.7 Billion annually, give or take a few percent (despite increased competition)

Meanwhile in that same time period Warehouse group has grown Noel Leeming sales from $750 million to somewhere approaching $1.15-1.2 Billion this year.

In fact this year non-red shed revenue (Noel Leeming, Torpedo7 & Stationary) will be in striking distance of accounting for 50% of The Warehouse Groups total revenue. It’s conceivable that in 2022 or 2023 that the red sheds become a minority of WHS revenue, which is something I don’t think many would have expected (could even happen this year if an acquisition happens).

[SBQ]

Nothing sinister to see here

They just taking the opportunity of favourable market conditions to quit stock they haven't wanted for ages.

@ Getty: individual experiences vary. I am biased. When I shop at Costco I see products that everyone buys, items that fit into every home and name brands that people want. Walk into the Warehouse and see what selection of TVs and electronics they have? Where are the name brands? I know this from 1st hand information of my cousin working at corporate office of the Warehouse some 20 years ago. The complaint at the time was name brand distributions have stakeholders - meaning they could not get those brand names because of other retail competitors selling their line. Further back, the approach of "parallel importing" provided more options for buyers but... like Sony says, not all lines are made the same. A Sony CD player made in Thailand or Vietnam did not have the same quality as the Sony made in Japan. After several years this approached died because junk quality is just that, being left with an inventory of junk stock. But they didn't have to wait too long, eventually most of the name brands closed their door on The Warehouse. I suppose that's why the TWG did it through 'acquisitions' by buying out Noel Leeming / Bond & Bond. Interesting I say because these models vary from how Costco and Walmart operate.

@ winner69 & bull....

Weak excuses. Let's be real here. Unloading a significant stock position in a company is NEVER favorable. Especially coming from a company that operates in similar market places and on the same competing field.

You can be sure Jim Cramer will never make such statements that "oh they're selling off stock because of 'favourable market conditions" lol my god. I suppose all you guys can stand around with your hands out for the dividend policy that the TWG has.

Got to love all those Kiwi Saver funds buying up the slack, perhaps that would be the biggest sin ever.

[LaserEyeKiwi]

@ Getty: individual experiences vary. I am biased. When I shop at Costco I see products that everyone buys, items that fit into every home and name brands that people want. Walk into the Warehouse and see what selection of TVs and electronics they have? Where are the name brands? I know this from 1st hand information of my cousin working at corporate office of the Warehouse some 20 years ago. The complaint at the time was name brand distributions have stakeholders - meaning they could not get those brand names because of other retail competitors selling their line. Further back, the approach of "parallel importing" provided more options for buyers but... like Sony says, not all lines are made the same. A Sony CD player made in Thailand or Vietnam did not have the same quality as the Sony made in Japan. After several years this approached died because junk quality is just that, being left with an inventory of junk stock. But they didn't have to wait too long, eventually most of the name brands closed their door on The Warehouse. I suppose that's why the TWG did it through 'acquisitions' by buying out Noel Leeming / Bond & Bond. Interesting I say because these models vary from how Costco and Walmart operate.

@ winner69 & bull....

Weak excuses. Let's be real here. Unloading a significant stock position in a company is NEVER favorable. Especially coming from a company that operates in similar market places and on the same competing field.

You can be sure Jim Cramer will never make such statements that "oh they're selling off stock because of 'favourable market conditions" lol my god. I suppose all you guys can stand around with your hands out for the dividend policy that the TWG has.

Got to love all those Kiwi Saver funds buying up the slack, perhaps that would be the biggest sin ever.

eh - the name brand TVs are all for sale at Noel Leeming of course. Thats how successful market segmentation works - the warehouse is absolutely not for selling high end TVs. People shopping for TVs at the warehouse are after the cheap models. People who want the name brand TVs with superior features go to Noel Leeming (likewise how the warehouse shouldn’t be selling premium brand TVs, it would be terrible for Noel Leeming to be selling the cheap TVs stocked at the warehouse.)

Also you are vastly overplaying how “disastrous” it is for foodstuffs to be selling there stake. Foodstuffs are not an institutional investor - they don’t invest in other companies. The warehouse investment long ago was a one off event that was done to protect its own interests and has been a weird overhang ever since. Now that overhang is thankfully gone, and what’s more it makes NZSX50 inclusion much more likely as a nice unintended result.

[Habits]

Not so.
I have a 32 yr old TV I bought cheap at the warehouse, still going, & others I bought elsewhere for 3 times the price lasted less than 12 yrs.
I have an electric Jug bought probably 15 yrs ago for $11.
It boils in half the time, and makes a third of the noise of the expensive ones in flash places I stay or visit.

He stays in flash places but shops cheapand gets more than monies worth lol... no offence Getty. I walk around in my cheap clothes and eat out at ethnic eateries where I get a fair deal... and shop at warehouse

[SBQ]

People haven’t stopped shopping at the warehouse though, sales haven’t fallen at the red sheds over last 5 years - in fact been pretty consistently around $1.7 Billion annually, give or take a few percent (despite increased competition)

Meanwhile in that same time period Warehouse group has grown Noel Leeming sales from $750 million to somewhere approaching $1.15-1.2 Billion this year.

In fact this year non-red shed revenue (Noel Leeming, Torpedo7 & Stationary) will be in striking distance of accounting for 50% of The Warehouse Groups total revenue. It’s conceivable that in 2022 or 2023 that the red sheds become a minority of WHS revenue, which is something I don’t think many would have expected (could even happen this year if an acquisition happens).

My apologies for not understanding those figures. You could of quoted those sales figures in x 10 times but that does not compute. However, I do understand metrics like 'earnings per share' and P/E ratio but EBITDA leaves a bad taste in my mouth.
Many moons ago I saw The Warehouse time after time, float more and more shares (we call it share dilution) while trying to keep shareholders happy with their dividend paying policy. I have an aunt that has owned TWG shares way back over 20 years ago. If I recall around $8/share. Stock split 2:1 adjusted... still a loss in her books. Man waiting 20 years to get flat line results?

[alokdhir]

As expected WHS star of the downside today $ 3.40 ....Big question is it a buy here or not ?? experts please

[winner69]

As expected WHS star of the downside today $ 3.40 ....Big question is it a buy here or not ?? experts please

BUY BUY BUY is the answer

Lot more upside to come

[alokdhir]

foodstuffs are selling there shares because for the first time in years there is actually substantial demand for warehouse shares that they can off-load there holding.

Mainly retail buying it or getting into the trap ...are institutions smarter here ?? Maybe its the flavour of the season ...does not have long runways of Growth for institutions interest

[alokdhir]

BUY BUY BUY is the answer

Lot more upside to come

Thanks for your prompt thumbs up buddy ...I assume u already in to your max ?? All retail experts are positive ...so must be something here ...BBB has also given thumbs up .

[Beagle]

Thanks for your prompt thumbs up buddy ...I assume u already in to your max ?? All retail experts are positive ...so must be something here ...BBB has also given thumbs up .

BUY I would buy more but already have truckloads.

[winner69]

Retail sales on a roll ...beat guru’s expectations

Westpac man says -

Satish Ranchhod
May 24, 2021

Retail spending rose by 2.7% in the March quarter. That followed a similar sized fall in December. Today’s result was stronger than our forecast for a 0.7% increase, and well above the median analyst forecast for a 1.8% decline in spending. This indicates upside risk for March quarter GDP growth.

Q1 real retail sales (volumes): +2.5% (Prev: -2.6%)

Westpac f/c: +0.7%, Market f/c: -1.8%

Q1 real core sales (volumes): +3.2% (Prev: -2.9%)

Annual change – total real retail spending (volumes): +6.8% (Prev: +4.6%)



Detail

Retail spending rose by 2.7% in the March quarter. That followed a similar sized fall in December.
The rise in spending in the March quarter was widespread, but mainly related to increased spending on household durables, like recreational equipment and electronics. Spending on these sorts of durable items can be lumpy on a quarter-to-quarter basis, and these are the same categories that contributed to last quarter’s decline.
Despite firm demand and ongoing reports of supply shortages, overall retail prices remained flat over the quarter. Prices in core retail categories (which excludes fuel and motor vehicles) fell by 0.7% over the quarter. That followed larger than usual increases during the Christmas shopping period last year.
Today’s result was stronger than our top-of-market forecast for a 0.7% increase, and well above the median analyst forecast for a 1.8% decline in spending.
We’re forecasting a flat outturn for March quarter GDP. That in part reflects the continued drag from the loss of international tourists. Today’s result suggests some upside to that estimate. However, we’ll firm up our forecasts as other partial indicators are released over the next couple of weeks.


Outlook

Retail spending has been resilient since the economy exited lockdown. Spending appetites have been buoyed by the low level of interest rates, strength in the housing market and diversion of spending previously earmarked for overseas holidays back into the local economy. Those factors have helped to offset the drag from the loss of international tourist dollars.

We expect spending will continue to firm over the coming months. However, compared to pre-Covid trends, spending growth is likely to be constrained by the continued lack of international tourists and the slowdown in population growth.

[SBQ]

eh - the name brand TVs are all for sale at Noel Leeming of course. Thats how successful market segmentation works - the warehouse is absolutely not for selling high end TVs. People shopping for TVs at the warehouse are after the cheap models. People who want the name brand TVs with superior features go to Noel Leeming (likewise how the warehouse shouldn’t be selling premium brand TVs, it would be terrible for Noel Leeming to be selling the cheap TVs stocked at the warehouse.)

Also you are vastly overplaying how “disastrous” it is for foodstuffs to be selling there stake. Foodstuffs are not an institutional investor - they don’t invest in other companies. The warehouse investment long ago was a one off event that was done to protect its own interests and has been a weird overhang ever since. Now that overhang is thankfully gone, and what’s more it makes NZSX50 inclusion much more likely as a nice unintended result.

Man... as bad as Kiwi Saver funds that just buy the S&P500 index ETF and pass on the absurd high management fees to NZ investors. There's no skill in doing that. Think about it ; can't get the brand but you see other retailers having it? Can't integrate it into the current business model? Ok the shareholders will weather the storm by making acquisitions. (if you can't beat them... buy them)

Again.. where's the skill? You know these retail outlets take up a lot of real estate. When I walk in and there's like more staff workers than customers, God I can't image the cost associated in keeping these buildings going. Better find ways of saving like turning the lights off.

Is Noel Leeming doing well? How so compared to Harvey Norman?

[Getty]

He stays in flash places but shops cheapand gets more than monies worth lol... no offence Getty. I walk around in my cheap clothes and eat out at ethnic eateries where I get a fair deal... and shop at warehouse

I'm a man of many parts, some think I should depart, lol

I've still got that flash yellow jacket you off loaded onto me tho.

[winner69]

Is Noel Leeming doing well? How so compared to Harvey Norman?

Probably better ...and better than JB HiFi as well

[LaserEyeKiwi]

Man... as bad as Kiwi Saver funds that just buy the S&P500 index ETF and pass on the absurd high management fees to NZ investors. There's no skill in doing that. Think about it ; can't get the brand but you see other retailers having it? Can't integrate it into the current business model? Ok the shareholders will weather the storm by making acquisitions. (if you can't beat them... buy them)

Again.. where's the skill? You know these retail outlets take up a lot of real estate. When I walk in and there's like more staff workers than customers, God I can't image the cost associated in keeping these buildings going. Better find ways of saving like turning the lights off.

Is Noel Leeming doing well? How so compared to Harvey Norman?

Is Noel Leeming doing well???

Lol.

I would recommend go read some WHS earnings reports and then come back here.

[Panda-NZ-]

They need to slash and burn Noel costs like they did in the warehouse.

[winner69]

Noel Leeming Q3 sales up 36%

JB Hi-Fi NZ Q3 sales up 16%

Wonder whose doing better

[Panda-NZ-]

$3.36. .. delicious.

[LaserEyeKiwi]

They need to slash and burn Noel costs like they did in the warehouse.

Check out the investor day presentation. WHS is implementing parallel efficiency upgrades across multiple areas that lower the costs for all their operations (including Noel Leeming).

[winner69]

The Warehouse stops sale of fireworks

https://www.stuff.co.nz/business/125226452/the-warehouse-stops-sale-of-fireworks

[Beagle]

BUY I would buy more but already have truckloads.

I couldn't help myself. Investment 101 - Never look a gift horse in the mouth.

[SBQ]

Is Noel Leeming doing well???

Lol.

I would recommend go read some WHS earnings reports and then come back here.

I've seen this guise before. Long ago when I was living in Canada, we use to have many Canadian retail outlets. The short story was, Walmart and Costco came and wiped them all out. The move of doing mergers & aquisitions failed. Why? Because the product supply chains hold the key.

Harvey Norman supply chain vs TWG? I went appliance shopping 2 years ago and went to all the places. Ended up at Harvey Norman because they had better range, better models, and most of all, more competitive pricing. Oh and their floor salesman told me be careful, not all models are the same meaning a Bosch or Westinghouse brand appliance sold at Noel Leeming were sourced from different outlets. He was correct, the Harvey Norman models were sold throughout Australia and other places around the world. The Noel Leeming appliances, many were models only found in NZ. When I think about repairs and sourcing parts... i'm gonna go with the one that is most widespread sold.

Few months ago at a Warehouse Red Shed I saw an Akai brand fridge/freezer. I was like Holy Moly, "When did Akai, a Japanese electronics branded company started making whiteware appliances?" LOOK!

https://www.thewarehouse.co.nz/search?q=akai&lang=default&search-button=

[Joshuatree]

The Warehouse stops sale of fireworks

https://www.stuff.co.nz/business/125226452/the-warehouse-stops-sale-of-fireworks

What no more babies:confused: population will def go into decline.
P S i have two collectible double happy crackers, you know the ones that would almost blow your fingers off as you waited until the last milliseconds before you threw them ; back in the 60's. Sorry not selling at any price

[BlackPeter]

I've seen this guise before. Long ago when I was living in Canada, we use to have many Canadian retail outlets. The short story was, Walmart and Costco came and wiped them all out. The move of doing mergers & aquisitions failed. Why? Because the product supply chains hold the key.

Harvey Norman supply chain vs TWG? I went appliance shopping 2 years ago and went to all the places. Ended up at Harvey Norman because they had better range, better models, and most of all, more competitive pricing. Oh and their floor salesman told me be careful, not all models are the same meaning a Bosch or Westinghouse brand appliance sold at Noel Leeming were sourced from different outlets. He was correct, the Harvey Norman models were sold throughout Australia and other places around the world. The Noel Leeming appliances, many were models only found in NZ. When I think about repairs and sourcing parts... i'm gonna go with the one that is most widespread sold.

Few months ago at a Warehouse Red Shed I saw an Akai brand fridge/freezer. I was like Holy Moly, "When did Akai, a Japanese electronics branded company started making whiteware appliances?" LOOK!

https://www.thewarehouse.co.nz/search?q=akai&lang=default&search-button=

Where have you been the last 20 years? Akai went broke 21 years ago (and their "Akai professional" Spin off 16 years ago). That's what's happening with HQ Japanese audio equipment.

A company in Singapore bought the rights to the brand name and is leasing that name to whoever needs a name for their product (and happy to pay).

Anyway - we do own an Akai freezer (Chinese production :) bought from the warehouse - and it works quite fine ... very quiet and energy efficient - much better than the NZ made freezer we used to own before :p;

Looking back at the appliances we had over the last 4 decades or so - Bosch appliances are typically short lived and difficult to use (ask my wife), no matter where you buy them. We owned too many of them over the years and the only thing you can rely on is that you have to replace them early. Same is true for Fisher & Paykel - no matter where you buy them, though when I opened the last F&P dishwasher we had I found out that the motor was made in Czechia and the electronics in Italy ... while the frame was made in Germany. What shall I say - the frame was still good when we ditched it.

In essence - my experience is that with appliances neither price nor famous brands are in any way correlated with quality. Maybe Panasonic is a bit better than others - and we do have some of them, but it doesn't matter where you buy them. Means - you can as well buy the cheap stuff at the warehouse ... same chance to get something which works reliable and for a long time as when buying with any of the so called up market chains, unless, of course it is a Bosch - they will always die too soon:):

[SBQ]

Where have you been the last 20 years? Akai went broke 21 years ago (and their "Akai professional" Spin off 16 years ago). That's what's happening with HQ Japanese audio equipment.

A company in Singapore bought the rights to the brand name and is leasing that name to whoever needs a name for their product (and happy to pay).

Anyway - we do own an Akai freezer (Chinese production :) bought from the warehouse - and it works quite fine ... very quiet and energy efficient - much better than the NZ made freezer we used to own before :p;

Looking back at the appliances we had over the last 4 decades or so - Bosch appliances are typically short lived and difficult to use (ask my wife), no matter where you buy them. We owned too many of them over the years and the only thing you can rely on is that you have to replace them early. Same is true for Fisher & Paykel - no matter where you buy them, though when I opened the last F&P dishwasher we had I found out that the motor was made in Czechia and the electronics in Italy ... while the frame was made in Germany. What shall I say - the frame was still good when we ditched it.

In essence - my experience is that with appliances neither price nor famous brands are in any way correlated with quality. Maybe Panasonic is a bit better than others - and we do have some of them, but it doesn't matter where you buy them. Means - you can as well buy the cheap stuff at the warehouse ... same chance to get something which works reliable and for a long time as when buying with any of the so called up market chains, unless, of course it is a Bosch - they will always die too soon:):

I've always insisted doing repairs than to dispose and buy new which is the reason for buying from Harvey Norman - regardless of brand, so I guess the importance is sourcing parts. I do agree that reliability is pretty much the same for all appliances and long gone are the days where you had fridge/freezers that lasted over 25 years (our Sears Coldspot / Whirlpool brand lasted well into I finished uni). Now it seems what ever brand it is, you're lucky to get 10 years. Our top of the line Bosch washing machine is on 11 years now and the only failure I had was the plastic door latch (part easily found on TradeMe $70). Overall i'm not fond of European stuff. Our Diedeitrict induction hob can be flakey at times (random Error off codes). We had a Samsung side by side fridge freezer that eventually died at 7 years. After 3 years, it had many issues like bad control boards, bad thermistor, and lastly refrigerant propellant leaked out of the lines (so no point fixing; compressor was Made in China). Nevertheless there ARE high end appliance brands marketed in N. America that last a very long time (ie SubZero / Wolf) from their long use in commercial restaurants. I've not seen these brands in NZ and perhaps way off the affordability mark here.

I just found it interesting how The Warehouse could sell the 'higher end brands' when the impression is they sell a lot of junk there. I do have a Veon 21" TV in the campervan I bought from there ; only because it had a DC input voltage the same as the battery 12V. Rarely used but still in the van and 6 years going.

[ratkin]

What no more babies:confused: population will def go into decline.
P S i have two collectible double happy crackers, you know the ones that would almost blow your fingers off as you waited until the last milliseconds before you threw them ; back in the 60's. Sorry not selling at any price

Pleased they not selling them, noisy bloody things. 60S and 70S was hey day for backyard bonfire night, in UK we even had a special programme from the hospital showing all the burns victims, fun was had by one and all. We used to roll tyres down the street to build a massive bonfire, then all go down to the shops with our stuffed guys, to do penny for the guy. By midnight the fire engines would be out as everything went tits up.

[Getty]

I've always insisted doing repairs than to dispose and buy new which is the reason for buying from Harvey Norman - regardless of brand, so I guess the importance is sourcing parts. I do agree that reliability is pretty much the same for all appliances and long gone are the days where you had fridge/freezers that lasted over 25 years (our Sears Coldspot / Whirlpool brand lasted well into I finished uni). Now it seems what ever brand it is, you're lucky to get 10 years. Our top of the line Bosch washing machine is on 11 years now and the only failure I had was the plastic door latch (part easily found on TradeMe $70). Overall i'm not fond of European stuff. Our Diedeitrict induction hob can be flakey at times (random Error off codes). We had a Samsung side by side fridge freezer that eventually died at 7 years. After 3 years, it had many issues like bad control boards, bad thermistor, and lastly refrigerant propellant leaked out of the lines (so no point fixing; compressor was Made in China). Nevertheless there ARE high end appliance brands marketed in N. America that last a very long time (ie SubZero / Wolf) from their long use in commercial restaurants. I've not seen these brands in NZ and perhaps way off the affordability mark here.

I just found it interesting how The Warehouse could sell the 'higher end brands' when the impression is they sell a lot of junk there. I do have a Veon 21" TV in the campervan I bought from there ; only because it had a DC input voltage the same as the battery 12V. Rarely used but still in the van and 6 years going.

They dont make 'em like they used to.

My Leonard fridge, and a deepfreeze, bought second hand, $200 for both, delivered 43 years ago, still going strong.
Probably 55yrs old.
Won a F & P fridge, shot after about 10yrs.

[Habits]

I'm a man of many parts, some think I should depart, lol

I've still got that flash yellow jacket you off loaded onto me tho.

You and Rodney looking flash :p

[Getty]

Rodney?, or Ron?

or Billy Field?

[Habits]

Rodney?, or Ron?

or Billy Field?

No Rodney as in Rodney Hide Act leader

[Getty]

there's nowhere to hide in that!
.

[bull....]

Electrical and electronic goods had the largest increase, up 8.4 per cent, followed by recreational goods, up 16 per cent.

https://www.stuff.co.nz/business/125228237/shoppers-spendingup-in-the-march-quarter-kept-the-economy-afloat

warehouse products leading the way

[silu]

They dont make 'em like they used to.

My Leonard fridge, and a deepfreeze, bought second hand, $200 for both, delivered 43 years ago, still going strong.
Probably 55yrs old.
Won a F & P fridge, shot after about 10yrs.

The boss of F&P gets a letter.
"Dear sir, I've had my F&P fridge for over 30 years and it is still going strong"
The boss takes this letter to the engineering department and tells them "Make sure this never happens again".

[Getty]

Awesome!!!

[Getty]

Maybe its just a young wives tale, but I've been told those old appliances usage doesn't get measured by Smart meters.

I welcome expert opinion on that?

[allfromacell]

I get the feeling this sell down was a bit rushed, why do it on a Friday?

Anyway, happy to accumulate shares today on the weakness.

[Rawz]

Dipped down to $3.34, some people got a bargain

[Beagle]

Yeap, I "hounded up" quite a few at $3.36, happy with that. That's going to be the gift I give myself that keeps on giving back. Bit annoyed with myself though that I missed out in the placement on Friday...I never thought they would go under $3.50. Oh well, fixed that today.

[Dlownz]

I was very happy to get in at $3.37.
I was only a week away from buying another parcel so I can thank foodstuffs for saving me some money at their loss. Won't be long before they are back over $3.60.
This is now a great holding stock which is 100% going to grow. Their online store TheMarket has been a great addition and it's following will continue to grow with word of mouth and advertising.

[Habits]

Personally I missed out on the Friday and Monday specials. Looks like there is now a better spread of investors holding shares instead of just one big holder. Sir Stephen please take note of the new happy holders

[850man]

Maybe its just a young wives tale, but I've been told those old appliances usage doesn't get measured by Smart meters.

I welcome expert opinion on that?

Nope, someone is making things up there.... the smart meters measure all consumption regardless of what's using it

[Getty]

Thanks,
Thats the way I saw it too, like water flowing through a water meter, it doesnt matter where it leaks to afterwards, its been measured.

[nztx]

https://www.stuff.co.nz/business/industries/125230179/costco-has-started-recruiting-managers-for-its-auckland-superstore-ahead-of-its-opening-early-next-year

Costco has started recruiting managers for its Auckland superstore ahead of its opening early next year


Costco has opened 12 stores in Australia since 2009, selling everything from fresh food and groceries to diamonds, and even coffins.

Costcos typically stock about 3500 brands, but the retailer has not yet given any details about which Kiwi brands it will stock.

In Australia, Costco prices were 25 to 30 per cent cheaper than at other retailers and the same was expected for New Zealand.


Enough to make Foodstuffs run from WHS at any price or not ? ;)

[Gunner]

https://www.stuff.co.nz/business/industries/125230179/costco-has-started-recruiting-managers-for-its-auckland-superstore-ahead-of-its-opening-early-next-year

Costco has started recruiting managers for its Auckland superstore ahead of its opening early next year




Enough to make Foodstuffs run from WHS at any price or not ? ;)

12 over 12 years is not exactly earth shattering for a country 5 times the population of NZ.

[nztx]

12 over 12 years is not exactly earth shattering for a country 5 times the population of NZ.


Auckland first, then Wellington, Christchurch & Dunedin -- just four in time say here may be a start which may have effects ? ;)

[winner69]

Auckland first, then Wellington, Christchurch & Dunedin -- just four in time say here may be a start which may have effects ? ;)

Wellington too small for a Costco

[nztx]

Wellington too small for a Costco


but increasing villages of newly recruited well paid Public Servants there must be attractive prospect ?

[nztx]

And then there is Amazon - with a large base down under in Oz too ..

[Gunner]

The time horizon would be years for that to evenutuate if it ever did for Costco and thered be inefficiencies in Costco speading themselves along the length of the country. The market is small fry for them to invest and compete with WHS beyond the main centers imo.

[SBQ]

The time horizon would be years for that to evenutuate if it ever did for Costco and thered be inefficiencies in Costco speading themselves along the length of the country. The market is small fry for them to invest and compete with WHS beyond the main centers imo.

As I mentioned before, Costco is entirely a different "shopping experience" than what TWG could offer. Promotional food sampling, name brands (and just you wait when Costco imports direct with their large US buying power). Where I grew up, no one would of thought Costco would come for a small town (of 70K population); what competing retail businesses didn't understand is Costco attracts surrounding communities to drive in and shop. Wellington can easily have 2 Costco warehouses, 1 near Porirua and other towards Lower Hutt. Being like Walmart, they strategically pick locations where people are willing to drive out to. (People will when prices are 1/3rd less than other retailers).

I also mentioned The Warehouse 20+ years ago also had issues in securing brands and product lines as other retailers had contract agreements. Costco doesn't need that ; the WILL import direct overseas from name brand suppliers. Oh and Costco's return policy is best in industry ; they also force the distributor or supplier to take back broken defective items or for warranty.

[Gunner]

That's great, 2 in Wellington is not a concern.

[BlackPeter]

As I mentioned before, Costco is entirely a different "shopping experience" than what TWG could offer. Promotional food sampling, name brands (and just you wait when Costco imports direct with their large US buying power). Where I grew up, no one would of thought Costco would come for a small town (of 70K population); what competing retail businesses didn't understand is Costco attracts surrounding communities to drive in and shop. Wellington can easily have 2 Costco warehouses, 1 near Porirua and other towards Lower Hutt. Being like Walmart, they strategically pick locations where people are willing to drive out to. (People will when prices are 1/3rd less than other retailers).

I also mentioned The Warehouse 20+ years ago also had issues in securing brands and product lines as other retailers had contract agreements. Costco doesn't need that ; the WILL import direct overseas from name brand suppliers. Oh and Costco's return policy is best in industry ; they also force the distributor or supplier to take back broken defective items or for warranty.

Sounds amazing. NZ customers have been long enough ripped off by the duopoly of Foodstuffs and Woolworths. If it is true that Costco is coming and better and cheaper than the resident supermarket bullies - then they can't come fast enough.

However - while I always thought that the likes of Pak'n Save and still worse Countdown / New World are ways overpriced (compared to supermarkets in e.g. Europe or North America) - I never felt the same about the Warehouse. Warehouse sells sometimes better and sometimes lower quality, but the price is - compared to other major markets, what you would pay there as well.

Lets hope that the Warehouse and Costco together manage to teach Foodstuffs and Woolworths a lesson - shall we?

Anyway - it would be good news for consumers ... if it really comes true. However - don't forget - they talk for the last 20 years about Aldi coming to NZ, and so far they didn't. Talk is cheap. Probably learned already in Australia that selling good quality at a reasonable price is not so easy in this part of the world. Aldi's sells in Germany good product for low prices. In Australia however - while a bit cheaper than the competition - they sell mainly cr*p.

I am sure Foodstuffs and Woolworth are shaking in their boots - and certainly no reason to worry for the Warehouse.

[Beagle]

Warehouse has how many stores in N.Z. ? Two hundred and something if my memory serves me correctly. Answer is sure to be in here somewhere http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/WHS/371579/345273.pdf
Say Costco does open one store in Westgate, so what ? I live in one of the best suburbs in West Auckland but its still an annoying 30 minute drive each way (outside of peak hour traffic, much more during peak hour) to see one of my best mates in Westgate. My point is, travelling within Auckland is now a nightmare no matter what time of the day. Took me 15 minutes each way to drop off my granddaughter to the next suburb from where we live last evening...(thanks for the hospital pass Mrs B). The traffic and cost of commuting in Auckland is diabolical.
Sure Costco will have some pull in Westgate and immediate suburbs surrounding but there must be dozens of Warehouse suburban stores in Auckland and my closest is about 7 minutes drive away. Time and commuting cost is also money.

[winner69]

Warehouse has how many stores in N.Z. ? Two hundred and something if my memory serves me correctly. Answer is sure to be in here somewhere http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/WHS/371579/345273.pdf
Say Costco does open one store in Westgate, so what ? I live in one of the best suburbs in West Auckland but its still an annoying 30 minute drive each way (outside of peak hour traffic, much more during peak hour) to see one of my best mates in Westgate. My point is, travelling within Auckland is now a nightmare no matter what time of the day. Took me 15 minutes each way to drop off my granddaughter to the next suburb from where we live last evening...(thanks for the hospital pass Mrs B). The traffic and cost of commuting in Auckland is diabolical.
Sure Costco will have some pull in Westgate and immediate suburbs surrounding but there must be dozens of Warehouse suburban stores in Auckland and my closest is about 7 minutes drive away. Time and commuting cost is also money.

90 Red Sheds 488,000 sq m of floor

164 other stores

90 stores is about saturation for NZ ....most efficient level is probably a little less than 90

There used to be a rule of thumb retail analysts liked quoting about Red Sheds ....the more footprint they added the less efficient they got ...like make the same or less profit.

[LaserEyeKiwi]

They actually closed 3 TWL stores last year, and opened 1. Same store sales revenue was actually up 6% for TWL.

Aim is for 40 of those 90 TWL stores to have a Warehouse Stationary store inside them once that SWAS project is completed.

makes me wonder actually how the revenue is broken up from those. For instance i’m guessing warehouse stationary revenue is not included in TWL revenue for reporting purposes, meaning the revenue from those existing warehouse store locations is perhaps actually increasing substantially, but it’s not apparent in the top line reporting, but would be contributing a large gross margin improvement.

[850man]

Warehouse has how many stores in N.Z. ? Two hundred and something if my memory serves me correctly. Answer is sure to be in here somewhere http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/WHS/371579/345273.pdf
Say Costco does open one store in Westgate, so what ? I live in one of the best suburbs in West Auckland but its still an annoying 30 minute drive each way (outside of peak hour traffic, much more during peak hour) to see one of my best mates in Westgate. My point is, travelling within Auckland is now a nightmare no matter what time of the day. Took me 15 minutes each way to drop off my granddaughter to the next suburb from where we live last evening...(thanks for the hospital pass Mrs B). The traffic and cost of commuting in Auckland is diabolical.
Sure Costco will have some pull in Westgate and immediate suburbs surrounding but there must be dozens of Warehouse suburban stores in Auckland and my closest is about 7 minutes drive away. Time and commuting cost is also money.

Will Costco be doing online trading? If the 25-30% lower price is apparent here then online trading could take a good bite out of everyone's lunch.

[LaserEyeKiwi]

Will Costco be doing online trading? If the 25-30% lower price is apparent here then online trading could take a good bite out of everyone's lunch.

everyone’s aware Costco has a large annual membership fee right? About $100 a year. It’s an interesting business model, but by design prevents many lower income people from using them.

[Dlownz]

everyone’s aware Costco has a large annual membership fee right? About $100 a year. It’s an interesting business model, but by design prevents many lower income people from using them.

TheMarket run by WHS has a subscription service. It's 5.99 a month and get your free shipping

[iceman]

everyone’s aware Costco has a large annual membership fee right? About $100 a year. It’s an interesting business model, but by design prevents many lower income people from using them.

Costco opened up in my old home country a few years ago, in a city or rather 3 cities with a combined population of around 200,000. About 75% of households now have an active membership. It completely changed the retail landscape and lowered prices on almost everything.
But most affected were petrol retailers when Costco started supplying petrol MUCH cheaper than others, so much so that people would drrive there for the petrol discount and do their shopping at the same time, also cheaper than competitors.

The other surprising losers were wholesalers/importers.. Nearly all food service businesses, being your local dairy, restaurants, ice cream parlour, you name it, found their ingredients much cheaper to bulk buy at Costco than from previous suppliers.

So I'm less worried about competition to WHS than I would be for holdings in ZEL, supermarket chains etc

[SBQ]

Where I grew up, Costco came in 1993 and my uni friend (that started working there since college) pursued a career in accounting. His work at Costco on the floor moving stock around, doing customer support, and eventually into accounting. Shortly after graduation he was recruited at head office in Canada back east and that was the last I saw of him. During the last visits together, I told him I was on my way moving to NZ and showed him my change in tax status with Revenue Canada. It was interesting times because most Uni students don't get the chances we did by moving away in great distances. Anyways, I asked him (this would be around 1999) why has Costco not pursued into opening up in New Zealand? The inside info he told me was head office was considering Australia to opened up (note at that time Costco Seoul Korea and in Taiwan was already operational). He told me that the problem (and he was doing account at the corporate head office level) was that NZ is a very small market place and worse of all, the supply chain would be a difficult issue in that pretty much, their whole product lines would have to be imported into NZ. For those not familiar with Costco, not every warehouse has the same product line. Where I grew up they sometimes sold snow mobiles but you would not find that in say Vancouver Costcos. I'm not sure how this would reflect in NZ but if the local supply chains prove difficult, there may not be much of a go here if the prices are not low enough. We all know the duopoly food retailers in NZ have a very tight lid on the supply chain. Likewise with many industries like Fletcher building.

Membership has benefits and for good reason. My uni friend informed me that the annual membership fee is a big revenue maker and I believe it. But there is a key reason for this approach and I will attest to it. What it does it filters out those who are really Costco shoppers and those that are marginally not, and I hate to say it but it gives an exclusive level of shoppers; typically those from higher incomes. Where I grew up you NEVER saw and bums or those on the low end shopping in Costco as for starters, they catered to high volume LARGE BULK SIZE shopping - rarely you would walk out spending less than $200 because items like toilet paper were sold in such large size that you would only buy it once every 2 or 3 months. Those on the low income don't have that kind of level of spending, nor would bother paying for annual membership. But the savings are there. In the same hometown where I grew up, Costco brought in petro station and the impact was severe. As in the previous post the price difference was considerable that people spending $150+ to fill up their pickup truck knew the savings was enough to drive from 1 side of town to Costco (figure 15% price difference). My friend told me it was a god sent when Costco opened up their petro stations because for several years the locals complained about price fixing by all the petro stations. Now that the table had turned around, they had to lower prices to be more competitive but I would say during a course of 3 years, half of these petro stations closed up.

@ Beagle:

Again, not sure how this flows in NZ but it will be interesting to see if Costco will manage some price control. I would imagine most of the items would be imported but here's one key distinction that other retailers don't have. Costco is known to sell the 'surprise factor' of items on the floor where you just WANT IT but know no one else in the country has and because of this, you can be many will make that long journey to Costco just to buy it.

As for online purchases, it took a very long time for Costco to offer that service but the problem is more to do with regional supplies. Not every Costco sells the same item so what you would see online would be very generic items.

[LaserEyeKiwi]

They actually closed 3 TWL stores last year, and opened 1. Same store sales revenue was actually up 6% for TWL.

Aim is for 40 of those 90 TWL stores to have a Warehouse Stationary store inside them once that SWAS project is completed.

makes me wonder actually how the revenue is broken up from those. For instance i’m guessing warehouse stationary revenue is not included in TWL revenue for reporting purposes, meaning the revenue from those existing warehouse store locations is perhaps actually increasing substantially, but it’s not apparent in the top line reporting, but would be contributing a large gross margin improvement.

So I contacted WHS investor relations yesterday enquiring how the revenue for Warehouse Stationary Store-within-a-store (SWAS) is reported at earnings, and got a reply:

‘Thank you for your email enquiry, all Warehouse Stationery revenue and results - both standalone stores and SWAS - are all included in the Warehouse Stationery results.’

Needless to say, this dramatically changes how I perceive the TWL segment results.

TWL revenue (“The red sheds”) was up 6% on a same store basis last year. But this excludes all revenue from warehouse stationary stores that have been located inside TWL stores. Therefore the true amount of same store revenue growth at The warehouse locations is significantly higher - and supports the increasing company wide profit margins.

WHS does not have to pay much of anything extra in operating costs to operate those SWAS - other than a couple of extra staff on duty at each location - but brings in significant amounts of extra revenue at those existing locations. It doesn’t show up in TWL segment results, but it does on the WHS company wide profits.

Looking at warehouse stationary alone, I would say the target is to reduce costs there as much as possible by eliminating as many standalone stores as they can and replacing with SWAS and online fulfillment, while maintaining select standalone locations in major business hubs. If I had to guess I think warehouse stationary revenue growth will be low, but profits will increase significantly.

Although would be interesting to know how they apportion costs of the SWAS locations. For instance is WS segment taking on operating outs of a shared location based on their share of the buildings footprint? If so, then the increased profits might show up in the TWL segment instead (as its share of a locations operational costs fall)

there are currently 20 SWAS, and they are aiming for 45 (about half of red sheds locations)

[BlackPeter]

The Warehouse is in the herald ... and their name is mentioned in the same paragraph together with amazon, alibaba, wechat and weibo. Big digital plans, if it works out great things to come.

https://www.nzherald.co.nz/business/tech-takeover-nick-grayston-on-warehouse-groups-growth-strategy-inspired-by-amazon/CIQWRDAKZRKBI3DEN4HJ5EOZQM
[paywalled]