WHS - Warehouse Group

[Muse]

Tough sector:
PB Tech,
Harvey Norman
JB Hi Fi.
Noel Leeming.
The Warehouse.
Interesting enough No2 daughter found Smiths City's deal on an Acer computer was the best,

aye, but interesting enough, PB Tech is (or at least was) phenomenally profitable. something about how they imported their stock and the C grade el cheapo retail outlets they had, together with an early and strong ecommerce offering. understand it has been shopped around several times over many years but no one ever bought it, guess no one could get their head around it.

electrical goods and electronic sales a funny business - on average has relentless deflation (PCs, laptops, gadgets, TVs, all tend to get cheaper over time. exception is iphones which get more pricey) but works on increasing volumes year on year on the back of cheaper products (you can check out volumes, delfators and prices for this category on stats nz if you dont believe me, seems hard to fathom). rebates are key.

redsheds not just cheap clothing and dry good foods, but it hosts a reasonable sized electronics and appliance category of its own, plus sporting, homewares & furniture, etc. as far as I'm aware warehouse group has never in recent times provided any granularity into the category makeup of redshed sales. largest category by floorspace clothes, but hard to know at the $ or contribution level.

Q3 sales per average store for noel leeming were the most elevated relative to pre covid Q3 of all the brands.
* RED: $4.49m per average quarterly store vs Q3 FY19 of 4.15m. 2.6% CAGR
* Blue: 0.96m per ave store vs Q3 FY19 of $1.02m (-2% CAGR(
* NL: $3.66m per store vs Q3 FY19 of 2.82m, 9% CAGR. Starting to slow, it fell to 1% sales per ave store from Q3 FY21 (although total sales fell 2.5% on the pcp with a few store closures)
* T7: $1.62m vs $1.51m. 2.4% CAGR. Sales per average fell 6.1% from Q3 last year. So total sales for this division increased during the quarter as there are new stores, but average store revenue is falling sharply. A bit of a worry as these are new stores with long fixed tenures, and quite expensive (second most expensive store to operate of the 4 brands on a CODB per average store basis). A good winter snow could help with ski sales, but this business unit lost quite a bit of money for a long time and wasn't particularly profitable even when home fitness was going through the roof, so plausible could sink back into a loss making position with all these new expensive stores.


winner69, Q3 noel leeming sales fell yes, but they also shut a few stores over the period. Q3 FY21 they had average quarterly stores of 72.5, this year 70. I dunno the JBHIFI store numbers. I guess NL dont think the covid stay at home electronics sales boom is going to last forever.

[CD_CHCH]

Recent shopping experience earlier this month - we were looking for a coffee machine. Went to multiple stores to look at various options, brands, best price, etc but most of all to get advice. Visited 4 Noel Leeming stores in Christchurch including their flagship store in Moorhouse Ave where the salesperson just ignored us as we spent 10 -15 minutes looking at the coffee machines. The salesperson was pretty much standing within 2 metres of us but never even acknowledged we were there. Same experience in the Riccarton and Hornby stores, we did managed to get served in the Northwood store but the 2 salespeople who approached us both admitted they knew nothing at all about the product.

JB Hi-Fi Riccarton and Smiths City Colombo St - again no service. Salesperson at Northwood Harvey Norman was friendly and served us but was making it up as he went along, including telling us facts we knew were incorrect.

Best service in town when looking at coffee machines was Harvey Norman in Hornby and Moorhouse Ave - great service at both places and the staff knew their product and took their time to explain things in detail. End result we purchased a coffee machine from Harvey Norman Moorhouse. Harveys also had the best price in town by $50.

As WHS shareholders would have preferred to support our NZ business but it's a 2 way street - if you aren't going to provide great customer service we're simply not going to shop with you. Have brought the lack of service to Noel Leeming attention before but their reply was a standard copy and paste "we will talk to the store so that doesn't happen again"....based on our experience it's an ongoing issue.

[BlackPeter]

Well with au $4,296 mil of sales a lot of people have.
They have been doing up to 5 years interest free for 20 years or more.
With their stores being franchised,there are a large number of owner operators, who have "the owner's eye".

I guess 5 years interest free with an average of 2% inflation is one thing, but 5 years interest free with 8% inflation is a different game.

Times change ...

[percy]

I guess 5 years interest free with an average of 2% inflation is one thing, but 5 years interest free with 8% inflation is a different game.

Times change ...

As per all HVN promotions it will be well thought out,and as per usual should achieve their objectives ,what ever they are.
Keep in mind HVN's market cap is 4.5 times WHS's.
Gerry Harvey retains "the owner's eye".

[ratkin]

Recent shopping experience earlier this month - we were looking for a coffee machine. Went to multiple stores to look at various options, brands, best price, etc but most of all to get advice. Visited 4 Noel Leeming stores in Christchurch including their flagship store in Moorhouse Ave where the salesperson just ignored us as we spent 10 -15 minutes looking at the coffee machines. The salesperson was pretty much standing within 2 metres of us but never even acknowledged we were there. Same experience in the Riccarton and Hornby stores, we did managed to get served in the Northwood store but the 2 salespeople who approached us both admitted they knew nothing at all about the product.

JB Hi-Fi Riccarton and Smiths City Colombo St - again no service. Salesperson at Northwood Harvey Norman was friendly and served us but was making it up as he went along, including telling us facts we knew were incorrect.

Best service in town when looking at coffee machines was Harvey Norman in Hornby and Moorhouse Ave - great service at both places and the staff knew their product and took their time to explain things in detail. End result we purchased a coffee machine from Harvey Norman Moorhouse. Harveys also had the best price in town by $50.

As WHS shareholders would have preferred to support our NZ business but it's a 2 way street - if you aren't going to provide great customer service we're simply not going to shop with you. Have brought the lack of service to Noel Leeming attention before but their reply was a standard copy and paste "we will talk to the store so that doesn't happen again"....based on our experience it's an ongoing issue.

I am the opposite, hate being pestered instore by sales people, just like being left to browse. If I was thinking of buying a coffee machine, I would look online see who is selling what then look at reviews, narrow it down, then look at a you tube video on the product, by which stage I would know more than any of the sales assistants anyway. Then I would go and buy it at cheapest price I could find

[samjaynz]

I imagine both are gaining share from PB Tech - which used to offer great prices with decent service, but nowadays the service is appalling.

I hate shopping at PB Tech, but grit my teeth and bear it as they do have a better range of specialist equipment and computer gear than Noel Leeming, Harvey Norman etc. Service there is so bad and rude, and they are terrible to deal with for warranty claims of any description. They also seem to sail very close to the wind in terms of fair trading policies re: pricing (e.g. goods go up in price before a sale to be discounted back down). I also don't like that they charge a credit card surcharge.

Got excellent service in Noel Leeming not too long ago when buying a washing machine - the salesman couldn't have been more helpful or knowledgeable and also gave us a discount on top of the clearance price, and wasn't at all pushy when we asked him for a bit of time to look at it ourselves. However, the after sales delivery/install service was poor (cancelled on us twice, and then showed up hours late on the third try)

That being said, service in Noel Leeming seems to depend massively on what you look at, and can sometimes be overly pushy. I looked at a new Mac laptop recently (not much point TBH as there is no stock for ages) and the salesman was in my face within 10 seconds of me opening the laptop lid, basically screeching at me to buy now and what could he do to get me to buy today - which seemed odd as there was a) no stock and b) no way he could actually discount. Was unpleasant and considering that Apple products are the same price everywhere, I'd rather just buy from the Apple online store.

Other times, I've not been able to get any service whatsoever - although service standards in general seem to be declining.

[Snow Leopard]

I am the opposite, hate being pestered instore by sales people, just like being left to browse. If I was thinking of buying a coffee machine, I would look online see who is selling what then look at reviews, narrow it down, then look at a you tube video on the product, by which stage I would know more than any of the sales assistants anyway. Then I would go and buy it at cheapest price I could find

As I sit outside at one of the many local cafes, sipping my Latte, I wonder why anybody would buy a coffee machine for home.

But if you must, buy a good one from the Warehouse empire please.

20220621_082815.jpg

[samjaynz]

As I sit outside at one of the many local cafes, sipping my Latte, I wonder why anybody would buy a coffee machine for home.

But if you must, buy a good one from the Warehouse empire please.

20220621_082815.jpg

I've got a coffee machine at home (an emergency Airpoints Store spendup prior to the first lockdown, in fear of them deciding to wipe my balance and then inevitably declare doing so a triumph of customer service)

Now I've learned how to use it properly, I can honestly say the coffee I make is at least as good - if not better - than many cafes I would frequent; and that is before factoring in the price difference. There are some cafes I go to where I don't think all the time and equipment in the world would allow me to surpass ... but there are lots of "average" coffees being served, and more and more I find myself just making something at home and putting in a keep cup.

I'd average 2-3 coffees per day, and have been doing so since March 2020 and the machine hasn't skipped a beat yet.

Picking good beans and grinding them fresh makes all the difference.

[winner69]

All this chatter about service in Noel Leemings suggests it is not that good

Suppose whenever Nick says things like Our People - Across our stores, distribution centres and support centres, our team members have gone above and beyond to ensure we meet our customers’ needs and wants. we have to take it with a grain of salt - ie not really true (in H1 presentation)

[LaserEyeKiwi]

Here’s a so good its bad service story about Noel leeming.

I have a pair of wireless headphones that have detachable tips (so you can fit a size of your choosing). I didn’t buy these headphones from Noel leeming, but thought i would head in to see if they sold replacement tips as I had lost one. Noel Leeming don’t sell replacement tips, but one of the staff went into the back room and got me a set and insisted there was no charge for them. I was bit dumbfounded at this level of generosity and left the store happy despite not spending a penny.

Now this experience leaves me with a very positive attitude about Noel Leeming and makes me more likely to shop there in future, but I’m guessing giving away inventory for free isn’t great for margins in the short term.