The retail sector is coming under increasing pressure on several fronts, with increasing costs and competition squeezing margins, with only limited assistance from the lessening strength of the New Zealand dollar as recession spreads through the economy.
For the quarter to October, Briscoes homeware sales from its 56 outlets were down 15.1% to $53.1 million and sporting goods sales from 32 outlets were down by 13.2% to 24.7 million.
Briscoes also owns Rebel Sport and Living & Giving outlets.
The combined first three quarters' sales were down 6.5% at $259.8 million - with homeware down 4.4% overall and sports goods down 10.8%Briscoes managing director Rod Duke said Labour Day sales would normally be in the third quarter results, but this year it fell on the first day of the fourth quarter, meaning the quarterly downturn was 11.16%, but would otherwise have been around 8.1% down.
"Our August and September results were poor but we were reasonably satisfied with a more buoyant October performance," Mr Duke said.
ABN Amro Craigs broker Chris Timms said discretionary spending in the retail sector was the first to suffer as households adjusted to rising food costs and inflation, uncertainty in fuel pricing and the potential for interest rate rises.
"This reflects households putting their wallets away and the tightening of credit," he said.
Mr Duke said Briscoes now expected to be "closer" to last year's half-year after-tax profit of $11.91 million than indicated by its first-half result this year, but still down.
Briscoes first half to July after-tax result was down 70.76% at $3.09 million, compared to $10.53 million the previous year.
Similarly, Hallensteins Glasson released a statement yesterday saying its profit expectations for the year to the end of August were expected to be "considerably below" the previous year's $15.86, which itself was down 26% on the previous year, and noting that sales for its first quarter to October in New Zealand were down 8%.
Mr Timms said both results and their respective expectations reinforced the dampening trend in the retail sector and the weakening in household spending "across the board".
As with Hallensteins Glasson, Mr Duke noted the outcome of the fourth quarter and full-year result would be "particularly affected by the strength or otherwise" of the retail sector during the coming Christmas period.
Mr Timms predicted there may be a shift of allegiance by some Briscoes and Hallensteins' customers as households seek bargains from other retailers which offer heavier discounts, such as The Warehouse.
Australian electrical goods and furniture retailer Harvey Norman Holdings Ltd said sales on a same-store basis fell 0.6% in the 28 days to November 2 from the same period last year.
