THE WAREHOUSE GROUP
“The Warehouse group is a company that includes group of retail brands like The Warehouse, Warehouse stationary, Noel Leeming and Torpedo7” (Bowden, 2003). The ‘Warehouse’ has been in existence since 1982 and it was founded by Mr Stephen Tindal. Stephen Tindall held a position of Managing Director since 2001 in the Warehouse Company and before that he served as a Merchandise Director for George Court and sons. (The Warehouse Group, 2018 ) The Warehouse group was awarded ‘The Best New Zealand Company’ of the year by Deloitte’s and Management magazine in 2003. (Bowden, 2003) The Warehouse Group employs over 12000 people across the entire New Zealand and has 243 retail stores and 13 online stores which are spread through the entire New Zealand. (The Warehouse group, 2018) The group has changed its pricing strategy from hi-lo (high-low) strategy to EDLP (everyday low price) strategy which is the reason for the decline in cash flows of the group. The advantage of this strategy is now customer do not have to wait for a sales season to buy groceries and other valuable products. (The Warehouse Group, 2018) Main Shareholders of this group are John Withers, John W M Journee and Stephen Robert Tindall “Steven”. (Bloomberg, 2018)
The Warehouse and Warehouse Stationary
The warehouse is a retail store that sells nearly all the products from clothing, jewellery, hardware, stationary and garden products to cosmetics, food, and other merchandise products. Mr Stephen Tindall was the main mind behind The Warehouse and the catchphrase of the company is “Where everyone gets a bargain”. Mr Pejman Okhovat is the CEO of the Warehouse and the warehouse stationary. The warehouse has experienced a strong growth demands in apparels, daily consuming products and leisure department in 2017 as compared to 2016 which ultimately led to the growth in sales and business. The growth rate for the same store is sales is 4.1 percent and 12 percent increase in earnings before income tax. The business strategy of the warehouse is to keep the prices down and affordable to each individual and among others. The motto of the of the warehouse is ‘start here go anywhere’. (The Warehouse , 2018) The warehouse is known by the name of ‘Red Sheds” has reported a fall in sales from NZ$975 million in the year 2017 for first 6 months and which was reported 940 million this year. There is a decline in the profit of Red Sheds by 17.6 percent compared to last year and same store sales also experienced a downtrend by 3.6 percent this half. Warehouse stationary (Blue Sheds) also reported a drop in its profit by 7.1 percent compared to last year. The reduction in sales and profits was due to the clearance of aged stocks and changing their product strategy which resulted in reduced selling price. (NZ Herald, 2018)
(source- theregister.co.nz)
(Source: betterbusiness.fujixerox.co.nz)
Torpedo7 and Noel Leeming
Torpedo7 is group that includes 1day.co.nz, number one fitness and shortgun.co.nz. It is a firm that sells mountain bikes, fitness machines, body supplements, Adventure gears. The motto of torpedo7 is “Everything for fitness” and the company follow every step to make fitness easier. In 2013, The warehouse group acquired Torpedo7 and saw its potential to one of the successful companies in New Zealand. (The Warehouse Group, 2018). The Strategy of torpedo7 is to grow their customer base keeping in mind the needs of present customers. The number one fitness and shotgun key focus areas will be to more customer centric and to keep the cost of doing business low. The group sales of Torpedo7 were near about were NZ$149 million. (The Warehouse Group, 2018). Noel Lemming is a business owned by The Warehouse group and is one of the parent companies of the group. This company has opened its first store in 1973 in Barrington mall, Christchurch. Noel Lemming has always searched for ways to improve and how to gain mare market share. Noel Lemming firm provides its customer an enhanced retail service. The main business idea of this company is centred around service and improving customer experience. (The Warehouse Group, 2018) Noel lemming has reported 87 percent increase in profit as compared to last year. Operating profit of Noel Lemming was 12.1 million which is 87.6 percent greaten than previous 53 weeks. One of the main reason for such a hike in income was because of the exit of one of its competitor Dick Smith Electronics. Torpedo7 and Noel Lemming has reported a profit this year. Torpedo7 reported a significant increase of 2.5 percent and Noel Lemming reported a hike of 7.5 percent as compared to last year. Same store sales of Noel Lemming were increased by 5.1 percent. However, the overall group confirmed that the operating dropped 0.9 percent to 1.598 billion from last year. (NZ Herald, 2018)
PESTLE ANALYSIS (The Warehouse Group)
Pestle Analysis as we all know include Political, Sociological, Economical, Technological and Environmental analysis of a business. The most interesting analysis that Technological and Environmental analysis of this business.
Technological Analysis
Warehouse Group has modified its technological structure by employing self-checkout machines which could make customer purchasing convenient but there is a decrease in human interaction among the stores as well. The employment of this technology has led to the increase in sales and made the payments methods of customers more flexible. Now, customers do not have to worry about waiting in long lines for billing. The warehouse group has also launched an online store ‘thewarehouse.co.nz’ which made the customer purchasing convenient. Online shopping is the booming business in the technology sector and making the purchasing of customers simple and efficient also signalled a positive step towards technology enhancement in operations. Due to these technological advancements the Warehouse and Noel Lemming has posted an increase in their sales by 25 percent and 54 percent respectively. The technological transformation has been started which will help in further simplification and will support digital strategy to accelerate in 2018. (Yeoman, 2018) The Warehouse group is also thinking of investing in the establishment of new business segment for digital innovation that will be separated from its retail business. In 2018, Warehouse will decrease its reliance on information and technology systems and will in modify its systems to cloud computing technology. (Yeoman, 2018)