The Warehouse Group says the rate of growth of sales on its online offerings is far exceeding growth at its traditional bricks and mortar stores.
On Thursday, the group forecast its net profit after tax for the six months to the end of January to be in the range of $46 million to $48 million, down from the $52.9 million it made for the same period last year.
The company is forecasting same store sales at its Red Sheds will be up 4 percent for the period, compared with last year, but has warned that the strength over the Christmas trading period isn't enough to offset the squeezed margins experienced in the first quarter.
The Warehouse Group chief executive Mark Powell says the business is being re-shaped to reflect a retail market that is undergoing significant change.
He says its investment in online platforms for sports, beauty and pets, among others, is all part of the strategy to be the leader in multi-channel retailing, and online growth is strong.
Mr Powell says the trend is continuing of the growth rate online being far greater than the growth rate from bricks and mortar although it's from a far smaller base and online sales in New Zealand are around 5 percent.
But he says online growth rate is about 20 - 25 percent, compared to bricks and mortar which is growing in low single digits across the board.
Mr Powell says some sectors within bricks and mortar stores are suffering more than others, for example there's been a contraction of CDs and DVDs across the board, as well as the impact on apparel of overseas clothing, in particular, now being available online.