The Warehouse Group 2018 Annual Report

THE WAREHOUSE GROUP
2018 ANNUAL REPORT
TOWARDS
INTEGRATED
REPORTING

Helping Kiwis live
better every day
OUR GROUP PURPOSE

Contents
The Warehouse Group Limited

Our shared values 02
Group highlights 03
Chair’s report 04-07
Our Board 08-11
CEO’s report 12-17
Financial highlights 18-19
Our strategy 20-21
Our group profile 22-23
Our transformation 24-27
EDLP case study 28-29
Integrated reporting 30-31
Our networks 32-37
Our expertise 38-43
Our people 44-51
Our relationships 52-61
Our environment 62-67
Financial capital 68-71
Financial statements 72-99
Annual 5 year summary 100-101
Governance report 102-116
01Annual Report 2018

About us
Group Highlights
About us
Our shared values
OUR SHARED VALUES
Take the lead
Create the way
Be the experience
Here for good
Each of our four retail brands has
its own unique identity. This year
we identified the values that we
share and that unify us as a group.
Our values light the path to our
future, guiding our conversations
and decisions today so we will
deliver on our vision and purpose
tomorrow. United by these values,
we stand together as one.
02
The Warehouse Group Limited

revenue increase on The Warehouse app
employees in New ZealandThe Warehouse app rating on iTunes
(rating at time of publication)
275%
50%
4.7 star
raised for communities in FY18
$5.3m$63m
Making the desirable
affordable and the
affordable desirable

since 1982
raised in donations for
New Zealand since 1982
EV chargers installed at
The Warehouse stores,
saving around 7,500kg of CO
2
of customers shopped with two
or more Group brands in FY18
people visited 251 stores
every week
bikes serviced each week
at Torpedo7 stores
24
12,000
200
2m
Group highlights
03Annual Report 2018

The Warehouse Group has delivered
a solid adjusted Net Profit After Tax
(NPAT) result of $59.0m for FY18, in
what has been a significant year of
change for the business.
We integrated separate business
units into a more collaborative group,
and invested in capabilities and
world-class talent. We fundamentally
changed our pricing strategy in the
core Red Sheds, and embarked on a
two-year transformation programme
to accelerate our strategy of fixing
the retail fundamentals and investing
in our digital future.
In the context of this change, to
deliver a profit result above guidance
is very pleasing.
Financial results
The Group has reported a net profit
attributable to shareholders for the
year of $22.9m, which is an increase
of 12.0% on last year’s result of $20.4m.
As the reported profit includes a
number of one-off items, our normal
practice is to also report an adjusted
net profit number which reflects the
underlying business performance, and
this is the number around which we
provide profit guidance to the market.
Our adjusted NPAT for FY18 is
$59.0m, which is (13.4%) down on last
year’s $68.2m. This result was up on the
market guidance of $50.0m–$53.0m
that we issued at the half year, due to
a stronger than expected finish to the
financial year.
As indicated at the half year, the
Group’s Short Term Incentives (STI)
schemes have been triggered in FY18.
This represents an increase in cost
year-on-year as the schemes were only
partly triggered in FY17. If we normalise
the result for the impact of the STI
Chair’s report
We’re on plan
Chair’s report
Joan Withers
payments, the adjusted profit result
would have increased 1.6% year on year.
In FY17 the material one-off impacts
on our profit result were the sale of our
Financial Services business, restructuring
costs and some property sales. This year
the one-off impacts relate to a write-down
of the goodwill asset in Torpedo7 as the
business takes longer to scale up, and
restructuring costs associated with our
transformation.
While there is still more work to be
done, I’m heartened by the progress
that has been made this year to ensure
the Group is competitive and delivers
sustainable profitability. We're on plan
to improve EBIT, and I’m satisfied with
our progress as we move closer towards
our goal.
We have announced a final dividend
of 6.0 cents per share, which totals to an
overall dividend payment of 16.0 cents
per share in FY18. This dividend payout
is above our dividend policy and reflects
the Board's confidence of the Group
strategy. We will look to make further
comments about the dividend policy
at the ASM in November 2018.
Providing low prices for our
customers, every day
The Board is pleased with the outcome of
the completion of the transition to EDLP
in The Warehouse.
The Warehouse has made the change
to Every Day Low Price (EDLP) with
a 2.5% reduction in sales and a 1.0%
reduction in gross margin. The sales
decline we’re experiencing is in fact
tapering during each quarter of the year,
going from -5.2% in Q1 to -2.6% in Q2 and
-1.2% in H2, giving us confidence that
margins will continue to improve over the
next three years, in line with our plan.
04
The Warehouse Group Limited

JOAN WITHERS
Chair, The Warehouse Group
‘ While there is still more work to
be done, I’m heartened by the
progress that has been made
this year to ensure the Group is
competitive and delivers
sustainable profitability.
We’re on plan, and I’m
satisfied with our progress
as we move closer
towards our goal.’
Annual Report 201805

JOAN WITHERS
Chair, The Warehouse Group
Chair’s report
Joan Withers
‘We still have a long road
ahead of us, but our
confidence is strengthening
as we see encouraging
signs. FY18 has been
about implementing and
accelerating our plan, and
we’re on plan.’
06The Warehouse Group Limited

opportunities, while providing
appropriate levels of oversight.
Investing in our digital future
In addition to delivering our
transformation programme, transitioning
to EDLP, and realising the benefits of
business integration, we are also making
progress on our digital future. We
have invested in digital capability and
systems this year, and have started to
build our omnichannel ecosystem that
will help Kiwis live their lives better.
Continuing our journey
We still have a long road ahead of us,
but our confidence is strengthening as
we see encouraging signs. FY18 has been
about implementing and accelerating
our plan, and we’re on plan.
As previously mentioned, we have
activated incentive payments. This was
in recognition of the performance this
year, the management of significant
downside risk in the move to EDLP, and
the change programme being delivered
to schedule. Incentives are an important
part of attracting and retaining the
high-level talent required to execute our
transformation. Our business operates a
reward structure that goes much deeper
within the organisation than is the case
in many other companies.
I want to especially thank the
employees of The Warehouse Group.
Your contribution in what has been
a big year of change is very much
appreciated. It is your spirit and
dedication to our organisation and
customers that is making the difference.
I would also like to thank my fellow
directors for their dedication to their
responsibilities and for the support they
have given me.
On behalf of the Board, I also want
to thank all our shareholders for your
continued support as we continue to
change for the better – for our company,
and for all New Zealanders.
Joan Withers
Chair
Facing into change
It’s clear that we needed to reshape
The Warehouse Group for the future.
The decline of our recent earnings, the
complexity of our operations, impending
local and global competitive threats and
changing customer expectations have
necessitated radical change, and we are
facing into that change head-on.
We’ve partnered with international
experts to work alongside us as we
transform our business, not to revisit our
strategy but to improve our ability to
execute change and deliver sustainable
bottom-line results.
Together, we co-developed the
framework for our transformation
programme. Led by Chief
Transformation Officer Scott Newton,
200 senior leaders across the business
are rolling up their sleeves and
delivering rapid initiatives to improve
efficiency, reduce complexity and
deliver cost improvement. The Board
is looking forward to realising the
significant benefits of that programme
over the next 24 months and beyond.
Leading us forward
I’m incredibly energised by the
leadership team that Group CEO
Nick Grayston has assembled. They
are extremely driven to achieve
the outcomes we have set, and the
commitment and dedication from the
entire team is among the best I’ve seen.
In FY18 we welcomed three new
members to the Executive Team and
two members to the wider leadership
team. Chief Marketing Officer Jonathan
Waecker and Chief People Officer
Evelyn Ross have joined the Group from
US companies Yahoo and Foot Locker,
respectively. We also made three local
appointments, Scott Newton as Chief
Transformation Officer, Jonathan Oram
as Deputy Chief Financial Officer and
Chris Foord as Chief Logistics Officer.
The Group has faced some criticism
in our recruitment of offshore executive
talent. The fact is, deep omnichannel
retail experience is difficult to find, even
in Australasia. If this business is to be
successful in the face of international
competition, we require people who
have experienced that challenge, and
we are excited about the progress we
are making.
Governance
The Warehouse Group's Board is united
in its support of the direction we are
taking. We are acutely aware of our
role in supporting the transformation
programme and are adjusting our
governance practices to help the
business move faster and stay
focused on our core strategy.
We are conscious of the need to
ensure the skillset around the table
is right for the future direction of the
company and we are in the process of
finalising a director appointment which
will be both complementary to existing
skills and experience and strategically
relevant to the evolution
of the business.
Sir Stephen Tindall has decided
to take a further 12 months leave of
absence from his directorship of The
Warehouse Group due to his current
workload which includes the hosting
of the 2021 America’s Cup in Auckland,
his ongoing work with The Tindall
Foundation and investment vehicle
K1W1 and involvement in some of his
larger investments including Lanzatech
and Rocket Lab. Robbie Tindall will
continue to act as his alternate on
The Warehouse Group board.
We have changed the structure
of some of our committees, reviewed
and clarified some of our policies
and updated our documentation to
ensure that we are fit for purpose for
the challenges ahead. The Corporate
Governance and Nominations
Committee now has responsibility for
Board appointments and selection, and
we have introduced a separate Health,
Safety and Wellbeing Committee,
of which all Directors are members.
Given the competitive landscape
and the period of rapid change
the organisation is undergoing,
the traditional cadence of Board
deliberations may not be suitable.
However, the Board is responding
quickly to business issues and
Annual Report 2018

Our Board (from left to right):
Robbie Tindall, Julia Raue,
Keith Smith, John Journee,
Tony Balfour, Vena Crawley
and Joan Withers (Chair).
The Warehouse Group Limited08

Annual Report 201809

Joan believes The Warehouse
Group is New Zealand’s
greatest retail company with
a fundamentally important
role to play in New Zealand
society. You will often see
Joan in the Red Sheds but as
a self-confessed tech geek,
there is always something
exciting to discover at Noel
Leeming Group, especially
innovations such as Alexa and
Sonos. In her spare time Joan
enjoys horse riding, spending
time with family and creating
fashion garments on her
knitting machine.
Joan Withers
MBA CFinstD
Chair & Independent
Non-Executive Director
INTERNAL
• Audit and Risk Committee
• Disclosure Committee
• Corporate Governance and
Nominations Committee
• People and Remuneration
Committee
• Health, Safety and Wellbeing
Committee
OTHER DIRECTORSHIPS
• Mercury NZ Limited (Chair)
• ANZ NZ Limited
• Louise Perkins Foundation
INTERNAL
• Disclosure Committee (Chair)
• Corporate Governance and
Nominations Committee
• Audit and Risk Committee
(Chair)
• People and Remuneration
Committee
• Health, Safety and Wellbeing
Committee
OTHER DIRECTORSHIPS
• Goodman NZ Limited (Chair)
• Mercury NZ Limited
• Westland Co-Operative Dairy
Company Limited
Keith likes the variety
The Warehouse Group has
to offer and shopping at
The Warehouse and Noel
Leeming stores has proved
very beneficial having just
moved to a new property.
When he is not working we
will find Keith out on the
water enjoying his favourite
pastime of fishing.
Keith Smith
BCom, FCA
Deputy Chair & Independent
Non-Executive Director
Our Board
Our Board
Board bios available at: www.thewarehousegroup.co.nz/about-us/board-directors
Julia’s family shop regularly
at The Warehouse, Noel
Leeming and Torpedo7. Her
youngest daughter loves a
trip to The Warehouse, where
they shop for clothing, gifts,
books and toys. Julia also
shops at Noel Leeming for
technology-related items as
well as whiteware, and they
buy the majority of their
sporting goods at Torpedo7.

When time permits you will
likely find Julia walking,
geocaching, reading or
cooking. As a family, they
love to travel.
Julia Raue
CMinstD, GAICD
Independent
Non-Executive Director
INTERNAL
• Health, Safety and Wellbeing
Committee (Chair)
• Audit and Risk Committee
OTHER DIRECTORSHIPS
• Z Energy Limited and Subsidiaries
• Television New Zealand Limited
• Southern Cross Health Society
• Jade Software
Corporation Limited
• Member, Risk and Audit
Committee of the Treasury
10The Warehouse Group Limited

INTERNAL
• Corporate Governance and
Nominations Committee
• People and Remuneration
Committee
• Health, Safety and Wellbeing
Committee
OTHER DIRECTORSHIPS
• K One W One Limited
• The Tindall Foundation
• Franklin Smith Limited
• Foundation Services Limited
Robbie and his family
find themselves shopping
in one of the Group's
stores on a weekly basis,
The Warehouse being
the store most visited.
Robbie enjoys coaching
water polo, cycling to the
beach with the family
and, when time allows,
playing football or going
to the movies.
With two young kids the
Crawley family are regular
visitors at The Warehouse's
toy section. Gifts for family
and friends are often
created at Warehouse
Stationery – you name it,
if he can personalise it,
Vena is onto it! Once he’s
finished family adventures
with gear from Torpedo7,
Vena loves to hand-write
letters and cards for the
elderly at aged-care homes.
Robbie Tindall
BA, BSc
Non-Executive Director
INTERNAL
• People and Remuneration
Committee (Chair)
• Health, Safety and Wellbeing
Committee
• Corporate Governance and
Nominations Committee
OTHER DIRECTORSHIPS
• Silver Fern Farms Co-operative
Limited
• Les Mills International Limited
• Real Journeys Limited
• Mt Difficulty Wines Limited
With two active teenagers,
Tony's family constantly find
themselves in Noel Leeming
and Torpedo7 on weekends
– be it for some piece of
'essential' technology or
new merino base layer.
Tony’s 13-year-old son
loves the new skate/street-
inspired apparel range at
The Warehouse and would
like to own every piece
given the chance. Tony
loves the outdoors and
can often be seen running,
biking or on the ski field. He
is also on the board of the
local high school.
Vena Crawley
MBA, BA
Non-voting Director, part of the
Future Directors Programme
INTERNAL
• In his role as Future Director,
Vena can be a non-voting
attendee to the various
committees
OTHER DIRECTORSHIPS
• Electricity Retailers Association
of NZ (ERANZ)
• Auckland University of
Technology (AUT) – Advisory
Board Member
INTERNAL
• Audit and Risk Committee
• Health, Safety and Wellbeing
Committee
OTHER DIRECTORSHIPS
• Max Fashions Limited (Chair)
• Vanishing Point Ltd/Holdings
You will often find John
in a Noel Leeming store
as he is a sucker for new
‘tech’ and Noel Leeming
provides reliable expert
advice to help him navigate
the constant stream of
the latest ‘must have’
temptations!

John and his wife are
avid travellers, which
provides ample and varied
opportunities to explore
his other interests of wine,
food, culture and history.
John Journee
BCom, CMinstD, MAICD
Independent
Non-Executive Director
Antony (Tony)
Balfour
BCom
Independent Non-Executive
Director
11Annual Report 2018

CEO’s report
CEO's report
Nick Grayston
The Warehouse Group Limited12

‘We are fortunate to have
the existing benefits of scale
and deep brand affinity
with New Zealanders as a
foundation on which to build
our digital future. How we
leverage these advantages to
best serve our customers is
now our critical opportunity.’
NICK GRAYSTON
CEO, The Warehouse Group
13Annual Report 2018

The year ended 29 July 2018 has
been a challenging one. Major
change is always difficult for an
organisation of our size, but the fact
that we have begun to reposition the
company is a material step forward
for the future of this business.
We began a transformation
programme to accelerate our strategy
and improve our business processes and
management disciplines, and we made
a major change to The Warehouse with
the transition from a Hi-Lo pricing model
to Every Day Low Pricing (EDLP). We
continued to integrate our operations
across the Group and have started
to see the benefits from that change.
We also improved our direct sourcing
capability and expanded our international
operations to help provide better products
at better prices for our customers.
The Warehouse Group remains
a profitable company that creates
significant value for New Zealand.
We are cash generative, a major
employer and a contributor to our
country through our corporate
citizenship activities.
I am proud of the hard work our
people have put in to achieve the
results for FY18, particularly given
the difficult context of the year. I’m
also satisfied that we are completing
the groundwork to overcome
impending competitive challenges.
Competitive landscape
Each year sees new and stronger
competitive challenges to our business
and 2018 is no exception. Amazon arrived
in Australia, offering a broader selection
of categories than in any other launch
country. While their arrival doesn’t yet
appear to have had significant impact,
it would be unwise to underestimate
their long-term potential in Australasia.
However, it’s not just Amazon that we
need to be mindful of, other international
e-commerce players are present in the
New Zealand market, and traditional retail
competitors such as Kmart are expanding
their store footprint in this country,
along with best-in-class international
apparel retailers Zara and H&M.
We are highly focused on being able
to resist those threats successfully. It’s
clear that omnichannel retailing is now
the dominant form. As a legacy retailer
with a comprehensive store footprint,
we have an advantage–but not
automatic success–within an
omnichannel environment.
We are fortunate to have the existing
benefits of scale and deep brand affinity
with New Zealanders as a foundation on
which to build our digital future. How
we leverage these advantages to best
serve our customers is now our critical
opportunity. We must continue to get
better at what we do, putting customer
experience at the forefront of all of our
channels and ensuring we are guided
by more sophisticated data, insights
and capabilities.
Our brand performance
The Warehouse’s transition to EDLP
has gone well and we are pleased that
sales declined less than expected and
customers responded positively to the
clarity of our offer. We saw a 6.6% lift in
unit volume across the year. During this
time, we curated our product range,
simplifying our portfolio of private-label
brands from 136 to 30, and reduced the
number of overall product SKUs by 9.8%.
CEO's report
Nick Grayston
Our way forward
↑Noel Leeming annual
revenue growth in FY18
Warehouse Stationery
No.1 in Back to school
products
Online sales percentage of
total sales. Up 6.6% on last year
8.6%
No.1
7.4%
KEY HIGHLIGHTS
14The Warehouse Group Limited

‘Noel Leeming has had a standout year. Operating
profit increased by 61.8% from the previous year to
$31.2m in FY18’
Revenue for The Warehouse
decreased by 2.5% to $1.7b in FY18
and the retail operating margin reduced
0.6% from 4.8% to 4.2%. The drop in
revenue was anticipated in response
to the transition to EDLP. Although
sales dropped, units sold increased
and we are pleased with the lift in
gross margin from 36.8% to 37.4%.
The grocery and apparel categories
in The Warehouse have performed
particularly well. Sales of affordable
essentials in grocery have increased with
a 14.0% uplift, showing that customers
are responding well to the change.
In apparel, a warm summer led to
excellent performance in seasonal
categories. We experienced significant
gross profit improvements because
of a reduction in clearance.
There is still more work to be done in
terms of refining prices, product range
and assortment. But we have a solid
base to tweak and improve on. We are
also testing some new store formats,
prioritising floor space to improve
profitability and customer experience,
and emphasising the enhanced quality
and value to customers under EDLP.
Most of our private-label products
in The Warehouse are designed by New
Zealand designers at our Store Support
Office in Northcote, Auckland. In FY18
we accelerated our direct sourcing
model to reduce costs, improve the
quality and speed to market of our
products, and to ensure our ethical
sourcing practices are adhered to.
While we continue to operate in
China, India and Bangladesh are
emerging as global powerhouses in
the production of apparel and soft
home goods. We recently expanded
our operations into India. We began
trading there in July 2017 and
officially opened a sourcing office
in New Delhi in February 2018.
A real highlight of FY18 has been
Noel Leeming’s performance. It has
had what can only be described as a
standout year. It continues to benefit
from advantages of scale, both in
terms of volume and store footprint,
and the expertise offered through the
assisted sales model. The business
has delivered revenue growth of
8.6% to $880.5m in FY18. Operating
profit rose by 61.8% to $31.2m in FY18
and operating margins increased
from 2.4% in FY17 to 3.5% in FY18.
The first half set the platform for
the year with solid trading results
across both the retail and commercial
divisions. The commercial division has
performed well with sales up 10.5%;
however, we still see room for growth.
The investment we made in the
Noel Leeming Tech Solutions business
back in FY15 and FY16 is starting to
pay off. Services now make up 2.7%
of all sales, up from 2.5% in FY17, and
we expect this growth to continue.
This was a very purposeful strategy
that has been well-executed.
In July we announced the purchase
of the key assets of the Appliance
Shed, offering a larger store footprint
to provide clearance goods and to
help meet the customer demand
NICK GRAYSTON
CEO, The Warehouse Group
seen at our expanded Penrose
clearance store. Three Appliance
Shed sites in Auckland will transition
to Noel Leeming Clearance Centres
and a fourth to a Torpedo7 store.
In contrast, Warehouse Stationery
has had a poor year by its own high
standards. The weaker result for FY18
was due to internal systems integration
issues and an industry segment that
is facing challenges as a result of
changes in customer buying behaviour.
Revenue for Warehouse Stationery
fell 5.2% from the previous year
to $263.8m in FY18. The business
experienced a decrease in operating
profit from $15.7m to $10.6m in
FY18, with the corresponding
operating margins reducing
from 5.7% to 4.0% in FY18.
The first half of the year was
particularly challenging and saw
a 7.1% decline in sales on H1 FY17.
The operational integration of The
Warehouse and Warehouse Stationery
resulted in some internal systems and
process challenges that impacted
the availability of products in store,
and significant time and resource
was spent rectifying these issues.
However, this was completed in time
for a successful Back to School period
which saw Warehouse Stationery retain
its position as number one in market
share and customer service. As we
continued the year we reduced our
sales deficit to 5.3% decline in Q4.
While sales declined, margin
improved–particularly in Q4,
by 1.4%. This demonstrates that
profitability for the business is
in line with our expectations.
We are acutely aware of challenges in
the stationery market globally, including
15Annual Report 2018

on our core business. It has a been a
smooth transition with negligible impact
on our customers, and we are fortunate
to have good partners in Finance
Now and SBS Bank. The nature of the
financial services business meant that
it required significant operating capital
and the decision to divest has given
us capacity to make the investments
that support our strategy. Our planned
investments can be funded through our
existing capital envelope.
Leveraging our scale
as a group
We are now able to capitalise on our
scale as a group and reduce duplication
with one Information Technology,
People Support, Finance, Logistics and
Marketing team. We are already realising
the benefits of this new model. For
example, in FY18 and through FY19 we
will make a significant investment in a
new Warehouse Management System
that will improve our fulfilment and
delivery capability across all brands.
This will enable efficiencies that will
save around $5.4m per year from FY20.
We appointed a single media buyer
to serve all brands in the Group,
replacing seven media and planning
agency relationships. Similarly, we
have appointed one domestic logistics
partner in Toll New Zealand, which will
be providing all store delivery services
across all the brands from FY19.
Our transformation
Earlier this year we started our group-
wide transformation programme
focused on fixing the retail
fundamentals and improving our
financial performance. It began with
the acceleration of the decline in
heritage categories such as paper and
manual-based office supplies, and the
need to reposition the business ahead
of structural changes in the industry.
We have been through a specific
exercise to address both category
and systems issues and develop a
strategy for the future. This includes
refocusing dedicated resource to
the stationery business and a plan to
continue to grow shoulder categories
and the existing B2B market.
Torpedo7 had a disappointing year
also but for different reasons. While
revenue increased 3.6% to $163.4m,
it made an operating loss of $1.4m
because of ongoing challenges with
a sub-scale operation and internal
disruption connected with relocating
parts of the business operations.
This year we recorded an
impairment of the goodwill
relating to Torpedo7 of $25.6m.
The integration of Torpedo7 into
Noel Leeming management showed
us the extent of the work we need to
do to scale up from a niche offering
to becoming a serious retailer. We
recognise that developing capability,
rebuilding processes and addressing
stock issues will take time.
While it has been a difficult year
for Torpedo7, it has also been a good
opportunity to reset the foundation
for the business. In FY19 we have
confirmed the roll out of four additional
Torpedo7 stores, bringing the total
number of stores to 18, with additional
stores in the pipeline. Torpedo7 stores
are relatively profit-neutral in the first
year, so the opportunity is significant,
but it will take time to achieve scale.

FY19 will be focused on establishing
brand clarity, getting our inventory
right and scaling the business,
both physically and online, and
we expect to be operating from
a strong foundation by FY20.
Torpedo7 has a secondary brand
in No. 1 Fitness, which currently
has one store in Christchurch.
In FY19 we will integrate No. 1
Fitness into Torpedo7 and retire
the brand to reduce complexity.
Group online sales were $221.1m,
up 6.6% compared to the same period
last year. Online as a percentage of total
sales finished the year at 7.4% compared
to 7.0% in the same period in FY17.
Investing in our digital future
While we are focused on fixing the
retail fundamentals through our
transformation programme as our
priority, we are also investing in our
digital future to get ahead of the curve.
An efficient and frictionless e-commerce
offering is no longer a differentiator.
In FY18 we boosted our digital
capability and established a world-
class team, and did a considerable
amount of work to bring our core
IT infrastructure up to standard.
In FY19 we will continue to invest
in building a competent fulfilment
capability and improving our
infrastructure, systems and supply
chain and distribution processes,
setting the foundation for our future.
Focusing on our core business
In FY18 we completed the transition
of The Warehouse Group Financial
Services division to Finance Now,
enabling us to free up capital and focus
‘The commitment and dedication of the executive
leadership team is among the best I've seen.’
JOAN WITHERS
Chair, The Warehouse Group
CEO's report
Nick Grayston
16
The Warehouse Group Limited

The Executive Team
Left to right:
Tania Benyon, CEO Group Sourcing
Support; Pejman Okhovat, CEO
The Warehouse and Warehouse Stationery;
Mark Yeoman, Chief Operating Officer
and Chief Financial Officer;
Nick Grayston, Group Chief Executive Officer;
Tim Edwards, CEO Noel Leeming and
Torpedo7 Group; Scott Newton,
Chief Transformation Officer; Evelyn Ross,
Chief People Officer; Jonathan Waecker,
Chief Marketing Officer.
an independent assessment of the
Group, which helped to quantify the
opportunity for focused performance
improvement. It was then followed by
a process of idea generation with input
across the entire business. Ideas were
then distilled to 250 initiatives, which
are now being implemented by our own
teams. Although it’s early days, we’re
already seeing success with a number
of initiatives delivering value, increased
engagement and collaboration across
the Group.
While our transformation has
components related to technology
investment, it is mostly about
fixing our business processes and
improving management disciplines.
We share more information about
our transformation on pages 24-27.
We’re on for the future
Ultimately, retail is still about two things
– people and product. Having the right
product and serving people how they
want to be served, whether that’s in
a store or on a mobile device is key,
together with the right customer service.
We’re working hard on improving these
elements so we can deliver to our
purpose of helping Kiwis live better
every day.
FY18 has been a huge year of
change for our company, and while
there is still more work to be done, I’m
pleased that we’re on plan. We have
entered FY19 with momentum behind
our strategy to deliver a strong and
sustainable future for our organisation.
This is due to the efforts of our people
and I want to thank each one of our
team members for their contribution.
Together, we’re writing this story for
the future of The Warehouse Group.



Nick Grayston
Group Chief Executive Officer
17Annual Report 2018

Sales by brand
The WarehouseNoel LeemingWarehouse StationeryTorpedo7
56.8% 29.1% 8.7% 5.4%
18The Warehouse Group Limited

↑ 0.5%
Total sales
$3.0b
Gross profit
↑ 2.0%
$991.2m
NPAT
Dividend
↑ 12.0%
no change↓ 46.6%↑ 3.0%
↑ 6.6%
↓25.6%
$22.9m
16cps
EBITGroup transactions
Online sales % of total sales
Net debt
$57.3m63m
7.4%
$162.3m
SKU reduction from EDLP
9.8%$5.0m
Moved to EDLP
(Every Day Low
Prices) in Red
reduction in Marketing
spend from EDLP
growth in Noel Leeming Services
of New Zealanders shop with a
Group brand at least once a year
new Group
stores opened
in FY18
Plus 3 Blue
stores into Red
Noel Leeming
Torpedo7
17%
80%
6
2
3
Financial highlights
Other highlights
The Warehouse
1
19Annual Report 201819Annual Report 2018

Our strategy
20The Warehouse Group Limited

Helping Kiwis live better
every day
Fixing the
retail fundamentals
Invest in
the digital future
Transformation
Technology and Culture
Shared values
Here for goodCreate the wayBe the experienceTake the lead
OUR STRATEGY
OUR ENABLERS
21Annual Report 2018

BRAND
POSITIONING
BRAND
HIGHLIGHTS
Our evolution
1982
First The Warehouse
store opens
1991
First Warehouse
Stationery store
opens
Busiest
period is
Back to School
Where everyone
gets a bargain,
every day
Work, Study,
Create, Connect
FY18 REVENUE
SPLIT BY BRAND
$263.8m
$1.7b
ON AVERAGE, 1.5M
CUSTOMERS A WEEK
General merchandise,
apparel, homeware, garden,
electronics and gaming
ON AVERAGE, 230,000
CUSTOMERS A WEEK
Office products, stationery
and technology
1996
First purpose
built distribution
centre opens
1994
NZX: Listed on
the NZ Stock
Exchange
Over
7,000 team
members
93 stores with annual
sales of 1.7b Over
500,000m
2
of retail
space and over
25,000 SKUs
We employ
approximately
1,000 team
members
Busiest day
of the year is
Christmas Eve
70 stores with annual
sales of $263.8m Over
71,000m
2
of retail
space housing
9,000 SKUs
Our group profile
TIMELINE
The Warehouse Group Limited22

2004
Shanghai
Representative
Office (SRO)
is set up
Technology and appliancesOutdoor adventure gear
and fitness gear
2009
The Warehouse
online shopping
launched
2013
The Warehouse Group
acquires Noel Leeming
Group and Torpedo7
Group
2014
The Warehouse
launches its first
mobile shopping app
2017
First Warehouse
Stationery Ltd store
opened within
The Warehouse store
2017
India Sourcing
Office opened
2014
The Warehouse Group
acquires Schooltex
and R&R Sport
Busiest periods
are winter and
summer
The authority in appliances,
technology and services
for retail and commercial
customers
See you out there
74 stores with annual
sales of $880.5m
Over 76,000m
2
of
retail space housing
4,100 SKUs
14 stores over
19,000m
2
and
online retails for
No.1 Fitness and
1-day
Over 1,600
team members
We employ
approximately 400
team members
ON AVERAGE, 279,000
CUSTOMERS A WEEK
ON AVERAGE, 14,000
CUSTOMERS A WEEK
$163.4m$880.5m
Busiest period is
Boxing Day
Annual Report 201823

Scott joined The Warehouse Group in
February 2018. He has an extensive
track record in driving transformational
change across several New Zealand
and global businesses.
What’s the transformation
overview?
Our transformation started in February
2017 when we made the decision to
move to a shared services model across
the Group and merge the operations
of The Warehouse and Warehouse
Stationery, and Noel Leeming with
Torpedo7. This was quickly followed by
our adoption of an Every Day Low Price
(EDLP) pricing strategy in our Red
Sheds, a significant change for the
business and our customers.
To improve our ability to execute
change across the business, and
support our multi-year transformation,
we engaged external transformation
partners in late 2017. Our
transformation partners performed
an independent assessment of
the potential of the Group, and
quantified the opportunity for focused
performance improvement. Then,
we involved more than 200 staff
from across the Group in a ten-week
ideation process to develop initiatives
that would build on the changes
which were already in flight. From
June 2018, our transformation has
focused on implementation. We’ve
started to drive the delivery of the
plans that we committed to.
What are we focused on?
Performance wise we are focused on
lifting Group EBIT from 3.6% to 7.0%.
To achieve this growth in earnings,
we have created over 250 detailed
initiatives which are being actively
worked on across 12 workstreams.
We are also focused on incorporating
an ‘owner’s mindset’, having a high-
performance culture and building
capability in our people to ensure
that these changes are sustainable.
We’re six months into our transformation so
we sat down with Scott Newton, our Chief
Transformation Officer, to discuss what
we’ve achieved so far and what we’re
looking forward to.
Our transformation
Our transformation
TIMELINE
JANUARYFEBRUARY
Organisational
Health survey
MARCH
Creation of 8
functional and 4
brand workstreams
Independent
Assessment
24The Warehouse Group Limited

Our transformation has a good
balance between both growth and cost
focused initiatives. Growth initiatives
typically take longer for the benefits
to ramp-up, whereas, cost derived
initiates provide the ability to unlock
value much faster.
Collectively, we have committed
to a plan for what we can realise
in incremental earnings going into
FY20. Internally we refer to this as
our ‘bankable plan’. This plan was
unanimously supported and signed
off by our Senior Executive Team.
What are the key areas of work
and how did they come about?
Our transformation is focused on
fixing the retail fundamentals. All
areas of the business are in scope for
performance improvement. During the
independent assessment conducted
by our transformation partners, and
in our planning sessions, we looked at
the key value drivers of our business
and formed 12 workstreams–eight
of these are functional and four are
brand orientated.
The eight functional workstreams
are grouped into key areas. One
key area is ‘trade’, which includes
the customer-facing areas such as
store performance, merchandise,
and logistics. Another key area is
‘non-trade’, which focuses on central
procurement and capital. Both our
trade and non-trade functions are
supported by ‘central’ functions,
which incorporates our people-
support functional area. The central
functions workstream looks to
optimise organisational design across
The Warehouse Group and assesses
whether we have the right people
with the right tools, skills and
capabilities to support the delivery
of our transformation. Supporting
both trade and non-trade areas are
our ‘enabling’ workstreams. These
workstreams include information
systems and culture. Both the
information systems and culture
workstreams are embedded within
all the areas of our transformation.
What’s the most important
aspect of the transformation?
The most important aspect of the
transformation is the how, or the culture
piece. We are focused on embedding a
change in mindset and way of working
so that we think and act differently. It
is also important for us to ensure that
the change is sustainable. We recently
launched our new group values of
being ‘on’. We’re on for New Zealand,
on for our customers, employees,
shareholders and our communities.
These new group values unify our
APRILMAYJUNE
ideas generated
and distilled
initiatives actively
worked
Improving Group EBITBuilding a sustainable and
high-performance culture
250+1,000+↑EBITCulture
Programme setup
• Cadence established
• Workstreams
• Leads identified
• Initiative owners
1,000+ ideas
generated across
the Group
Commitment to
implement more
than 250 initiatives
Ideas assessed
through risk,
culture and
information
systems lens
Expo – sharing
the plan with our
wider teams
Transformation
Planning
Implementation
Kick-off
25Annual Report 2018

individual brand values and allow
us to speak the same language.
What are the key challenges?
Speed of decision-making can slow
progress and frustrate initiative
owners. We have established a weekly
cadence around our workstreams
and this provides the opportunity for
workstream leads and initiative owners
to ask for the support needed.
There can be workload tension
balancing our ‘day job’ against our
transformation initiatives. This is
typical during the beginning of a
transformation and can take more
than six months before the two come
together as one set of priorities.
Capability can be a challenge when
embarking on major transformations.
Now that we have developed detailed
plans with clear milestones, KPIs and
benefits for each initiative, we can
track progress on a weekly basis. And
because of these plans, we have an
opportunity to address emerging
capability gaps.
We have created a programme for
our people to support their ‘ability
to execute’ (A2E). A2E is a two-day
programme for our Store Support
Office, Regional Managers and Store
Managers. The course focuses on
developing skills in areas such as
influencing, having courageous
conversations and providing feedback.
We are also investing in building
capability in specific areas such
as contract negotiation, pricing
optimisation, and data analytics. Here,
we are drawing on the global expertise
of our transformation partners.
What are you looking forward
to in the next six months?
Ensuring that the initiatives that we
have developed start delivering the
benefits that they promised; supporting
our workstream leads and initiative
owners to think bigger, faster; and
actively problem solving with
the team to drive value creation.
I see my role as the 'agitator',
to face into what people don’t want
to talk about and support delivery
but also look to accelerate our plans.
I am also looking forward to seeing
the business adopt the ‘owner's
mindset’ and see this come alive across
the business. The owner's mindset
means being truly accountable,
recognising that delivering results to
our bottom line is the ultimate measure
of success, and that the cost of delay is
real. We teach how to adopt an owner’s
mindset in our A2E course and to date,
we have around 1,500 team members
participating in the course.
What is the mood within the
Transformation Office?
Cautious, but happy with the
progress to date. We have great
partners that, like us, truly care about
making kiwi’s lives better and are
helping to ensure the longevity of our
core business.
We have all the ingredients that
we need to successfully transform
and we’re starting to see the ‘unlock’
happening in the business. Typically,
it takes about six months into
implementation to see the benefits
materialise. Once the benefits are
visible and celebrated, the progress
in and of itself builds momentum and
people start to see the transformation
as a way of getting things done much
faster than they could previously.
Why should I believe in this
transformation?
Our transformation isn’t about finding
a magic ‘single fix’ solution. It is about
lifting our performance around basic
retail disciplines, with our customers at
Our transformation
Negotiation Factory
Workshops
JULY
New group values
launched
TRANSFORMATION
ONGOING
(2 YEARS)
Ability to Execute
(A2E) (high-
performance and
capability training
programme)
Store and
Distribution Centre
expos
↑
JULY
Ideas Bot launched
(Group-wide ideas
channel where
everyone is able
to submit ideas)
26The Warehouse Group Limited

the centre of everything we do.
I can’t make you believe in it, but I
can tell you why I believe in it. Having
seen The Warehouse open in 1982,
it’s exciting to see what it’s become
over the last 36 years. The growth
has transitioned from explosive to
incremental and now we have reached
critical mass across our brands. It's
Our transformation workstreams
Merchandise
Central functions
Logistics
Capital
Information system
Culture
time for us to mature and begin to
realise the benefits of scale, efficiency
and sustainable growth. That’s why I
believe in the transformation and see
the potential that's in front of us.
There is no more interesting time
to be in retail. We have an opportunity
where the ground is going to continue
to shift significantly over the next
decade in this industry and I want to
be part of helping shape the future
and ensuring that the Group’s legacy
continues.
I want to be part of this chapter and
the next chapter of what it means to be
The Warehouse Group.
Store performance
Non-trade spend
27Annual Report 2018

This year The Warehouse moved to
Every Day Low Prices (EDLP) and away
from a Hi-Lo pricing model. The new
retail landscape of mobile commerce,
big data and the rise of omnichannel
retailing has meaningfully changed the
environment in which we do business
and requires an overhaul of the way
in which we operate.
EDLP is a stronger and more
future-focused retail pricing strategy
in the digital era, and it allows us to
remain competitive in a continuously
changing environment. We observed
that globally retailers trading under
a Hi-Lo model were failing in the
face of developing online pure play
competition from the likes of Amazon,
eBay and Alibaba. With greater
price and information transparency,
consumers all over the world are
becoming more informed on price and
Our move
to EDLP
range, and know what a genuine
discount looks like.
The Warehouse’s move to EDLP
was, in part, a customer-driven
change intended to resolve questions
over price accuracy, which was
a major customer pain point. The
move has allowed The Warehouse to
be more transparent, have greater
clarity in offer, as well as provide
dynamic and personalised pricing
and promotions. It streamlines our
business to become even more
honest with our customers.
Unlike Hi-Lo, EDLP does not use
frequent promotional activity to
drive sales. This typically results
in a reduction in marketing spend
and store labour because having
fewer promotions translates to less
advertising and less manual
re-handling of goods.
We saw a positive customer
response as we entered our first
Christmas and summer under EDLP.
Most notably, our toy category was
a top performer, breaking all its own
records in sales. More recently, the Big
Toy Month event in stores performed
exceptionally well also, with the average
FROM HI-LO TO EDLP
SALES3.1%
8.5%
4.9%
4.9%
3.2%
UNITS
AVERAGE SELLING PRICE
GROSS PROFIT
STOCK TURN
basket of toys up 6.0% driven by a
higher average selling price.
It can be expensive for retailers to
switch pricing strategies; however, we
are happy with our performance to
date. Based on what we've seen from
retailers offshore, there was a real
risk of experiencing a material sales
decline and the transition negatively
impacting our financial performance.
As we moved into the world of
EDLP we expected a sales decline,
due to a reduction in average selling
price but knowing this would be
offset by an increase in volume sold.
Our plan was to improve margin in
year one with the goal to achieve
significantly better margins over the
next three.
In FY18, sales in The Warehouse
were down 2.5% and gross margin
down 1.0%. While we experienced
some impact from the clearance of
goods related to range curation, we
were successful in mitigating losses
through timing of promotions and
optimising clearance prices.
One thing we were particularly
focused on maintaining was our price
perception during the transition to
The big reset
↑
↑
↑
↑
↓
EDLP case study
A case study on Childrenswear
28The Warehouse Group Limited

EDLP. Based on customer feedback we
believe we are still the strongest in the
market on price perception. Since price
is held constant rather than relying on
promotional activity to drive foot traffic,
a challenge under EDLP is generating
and maintaining high foot traffic. Our
foot traffic continues to be strong in
stores and we observed a 2.2% increase
in transactions.
Aligned to a EDLP pricing strategy
is the need to focus on product range,
design and availability to hit the value-
for-money sweet spot. Moving to direct
sourcing has been part of the success
of EDLP as we change how we source
and what we control. We now supply
over two-thirds of products sold in
The Warehouse through our private-
label programme with many designed
in New Zealand. We have increased our
capability in this area and will continue
to make investment into the way we
design, plan and source.
Volumes handledFull priceClearance
HI-LO
EDLP
6.4m
6.9m
↑
WAREHOUSING
SALES CYCLESALES CYCLEOTHER SAVINGS
UNDER EDLP
Labour savings
(The Warehouse)
Marketing savings
(The Warehouse)
Reduction in
re-pricing for
promotions
Reduction in
promotional
mailers and
advertising
spend
In June 2017 last year we held a
suppliers’ conference to keep our
partners informed, and we met with
suppliers individually to answer
questions regarding our shift to EDLP.
By Christmas, 98.0% of our supplier
network transitioned to our new way
of working.
Another change that EDLP brings
is the impact on trading patterns.
We’re getting used to the new trading
cycle and experienced nominal
variance against our plan compared
with FY17. Overall, our weekly volumes
are higher under EDLP than Hi-Lo.
In total, volumes increased by
7.9%, which was helped through
an increase in average basket size
of 5.7%.
Under EDLP we also improved our
level of productivity. We achieved
store labour savings by reducing
the level of re-pricing needed for
promotions. Approximate labour
92.3%7.7%
1.6
m
5.0m
93.5%
↑
6.5%
↓
savings through greater productivity
under EDLP is $1.6m. Looking forward,
we expect to see further savings
on store labour as we did incur
one-off re-pricing costs as a result
of our transition. We also realised
$5.0m cost savings in marketing
due to a reduction in promotional
mailers. During the post-EDLP range
reduction period, stock was cleared
at higher margins than historically,
and the overall SKU count reduced
by 9.8%. From an operations
perspective, we’ve adjusted well to
the significantly higher volumes going
through our Distribution Centres.
We experienced a 9.0% unit increase
in volumes handled.
This year has been a foundation
year for The Warehouse to make the
changes required to achieve long-term
growth. Our focus for FY19 is to further
refine our operating model and continue
delivering the benefits of EDLP.
Our foot traffic continues to be strong in stores
and we observed a 2.2% increase in transactions.
29Annual Report 2018

Introduction
Integrated reporting
This year we have prepared our
report using the integrated reporting
framework, as a signal of the direction
that we are headed as we transform
the business for the future.
Value for The Warehouse Group is
more than numbers on a spreadsheet.
That’s why we like the idea of integrated
reporting, as it shows that there are
more dimensions to value that are
important to us and our stakeholders.
We have not moved formally into the
integrated reporting world; first we are
embedding the principles of integrated
thinking through the business so that
the reporting step comes as a natural
extension of what we do.
How we create value
The principal business of The
Warehouse Group is retailing. While
most of our business is product related,
there is a rapidly-growing services
component of our offer, primarily around
the technology offerings through our
Warehouse Stationery
and our Noel Leeming businesses.
From a market segment perspective,
our business is principally aimed at
consumers; however, Warehouse
Stationery has a strong presence in
the small-to-medium-sized business
segment, and our Noel Leeming
business has a sizeable commercial
customer portfolio.
In core retail, we add value through
providing customers with access,
choice, quality, value for money and
services to ensure that our brands and
channels are preferred by customers.
The process of adding value starts
with understanding our market. We
pride ourselves on the insights and
knowledge that the brands have
built in understanding our customers
within the local market. We believe this
understanding helps us to create value
in targeting the product and market fit,
and reduces inventory risk inherent in
the business.
The first step where this is realised
is product design, where we influence
the product and market fit by design
considerations which include materials,
aesthetic appeal, durability, cost,
colour, size, form and function. Our
deep understanding of Kiwis and
this market, reinforced through data
analytics and insights, is helping us to
make our products more relevant and
on-trend within our goal of making the
desirable affordable and, importantly,
the affordable desirable.
Next we focus on sourcing the
product. Increasingly we are moving to
a direct sourcing model where possible.
For some of our businesses such as
Noel Leeming that source famous
brands, this step is about building
trust, confidence and strength with
our key suppliers, and ensuring that we
are the preferred channel to represent
their global brands.
For other businesses, we move to
a direct sourcing model whereby we
contract directly with manufacturers
in the country of origin, which involves
ethical sourcing standards, quality
assurance and consolidation of
volumes to drive better pricing. These
relationships are not transactional: they
are partnerships designed to ensure
that customers can be confident in
the goods they are buying from us.
We next add value in how we bring
the product to market, through our
logistics and distribution activities, to
ensure that the product gets to the
right channels in depth and range, on
time and in good condition at lowest
Towards
integrated
reporting
Measuring
what matters
30The Warehouse Group Limited

cost. Managing our environmental
footprint is an important part of our
consideration as we transport product,
handle waste recycling and manage
product return journeys. We are
responsive to changing market demand
by being able to control and flex how
we distribute product from central
storage to customer-facing channels.
The Warehouse Group has a long
history of supporting New Zealand
communities. We are here for good and
giving back to our communities is a
critical element of how we create value.
The quality, location, convenience
and experience of all our channels form
a critical element in adding value also.
We are present in the locations where
our customers are, in key catchment
areas with physical stores that present
an enjoyable and friendly customer
experience. We show our product
expertise and care for our customers
over the long term, not just in that
moment of a single store visit.
Our physical presence, product
expertise and care for our customers
are all critical components of what we
think makes The Warehouse Group
special for our customers. This can be
seen every day, and especially where
customers are making large-value
purchase decisions, we want to
meet them with sound advice and
great service in the decision-making
process and in the after-sales
experience as well.
Outputs
and Outcomes
Our key to integrated reporting
Our value creation
Manufactured capital
Stakeholder capital
Intellectual capital
Environmental capital
Human capital
Financial capital
Inputs
Goods and services
Understanding our market
Sourcing
Data and analytics
Range curation and assortment
Solving customers' problems
Accessibility
Customer experience
Being where the customer is and
when customers want to shop
Frictionless experience
Donations
Trust
Minimising our impact
on the environment
Building eco systems
Our networks
Our relationships
Our expertise
Our environment
Our people
Our financial capital
Convenience
Choice
Quality
Value for money
Design
Partnerships
Ethical sourcing
Logistics and distribution
Corporate citizenship
Community outreach and give-back
Making the desirable affordable
and the affordable desirable
31Annual Report 2018
We add value through providing
convenience, and making customers’
experience enjoyable, hassle-free and
rewarding. This might be through a
digital channel providing the ultimate in
convenience, or through our extended
trading hours so we can be there when
our customers want to shop.
Value
Creation

The Warehouse Group is the largest
general merchandise retailer in New
Zealand and 80% of New Zealanders
shop with a Group brand at least once
a year. One of our key competitive
advantages is our capacity to serve
and reach our customers through our
store footprint and Distribution Centres,
online and via phone support.
Historically, one avenue for growth
has been to expand the store network,
and open new stores. Aside from some
Torpedo7 opportunities as we seek to
build scale for that business, with 251
stores across New Zealand we are at
‘peak footprint’ in terms of retail space
per square metre. We will continue
to reposition and adapt our stores to
match changing population distribution
and customer needs, and our focus has
shifted to repurposing and improving
the utilisation of existing space to
provide better customer experiences
and profit per square metre.
A key strategic challenge for the
Group is to drive growth in ways other
than through store expansion, focusing
our store thinking around customer
experience and channel optimisation.
In future, as we move to full
integrated reporting, we will report
on our focus areas to demonstrate
progress. For example, we will report
on productivity of the footprint through
Gross Margin Return on Footage
(GMROF) and flexibility of portfolio
and lease tenure.
Serving our
customers
In FY19 we expect our distribution
costs per unit to reduce slightly
through process improvement, with
further reductions over the longer term
by targeted technology investments.
Blue into Red: Trialling
Warehouse Stationery stores
within The Warehouse
In FY18 we expanded our trial of
Warehouse Stationery stores within
The Warehouse stores to test the
concept of combining two brands
under one roof, at Glenfield, Fraser
Cove in Tauranga and in Rolleston,
Canterbury.
This integration could provide
greater convenience for customers,
reduce costs, and potentially free
up sites that could be repurposed
for Torpedo7 without adding to the
Group’s overall occupancy costs.
The results are encouraging so far and
we intend to further test the concept
with more sites in FY19, including
specifically testing dedicated business-
to-business points of presence.
Torpedo7 expansion
When we acquired Torpedo7 and the
businesses that now make up the
Torpedo7 Group in 2013 and 2014,
it was solely an online business that
we merged with R&R Sport and No. 1
Fitness stores. Our challenge now is to
turn Torpedo7 into a true omni channel
retailer that helps New Zealanders get
the most out of the outdoors, and that
means increasing scale.
In August 2018 the Group opened
a Torpedo7 store in Palmerston North,
and we have confirmed the roll out of
a further three new Torpedo7 stores
in the next three months. In FY17 we
Manufactured Capital
Our networks
Our networks
32The Warehouse Group Limited

Manufactured Capital
Our networks
33
Annual Report 2018

opened our Auckland flagship Torpedo7
store in Westgate, and a large-format
store in Albany, enhancing our omni
channel capability. We know from our
online business that there is existing
demand in these catchment areas.
Opportunities to occupy Warehouse
Stationery sites that are planned to be
vacated are being assessed as well.
Click and Collect
All 251 of the Group’s stores offer a
Click and Collect service, in addition to
delivery to an individual’s home or work
address. In FY18 we introduced several
self-service Click and Collect lockers,
where customers can access their
goods without requiring assistance.
The Warehouse currently has two
stores with Click and Collect lockers
(Westgate and Albany) and Warehouse
Stationery has Click and Collect
lockers at Wairau Park. Noel Leeming
has a street-facing Click and Collect
locker service in Takapuna, accessible
out of hours when the store is closed.
Feedback from customers has been
positive and we will roll out further
lockers in FY19.
Self-service checkouts
Self-service checkouts give customers
the option to do their own quick,
convenient transaction, particularly
at busy times. In FY18 we introduced
self-service checkouts to ten stores
in The Warehouse, and in Warehouse
Stationery at Wairau Park as a trial.
Customers have told us they still
want the option of a regular checkout
experience, and we will maintain this
option providing that need remains.
The self-service checkouts now
perform an average of around
50% of transactions in the ten
The Warehouse stores where they
have been deployed.
Logistics and fulfilment
Stores and online deliveries are
supported by a national distribution
network. Our Auckland Distribution
Centre is made up of three facilities,
and we also have Distribution Centres
in Christchurch and Hamilton, and an
additional network of seven smaller
hubs supporting Noel Leeming Stores
throughout New Zealand.
The Group is in the process of
rectifying historical under-investment
in logistics and fulfilment, and we
are executing a plan to turn what is
currently a weakness into a strategic
advantage.
We are consolidating and integrating
our distribution assets across the
brands, and engaging strategic
partners to transport our goods more
efficiently and cost-effectively. This is
supported by investment in technology,
to improve processes, customer
experience, efficiency and accuracy,
and to increase capacity.
Technology investments will
change how we manage and flow our
products and increase our throughput
capacity as well. This will also allow
us to achieve a more efficient balance
Manufactured Capital
Our networks
In FY18 we did
a considerable
amount of work
to bring our core
infrastructure
up to standard,
enhancing
security and
interoperability,
and improving
the resilience of
our networks.
34The Warehouse Group Limited

v
between centralised and localised
fulfilment, providing enhanced visibility,
accuracy and productivity. In addition,
new systems provide the foundation
to deploy software that will provide
greater efficiencies in the future.
This is a key project in competing
online against global competition.
Internationally, we selected a new
freight-forwarding partner in Mondiale
in FY18. The global consolidation of
shipping lines has resulted in reduced
capacity and increased competition
and we continue to monitor shipping
costs and fuel prices closely.
We have also realised some
operational cost efficiencies by
appointing Toll New Zealand as our
domestic transport partner throughout
the Group. Toll will provide all store
delivery services across all brands
from FY19.
Modernising our technology
infrastructure
In FY18 we did a considerable
amount of work to bring our
core IT infrastructure up to
standard, enhancing security and
interoperability, and improving the
resilience of our networks. We have
strengthened our core systems
and invested in digital capability
to increase our responsiveness to
customer needs, and improved risk
management, disaster recovery and
real-time reporting.
However, we still have work to
do, particularly in the Noel Leeming
and Torpedo7 businesses, where
merchandise and planning systems
require investment. Our IT service
delivery capability also needs
further work, as we move more fully
into an agile-based plan-build-
operate model.
One of the first steps in
consolidating our technology
infrastructure has been to move our
core mission-critical IT systems off
premises, and onto IBM Cloud in
New Zealand. These systems include
customer-facing apps, e-commerce
sites, point-of-sale systems,
inventory and financial systems.
We have consolidated around
Salesforce as our key customer
relationship management tool, and
started migrating our call centres to
PureCloud, which has helped us to
amalgamate customer service across
brands and provided a single view of
customer contact.
The Group has introduced
technology initiatives to improve
productivity too. In the Finance area,
we have deployed Robotic Process
Automation to automate many
manual tasks. We have used tools that
utilise machine learning to clean our
customer data, removing duplications
and errors to create a master
customer database. Accurate and
reliable customer data enables us to
deliver greater personalisation to our
customers and improves measurement
on the effectiveness of our customer
engagement and marketing.
of New Zealanders shop
with a Group brand at least
once a year
Four new
Torpedo7 stores
confirmed to
open in the next
three months
Customers visit our
stores every week
Ten of
The Warehouse
stores offer self-
service checkouts
for quick, easy
transactions
of New Zealanders live within
30 minutes of one of our stores
80%
90%
2m
All 251 Group
stores offer Click
and Collect
KEY HIGHLIGHTS
35Annual Report 2018

With 251 physical stores, five online
stores, an app for The Warehouse
and millions of customers across
New Zealand, The Warehouse Group’s
capacity to serve customers through
our distribution and logistics systems
and networks is a critical part of our
operations.
During FY18 and FY19 the Group
is investing in a new best-in-class
Warehouse Management System
(WMS) provided by Manhattan
Associates, which will significantly
improve processes in our Distribution
and Fulfilment Centres and transport
Investing in a world-class
Warehouse Management System
We’re changing the game
Case Study
Manufactured Capital
Our networks - Case Study
36
The Warehouse Group Limited

Far left:
The Warehouse
Group Distribution
Centre team members
Solomona Kapeteni
and Siaosi Lui.

Left: Distribution
Centre team member
Semi Tofilau.
operations, and enable efficiencies
that will save around $5.4m (EBITDA)
from FY20.
The new Manhattan Associates'
WMS has been ranked as the leading
Warehouse Management System for
the past ten years by Gartner in their
annual Magic Quadrant for Warehouse
Management Systems, and will replace
the existing system, which is over 30
years old.
The new WMS has three main
benefits for our Distribution Centres
(DCs). Firstly, it allows greater visibility
of all the different departments and
tasks in the DCs. Secondly, the new
WMS allows dynamic allocation
of orders. The third benefit is that the
WMS makes the decisions based on
real-time information and data, using
interleaving to assign tasks to the
closest individual, therefore improving
productivity and efficiency.
The Fulfilment Centre (FC) is
located within our Distribution Centre
complex and is dedicated to fulfilling
online customer orders. We are now
able to introduce a WMS into the FC,
replacing the existing manual-based
system and dramatically improving
efficiency and customer experience.
37Annual Report 2018

Technology is not only important as
a key enabler of our retail business,
it is also critical as a channel to market.
We’ve been operating in New Zealand
for 36 years, and we have deep specialist
knowledge and expertise in the retail
sector. However, there is variability
across the Group in how we do things,
ranging from world-class services in our
Noel Leeming Tech Solutions offering,
to areas that need significant process
improvement, such as our merchandise
planning systems in Torpedo7.
One of our core strategic plans is
to fix the retail fundamentals, taking
best practice and making it consistent
across the organisation.
The Centre of Excellence model
allows us to share expertise across the
Group, leveraging knowledge through
process improvement. The benefits of
this approach include being able to
simplify and standardise our business
processes, reduce the variability of
performance throughout the Group,
and leverage the Group’s scale in
investments and cost management.
There are clear benefits to our
people, including career development
opportunities and improved learning
and development investment.
This new way of working does have
some complexities, and we continue to
manage teething issues as we adjust to
our new operating rhythm.
Intellectual Capital
Our expertise
Improving our digital offering
We have invested significantly in
product management, user experience
and development in FY18 to deliver a
world-class e-commerce experience.
We’ve built a team who have a
common goal: to delight customers
with the beauty of technology, serving
customers anywhere, anytime and
through any device. We’re continually
introducing and testing new digital
innovations to make shopping with us
as convenient as possible.
The Warehouse app, originally
introduced in 2014, is one of the top-
rated shopping apps in New Zealand
with a 4.7-star rating on iTunes (at
time of publication), and revenue
is up 275% on FY17. The app offers
voice technology, product scanning
capability, and we have recently
introduced ‘Snap and Shop’, in
partnership with Google, which allows
customers to take photos on their
smartphone of any item they like and
instantly match them with thousands
of products in our catalogue. Similarly,
we were one of two retailers in New
Zealand to partner with Instagram on
launching Instagram Shopping, giving
our social-media audience the option
to ‘see it, get it’ directly from our posts.
In FY18 we entered into a trial with
PartPay on The Warehouse, Warehouse
Stationery and Torpedo7 websites,
Our expertise
We don’t sit still.
38The Warehouse Group Limited

which allows customers to spread out
the cost of goods purchased online
over six weeks. PartPay has been
popular and now makes up 16% of all
online transactions.
Other innovations have included
introducing ‘chat bots’ to improve
customer service experiences and
outcomes. We still have a long
way to go, and the purchasing and
fulfilment parts of the online customer
experience are not yet up to standard.
This is an area where the
variability of performance across
the Group is evident. In some parts
of the business such as 1-day we’ve
got it right, but in others such as the
Red Sheds, we currently operate a
distributed fulfilment model from
some stores, which is difficult to
The Warehouse app is rated 4.7 stars on iTunes at the
time of publication, and revenue is up 275% on last year.
manage with our current inventory
management practices in store. As a
result, customers can often receive
multiple parcels in the fulfilment of
their orders. This is inefficient, costs us
money and frustrates our customers.
Improving online fulfilment is a key
focus area for the business in the
coming 12 months.
We’re doing marketing
differently
FY18 saw some strategic changes
to our marketing structure and
approach. While we continue to focus
on growing our independent brands,
we consolidated all our marketing,
e-commerce, customer experience and
customer engagement functions into
a centralised Centre of Excellence,
39Annual Report 2018

creating a fully-scaled and integrated
marketing capability.
We moved from seven separate
media planning and buying agency
relationships to a single media
agency of record. Following a robust
selection process, we appointed
OmnicomMediaGroup as our partner
with a focus on innovation, customer
engagement, and best-in-class
measurement and attribution.
In this new configuration, we are
better able to measure the results
of our marketing. For example, our
customers responded well to this
winter’s Big Toy Month, our first
major toy campaign post-Christmas
under EDLP. The campaign applied
our new marketing capability across
in-store and online channels. Sales in
the toy category increased 3.0% and
the average basket increased 6.0%
during the campaign. We ran a fully-
integrated marketing process from
creative, media through to insights
and produced targeted vertical video
content for mobile.
Other highlights included
introducing first-in-New Zealand
digital marketing initiatives, including
launching personalised product
catalogues on Facebook, in-store
visit conversion campaigns with
Google AdWords, and single customer
view models for predictive email
campaigns.
We have also invested in world-
class marketing talent. The Group
has appointed Jonathan Waecker as
Chief Marketing Officer and Michelle
Anderson as Chief Digital Officer,
and brought two high-profile New
Zealanders home to lead in Executive
Creative Director and Head of Group
Insights and Data roles.
Loyalty programmes
The Warehouse Group has a number
of loyalty programmes, products and
redemption partnerships across our
network, including MyNoelLeeming,
BizRewards, the Torpedo7 Over and
Above Club, and The Warehouse
Christmas and Jewellery Clubs.
Noel Leeming and Torpedo7 are also
members of the Fly Buys scheme,
with Noel Leeming one of the largest
redeemers of Fly Buys points in
New Zealand.
Around 50.0% of customers shopped
at two or more Group brands in the last
year, and we are exploring options for
how we can promote and improve the
cross-brand purchasing ratio.
Transformation
Fixing our retail fundamentals is all
about improving how we do things,
getting better at managing our core
business processes, and reducing or
eliminating processes that don’t add
value for our customers. One of the
key benefits of the transformation
programme is the involvement and
engagement of hundreds of people
across the organisation, all with a
continuous improvement mindset,
a shared understanding of what our
goals are, and the permission to effect
change throughout the business to
improve profitability and better meet
our customers’ needs.
‘Our new marketing
structure is working
and customers are
responding well to
our new campaigns
under EDLP.’
NICK GRAYSTON
CEO, The Warehouse Group
Intellectual Capital
Our expertise
40The Warehouse Group Limited

The Noel Leeming Tech Solutions
business continues to go from strength
to strength under the leadership of
Sean Stephens, GM Retail Services.
“Customers have told us they want
the latest products but they don’t
always have the time or knowledge to
get things up and running as efficiently
as they would like – so that’s where we
come in,” says Sean. “We can help with
anything from wall-mounting a TV to
maximising a customer’s Wifi so they
can stream their favourite shows.”
“Our aim is to relieve any
technology pain points – whether
that’s getting something delivered,
installed and set up, or providing
support further down the track.”
Tech Solutions services can be
purchased à la carte or as part of a
package when buying a new product
(MyTechSolution). Our Tech Solutions
brand has service spaces in every
store throughout New Zealand from
Kaitaia to Invercargill, and strong brand
presence in our online channels.
MyTechSolution is an end-to-
end service proposition where
customers have the total support of
Tech Solutions staff for any of their
technology and appliance service
needs including delivery, setup and
installation, learning and product
education, remote technical support,
cover for getting products repaired at
no extra charge and an annual bonus
$20 gift card.
We have 77 dedicated Tech
Solutions specialists nationwide
fulfilling customer needs both in-home
and in-store. Stores without dedicated
Tech Solutions specialists have cross-
functional Tech Solutions staff in order
to support Kiwi customers wanting
Tech Solutions services. At any time,
we have upwards of 150 team members
capable of delivering Tech Solutions
Services throughout the country.
Noel Leeming Tech Solutions
services over 40,000 kiwi homes per
year and this is set to double in FY19.
The overall Services business has
had strong year-on-year growth during
FY18, up 17.0%, with growth coming
from all service lines of business.
This growth was a result of several
initiatives executed during FY18.
One was the nationwide roll-out of
Tech Solutions spaces into all Noel
Leeming stores, improving coverage
and delivering growth of 21.0% in the
in-store portfolio.
We are particularly pleased with the
service plan revenue growth, which is
up 21.0% year-on-year. Around 24.0%
of all service plans were the new
MyTechSolution package, and over
50.0% of customers purchasing the
new MyTechSolution product have
used some feature of the service plan
within the first year.
All of this has been achieved
with a Net Promoter score for Tech
Solutions of 86.0%. This demonstrates
that the high levels of growth have
enhanced customer experience and
not detracted from it.
Passionate
experts unlock
New Zealanders’
tech potential
Intellectual Capital
Noel Leeming - Case Study
growth YOY across
Services business in FY18
service plan growth increase
paid customer interactions
dedicated Tech Solutions
specialists nationwide
the Net Promoter
Score for Tech
Solutions in FY18
17%
21%
55,000
77
86%
NOEL LEEMING TECH
SOLUTIONS SERVICES
AT A GLANCE
Relieving New Zealanders'
technology pain points
41Annual Report 2018

Unlocking
value in direct
sourcing
ensuring our ethical sourcing practices
are met and our products exactly match
our quality and design specifications.
Complemented by improvements
in the reporting and analysis of data,
direct sourcing also means that we
can meet customer demand faster.
We have built the capacity to respond
more quickly to micro or geographical
trends and replenish popular goods.
In FY18 we significantly increased
the number of products sourced
directly and we will continue to increase
this during FY19. The move to direct
sourcing has been remarkably quick
and smooth, and as a result we have
become more efficient and productive,
reducing our expenses as a percentage
of orders by 0.9% year-on-year.
We achieved this change through
increasing our own sourcing capability,
integrating our buying and sourcing
teams, and working cross-functionally
across planning, buying, design and
sourcing, and quality. Almost 100%
of our apparel range is now directly
sourced, and we are currently
replicating the process across our Home
and General Merchandise categories.
We are also moving more of our
private-label brands in Warehouse
Stationery to direct sourcing in FY19.
While we continue to operate
in China, particularly for General
Merchandise production, India and
The Warehouse aims to make the
desirable affordable by providing
stylish and functional products to
New Zealanders, and most of our
product range in The Warehouse
Stores are from our own private label.
We made the decision to increase
our direct sourcing capability in FY17,
improving the cost, quality and speed
to market of our goods. In FY18 we
have accelerated the transition to
a direct sourcing model through our
transformation programme, in line
with our strategy of fixing the retail
fundamentals.
Direct sourcing involves managing
and controlling the design and
production of goods in-house, rather
than relying on agents to facilitate the
process. It allows us to have much closer
relationships with our factory suppliers,
Designed by
New Zealanders,
for New Zealanders:
The Warehouse Group
has invested in design
capability over the past 18
months as part of our move
to a direct sourcing model.
The majority of our private-
label products are designed
by New Zealand designers
at our office in Northcote,
Auckland.
Sourcing better products
at better prices
Intellectual Capital
Direct Sourcing - Case Study
42
The Warehouse Group Limited

Bangladesh are emerging as global
powerhouses in producing apparel
and soft home goods, establishing
‘factories of the future’. In February
2018 we opened a Sourcing Office in
New Delhi, India, employing a team
of 20 who work closely with our
accredited factories in India
and Bangladesh. To date, the India
Sourcing Office continues to exceed
expectations and we are forecasting
accelerated growth again in FY19.
We remain focused on developing
best-practice sourcing processes,
systems and competencies. Our
Computerised Business Exchange
(CBX) implementation is on track and all
orders are now raised using this tool.
To unlock the next level of value in
direct sourcing, in FY19 we will seek
to transition to Wholly Foreign Owned
Enterprise (WFOE) status in China,
so that we can locate related services
such as quality control, production
management, and pick and pack closer
to source.
Direct sourcing involves managing
the design and production of goods
in-house, rather than relying on
agents to facilitate the process.
43Annual Report 2018

The Warehouse Group’s team members
are our heart, and New Zealand is
our focus. We are working harder
on working smarter and making the
connection between our capability
and our customers stronger than
ever before.
Culture
To achieve our goal of delivering long-
term sustainable profitability in an
increasingly competitive context, we
are transforming our culture. Reaching
our full potential means focusing on
both culture and performance.
A key part of that is respecting
our heritage. We’re already a people-
centred, Kiwi-proud and socially-
responsible organisation. We are now
developing a performance culture,
centred on delivering to and exceeding
our customers’ expectations. This
means providing clarity of focus to our
team, and defining what good looks
like to drive elevated performance right
across the organisation, from customer
interactions in store through to our
Store Support Office's activities.
We could be better at aligning
performance objectives with our Group
strategy, supporting individual career
purpose and goals, and aided by
learning and development. This is a key
focus area for our culture change as we
push to become a more performance-
oriented business, while not losing the
heritage values that connect us with
our customers. We want to constantly
improve productivity, continually grow
individual and company capability, and
enable greater visibility and recognition
for high performance. Our people
We’re on for
our customers.
Human Capital
Our people
44The Warehouse Group Limited

The Warehouse
Group employs
12,000 people in
New Zealand.
45Annual Report 2018

One of the complexities of Group
matrix management is taking the strong
values from each brand and making
them relevant and resonant across the
business. The next step in the evolution
of our culture was to engage our
people in over 70 workshops to capture
and define the purpose that unites us.
These workshops helped to create
our new Group vision, purpose and
values, which were launched to our
team in July 2018.
People and capability
Finding people with the right skills is a
key challenge. While we have been able
to attract world-class talent to bring
in new ideas of global best practice at
senior management level, we struggle
to find the required omnichannel retail
experience across many departments,
particularly in buying and sourcing,
and supply and logistics.
This challenge is not unique to us or
the sector, and reflects New Zealand
as a small market and the relatively
recent exponential developments
in retail disruption. It is also a result
of our specific operating model, with
functions such as direct sourcing.
As well as continuing to look for
specialist talent offshore when we can’t
find it in New Zealand, we are focused
on building our bench through learning
and development too. Retraining
and developing our existing people
makes sense, from both a cost and
intellectual property perspective, as
supported by our People strategy.
In stores, we have a very good
level of operational excellence,
and our focus now is to look at
Human Capital
Our people
The Warehouse Group prides itself on
taking a stand on social issues that affect
the health and wellbeing of our team
members and New Zealanders at large.
Diversity Targets
White Ribbon Accreditation by 2017Complete
Inclusion Network in place by 2018On track
All managers to have completed Bias training by 2018Complete
Rainbow Tick Accreditation by 2019On track
Pay Equity across the Group by 2020In progress
Promotion Equity across the Group by 2020In progress
46The Warehouse Group Limited

how we can develop and recruit for
strategic agility and enterprise. This
also requires us to introduce more
flexibility within our frameworks
and decision-making processes.
Workplace relations
The industrial climate in New Zealand
has shifted recently, and rising labour
costs are a challenge for the Group,
which employs 12,000 people, and for
the retail sector at large. The expanding
labour supply has dampened wage
inflation and there is an expectation
that wages will catch up, as people
meet higher costs of living.
The Warehouse has typically paid
above the minimum wage through
the Career Retailer Wage programme,
which rewards team members who have
completed their training and more than
5,000 hours or five years’ service.
We see the overall cost of labour as
a headwind over the next few years,
and while the Group is currently unable
to simply absorb increased wage costs
within current productivity levels, we
will work to unlock further productivity
gains, and drive innovation around our
business processes.
Keeping our people
safe and well
We are committed to providing a safe
environment for our team, customers,
contractors and visitors, and our
appetite for risk is low. We take a
holistic approach to health, safety
and wellbeing, and people are
supported to be their best through
the promotion of healthy environments
and safe behaviours.
While the Group has made
progress on developing a positive
safety culture, FY18 has seen
a renewed rigour and focus on
health, safety and wellbeing.
The Board has established a
new Health, Safety and Wellbeing
Committee to ensure the best-possible
governance exists, and there is a
stronger focus on assurance through
auditing and reporting. The health,
safety and wellbeing function has also
been elevated within the organisation
to General Manager level, reporting
to the Chief People Officer. As part
of this, we are rebuilding our Health
Safety and Wellbeing framework to
create clear standards that hold us
accountable, and we are continuing to
improve the management of risks that
could cause serious injury or harm.
We have re-identified our critical
risk areas, and established critical risk
workstreams with assigned subject-
matter experts and operational leads to
create control methodology. This will
create more consistent practice across
the Group, keeping our team members,
contractors and customers safer.
Like most large employers in New
Zealand, The Warehouse Group self-
insures against health, safety and
wellbeing claims as part of the ACC
Partnership Programme. In FY18 the
Group retained its accreditation.
Wellbeing
The Warehouse Group prides itself on
taking a stand on social issues that
affect the health and wellbeing of our
team members and New Zealanders
at large. One of these is smoking,
which kills 5,000 New Zealanders
a year. The Warehouse has never
sold cigarettes or tobacco products
and we were pleased to adopt a
completely Smokefree environment
on 1 January 2018.
The Warehouse Group
team members at the
Store Support Office in
Northcote, Auckland
47Annual Report 2018

Mental health is a key issue, also
with around one in six New Zelanders
experiencing some form of mental
illness. In October 2017 we introduced
our ‘Suicide: Supporting those at risk’
policy, designed to ensure early support
is available to address significant mental
distress among team members. The
policy aims to minimise access barriers
to primary care, and educates managers
on how to support and respond to team
members who may be experiencing
mental distress.
The Group already offers free
counselling to team members and
their families, and the new policy
provides additional support by way
of a free GP visit, and the opportunity to
take leave to support family members or
colleagues experiencing mental distress.
In 2015 we launched our Domestic
Violence Policy to support team
members experiencing family violence.
We provided training to managers on
how to appropriately support staff,
and made resources and information
available on our intranet. In 2016 we
created a shielded icon on our external
website to allow women to access
help and support services in a way
that is untraceable.
We have focused on reducing the
impact of family violence in New Zealand
through our fundraising initiatives
in FY18, including raising $638,000
through The Warehouse Group Gala
Dinner for the Breakthrough programme.
Breakthrough is a partnership between
The Salvation Army and The Parenting
Place to help fathers with a history of
domestic violence become better dads.
We have shared our knowledge with
over 100 other businesses interested
in developing their own policies, and
readily welcome enquiries. In FY18 we
were acknowledged for our work in this
area by Women’s Refuge, and received
their Workplace Refuge endorsement
for businesses actively providing a
workplace refuge for staff experiencing
family violence. We were also the first
organisation in New Zealand to become
White Ribbon accredited in 2017.
Human Capital
Our people
We believe that diversity creates
a more productive, creative and
dynamic society and improves our
ability to see and connect with the
world around us.
48The Warehouse Group Limited

Connecting with our people
In May 2018 we launched a
new digital platform for internal
communication across the Group.
Using The Warehouse Group TWG
Tahi desktop and mobile apps, our
12,000 team members can now share,
collaborate and receive business
information whenever and wherever
it is needed. This is the first time
the Group has had a tool which is
available to every single one of our
team members at once.
Celebrating diversity
and inclusion
The Warehouse Group has always
believed in doing what is right and
helping Kiwis to reach their full
potential. We believe that diversity
creates a more productive, creative
and dynamic society and improves our
ability to see and connect with the
world around us. It’s the right thing to
do, and it also makes good business
sense to reflect the rich make-up of
our 12,000 team members and the
millions of Kiwis who shop with us
every week.
We’re dedicated to providing an
inclusive work environment to attract
and retain talented people. The
focus areas to progress our diversity
and inclusion agenda continue to
be: gender, ethnicity, age, disability
and our Lesbian, Gay, Bisexual,
Transgender and Intersex (LGBTI+)
community.
In August 2017 we introduced our
Gender Transition Policy to support
team members transitioning gender.
The policy provides an additional
ten days paid leave to any team
member transitioning gender, and was
developed in consultation with the
Rainbow Tick organisation. This policy
is an important statement about our
commitment to inclusivity.
FY18 also saw the Group participate
in the Auckland Pride Parade for the
first time. A total of 128 team members
registered to participate in the Parade,
along with Group CEO Nick Grayston
and members of the Executive Team,
to march in support of diversity, respect
and inclusion.
In FY19 we are looking forward
to receiving the Rainbow Tick,
which demonstrates that we are
an organisation that understands,
values and welcomes sexual and
gender diversity.
Above:
The Warehouse Group
participated in the Auckland
Pride Parade in February 2018.
49Annual Report 2018

40%
60%
Women
For the 2018 calendar year, we have
expanded our Noel Leeming Women
in Leadership pilot programme across
the wider group. Initially designed to
help improve the number of women
in management roles within the Noel
Leeming business, the programme
will see 14 high-potential women from
various roles across the Group graduate
from the programme in September.
Currently we have median gender
pay equity at a group level. However,
there are some areas within our business
where we have a slight difference.
We are working on a consistent
approach to gender pay equity
across the Group, with investment
planned in FY19. Our goal is to be
operating at best practice by FY20.
We are developing our diversity
initiatives across more segments of
our team in FY19. Each member of
the leadership team will undertake
responsibility for one area of diversity
and inclusion as executive sponsor.
In terms of governance, Diversity
is an important focus for our People
and Remuneration Committee. We
updated our Diversity Policy and
objectives in September 2017, and
the Committee has reassessed and
confirmed the policy and progress
against objectives in 2018.
BOARD MEMBERS
EXECUTIVE TEAM
FY17
ALL TEAM MEMBERS FY17
BOARD MEMBERS
EXECUTIVE TEAM
FY18
41%
59%
ALL TEAM MEMBERS FY18
FEMALE
MALE
Human Capital
Our people
FEMALE
MALE
50The Warehouse Group Limited

Learning to speak Te Reo Māori gave
team member Ata Marsh a “sense
of belonging” - and now it’s made
her famous.
The much-loved checkout operator
at The Warehouse store in Newmarket
has been charming customers for
years by chatting with them in Te Reo,
but she managed to reach a whole
new audience when she was featured
on Stuff, One News, and Maori
Television in early 2018.
The inspirational mother-of-four
told reporters that customers are
often “so happy” to hear her speak
Te Reo that some even join in. “Some
people haven’t heard it in a long time
and reminisce with me, tell me how it
takes them back.”
Case Study
Te Reo Māori
Charming
customers with
Te Reo at
The Warehouse
Case Study
For others, she hopes that she will
inspire them to learn the language.
Ata says, “I hope that every single
customer that I’ve spoken Te Reo
Māori to, I’ve planted a seed in
them and maybe they could go to
a wānanga and learn Te Reo Māori
and be as passionate as
I am about my language.”
For Ata, learning to speak Te Reo
Māori is still a work in progress after
she went on an immersive year-long
course. “For me personally, being an
older speaker, I don’t absorb quite as
quickly as our young tamariki do,
but kei te pai. I’m so passionate about
Te Reo Māori nothing can stand in
my way.”
That passion is evident to
everyone who meets her. In fact,
The Warehouse Chief Executive
Pejman Okhovat says he’s been
inundated by phone calls, letters
and emails about Ata since she
joined the team nearly five years ago.
“Customers have reached out and
shared their wonderful experiences
with Ata - her great attitude and what
a positive role model she is for the
community. We’re extremely proud
to have her on the team.”
51Annual Report 2018

We believe that working together
as partners for the benefit of New
Zealand is the key to building
successful relationships. Through
our business operations and
activities, we regularly engage with
stakeholders including our customers,
our employees, our suppliers, our
communities, government and industry
bodies, and our charity partners.
Our communities
Social responsibility is in our DNA as a
company. The Warehouse Group has a
long history of supporting New Zealand
communities, built on the philosophy
of our founder, Sir Stephen Tindall.
Since 1982, we’ve facilitated donations
of more than $63m to charities and
community groups across the country.
In FY18, we raised $5.3m.
As customers increasingly expect
organisations to behave in a socially
responsible and ethical way, we’re
focusing on extending our corporate
citizenship activities. We don’t do this
to seek recognition, but because we
believe it’s a fundamental part of our
purpose, and we are encouraged by
the results we achieve by working
with our community partners.
We value our relationships with
our charity partners and we work
together to design programmes that
will have an impact on New Zealand’s
most pressing issues. In future,
we will align our partnerships and
programmes of work with our key
areas of focus in accordance with
the Sustainable Development
Goals for New Zealand.
Government
We have links to government through
our Board of Directors and Executive
Team, and contribute our point of view
on issues that matter to us, our team
members and our customers. We tend
to work through Retail NZ (formerly The
Retail Association of New Zealand) on
matters of government policy. However,
we are considering how we might use
our voice more on matters of particular
significance to the Group; for example:
our work to reduce family violence in
New Zealand with a range of partners,
and our recent contribution to the
Human Rights Commission’s submission
to the Select Committee considering
the Victim’s Protection Act 2018.
Sector engagement
In 2017 we officially launched The
Warehouse Red Shirts in Community
programme, an innovative public-private
partnership with the Ministry of Social
Development (MSD) to provide work
experience opportunities for young
people aged 16 to 24 not in employment,
education or training. Participants spend
three weeks working in a The Warehouse
store and receive training in retail
customer service, communication skills,
stock management and basic health and
safety. Where possible, participants can
earn NCEA credits towards a National
Certificate in Retail (Level Two).
The scheme was rolled out to 1,154
young New Zealanders after pilot
programmes in Whanganui, Kaitaia and
Wellington saw 70% of the participants
in some form of paid work within three
months of completing the programme.
We are now working closely with MSD
to develop an adapted model that can
be used by other large New Zealand
organisations interested in work
readiness programmes.
Our relationships
Stakeholder Capital
Our Relationships
The whole is
greater than the
sum of its parts.
52The Warehouse Group Limited

In partnership with the Department
of Corrections, our Distribution Centres
have been involved with Corrections’
release-to-work programme for
offenders since 2008. The programme
allows minimum-security prisoners,
who are assessed as suitable, to engage
in paid employment. They are paid
market-related wages. To date, we have
assisted a total of 185 people to gain
work experience through this initiative.
In 2017, we partnered with the
Government’s Low Emissions
Contestable Fund to install 24 electric
vehicle charging stations at The
Warehouse stores around New Zealand.
Noel Leeming has a commercial
relationship with the Government
also, being the only major retailer
participating in an all-of-government
procurement contract to provide IT
hardware to government agencies and
departments. In addition Noel Leeming
has a syndicated contract with the New
Zealand Defence Force to supply goods
and services, and other government
agencies can take part in this contract,
with around 20 participating at present.
The Group has a commercial
partnership with The Manaiakalani
Education Trust, which guarantees
digital equity and access for students
from low-decile schools, retooling
these schools to make education
engaging, empowering and success-
making. As well as supplying
technology and equipment, we also
provide give-back benefits and the
opportunity to pilot digital innovations
for participating schools.
The Warehouse operates ‘Red
Shirts in Schools’, a high-school-based
work experience programme, part of
the Tertiary Education Commission’s
Gateway Programme. Gateway funding
enables secondary schools to give
senior students access to structured
workplace learning, integrated with
school-based learning.
In 2018 the Group hosted 12
students to spend a day with business
leaders as part of the Auckland
University of Technology (AUT) Shadow
a Leader programme, and provided five
scholarships to students completing
the Bachelor of Retail and Business
Management at Massey University.
The Group also hosts AUT and Massey
University co-op students as interns
each year.
Our contribution to
New Zealand’s regions
We employ around 5,000 people
in the regions outside of Auckland,
Wellington and Christchurch, which is
around 40% of our workforce. In more
than 20 New Zealand regional centres,
The Warehouse is the only general
merchandise retailer in town, providing
New Zealanders with everyday
necessities they otherwise would
not have easy access to.
Suppliers and partners
Our suppliers are strategic partners
in delivering quality products
that provide good value for
New Zealanders.
We take an open and honest
approach to communicating with
suppliers. For example, in June 2017
we held a suppliers’ conference to
talk through the change from Hi-Lo
discount-based pricing to EDLP in
The Warehouse, and we’re grateful
to our suppliers for their support
as we continue to bed that change
in. Similarly, we met with Torpedo7
suppliers to update them on our
plans and appreciate their support
and positive feedback as we expand
the Torpedo7 store network across
New Zealand.
In areas such as consumer
electronics, where product innovation
is rapid, our relationships with global
brands such as Sony, Samsung
and Apple enable us to ensure our
customers can access (sometimes
scarce quantities of) the best
products as they become available
internationally.
Our move to a direct sourcing
model for our private labels has meant
we have been able to facilitate much
closer relationships with the factories
that produce our goods for mutual
benefit. For example, with some
suppliers we can book production lines
in advance, which gives us certainty
and pricing advantages.
Closer relationships with factories
and understanding their timelines
and capacity helps us to also ensure
that our ethical sourcing practices are
adhered to. We currently have 99%
visibility of our Tier 1 factories and
their conditions and standards.
53Annual Report 2018

CAUSE BRAND
AMOUNT
RAISED
BENEFIT TO
NEW ZEALAND
STRATEGIC
PRIORITY AREA
Breakthrough
Programme
The Warehouse
Group
$638,000
A programme of mentoring and support
for fathers with a history of violence
Family violence
Building stronger families
OUTLine
The Warehouse
Group
$5,000
Sponsorship
20,000 pamphlets produced to promote
counselling for the LGBTI+ community
Diversity and inclusion
PHAB –
Supporting youth
with disabilities
The Warehouse
Group SSO
Charity Partner
$17,461
Helped upgrade PHAB’s Takapuna facility
by providing much-needed homewares,
games and technology, and donated
several Mac Books to the teenagers of
PHAB
Education
Building stronger communities
Distribution Centre
fundraising –
various charities
The Warehouse
Group – Distribution
Centre fundraising
$13,136
Fundraising supporting Duffy Books, Blind
Foundation, NZ Breast Cancer Foundation,
Cancer Society of NZ, and The Salvation
Army
Local communities
Bob Tindall
Golf Day
The Warehouse
Group
$54,033
Youthline will be able to train an additional
200 volunteers in 2018/19 to respond to
increased need
Mental health
Supporting youth
Payroll Giving
The Warehouse
Group
$114,169
Employees engaged in charitable
giving to support their community
Local communities
Plunket The Warehouse$343,576
1,100 new baby essential packs
distributed to struggling families
Building stronger families
Zoofari The Warehouse$305,961
9,000 kids from low-decile schools
received free educational zoo visits
Environmental education
Youth
Water Safety
New Zealand
The Warehouse
$450,000
Sponsorship
51,557 kids received free
water safety education lessons
Education
Safety
Youthline The Warehouse$314,268
84,470 young people supported to get
the help they need during a crisis, relating
specifically to self-harm, suicide, anxiety
and depression
Mental health
Supporting youth
Variety – the
children’s charity
The Warehouse$332,745
290 financially disadvantaged kiwi kids
supported through Variety’s sponsorship
programme and/or provided essentials
Supporting youth
The Parenting
Place
The Warehouse$301,229
4,144 parents have attended
a Toolbox Parenting course
Building stronger families
Life
Education
The Warehouse$340,698
4,200 children from low-socioeconomic
areas, who would have otherwise missed out,
attended the Life Education programme
Supporting youth education
Women’s
Refuge
The Warehouse$462,914
Over 4,100 children across New Zealand
were supported through the 'Kids in the
Middle' programme, to help rebuild a life
free from violence
Domestic violence
Building stronger families
Women’s Refuge –
Twice the Joy
Christmas Appeal
The Warehouse
$65,500
raised
Over 9,000 Christmas gifts given to
kids throughout New Zealand across 31
Women’s Refuges. (realising over $163,750
product value)
Domestic violence
Building stronger families
Fundraising FY18: Accountability Report
Stakeholder Capital
Accountability report
54
The Warehouse Group Limited

CAUSE BRAND
AMOUNT
RAISED
BENEFIT TO
NEW ZEALAND
STRATEGIC
PRIORITY AREA
Bags for Good –
local community
charities
The Warehouse$349,728
552 local charity groups supported with
proceeds from the sale of checkout bags
and coin box donations
Local communities
Small Product
Donations
The Warehouse$260,640
Funds collected through plastic bags
within each of the 93 The Warehouse
stores used for small product donations
to local community groups
Local communities
BBQ Fundraising The Warehouse$274,964
Store BBQs used to support and assist
local community groups to fundraise
for community activities
Local communities
The Salvation Army –
Aspire programme
Warehouse
Stationery
$66,004
225 at-risk young Kiwis taken through a
year-long youth development programme
Supporting youth education
The Salvation Army –
Back to School
Warehouse
Stationery
$63,875
4,000 children supported with
Back-to-School supplies
Supporting youth education
CanTeen
Warehouse
Stationery
$127,758
43 CanGrow grants awarded, allowing
270 youth cancer patients to receive
one-on-one educational programmes
Supporting youth education
Duffy Books
Warehouse
Stationery
$26,520
1,500 students across 11 schools received
5 books; 7,700 books distributed in total
Supporting youth education
Child Cancer
Foundation
of New Zealand
Warehouse
Stationery
$72,374
Over 150 families of kiwi kids newly
diagnosed with cancer, supported
with a wellbeing pack
Supporting youth education
Health and wellbeing
Scouts
New Zealand
Warehouse
Stationery
$39,511
Over 250 disadvantaged Kiwi kids
received an adventure experience
Supporting youth education
The Key to Life
Charitable Trust
Warehouse
Stationery
$19,439
20,000 students will hear the message
of positive attitudinal change throughout
New Zealand, in part due to the generous
support of Warehouse Stationery
customers
Mental health
Supporting youth
New Zealand Fallen
Heroes Trust
The Warehouse$32,520
Benefiting the families of fallen and injured
soldiers with grants to help with Back-to-
school costs
Building stronger families
New Zealand
Schools
Noel Leeming -
Friends and Family
rebates
$65,800
Funds raised benefiting 413 recipients
across New Zealand
Supporting youth education
Hillary
Outdoors
Torpedo7$20,825
2,500 kids were given the gift of outdoor
adventure through the Get2Go and Hillary
Challenge national events
Supporting youth education
Ronald McDonald
House Charities
1-day$50,000
$20,000 in funds, $30,000 in product
donations to support Ronald McDonald
House
Health and wellbeing
All other
fundraising*
The Warehouse
Group
$26,740
Funds donated to 30 smaller
charity groups.
Local communities
TOTAL $5,255,388
*All other fundraising (funds donated to 30 charities, including: Bluelight, Christchurch Hospital, Red Cross, Skylight, The Hearing House, World Vision).
55Annual Report 2018

v
Left: Sewing operator
Shirin Akter of
apparel manufacturer
Yunusco Group in
Bangladesh.
New Zealanders want to know that
the overseas workers who make their
products are not mistreated. As an
organisation that contracts for the
manufacture of products offshore,
The Warehouse Group has a
responsibility to ensure that workers in
our suppliers’ factories are paid fairly
and have humane working conditions.
All suppliers must abide by our
comprehensive ethical sourcing
programme, which focuses on
protecting the workers who make our
own-brand products. Our programme
contains the three elements of policy,
due diligence, and remediation or
corrective action described in the
United Nations Guiding Principles
on Business and Human Rights.
Local laws and customs, sub-
contracting practices and limited
visibility of the entire value chain
in regard to raw materials mean
that challenges exist. With around
500,000 people associated with the
manufacture of our products each
year, our responsibility is significant.
We have been actively assessing
and monitoring working conditions
Ethical sourcing
in these supply chains since 2004.
More recently this has also included
suppliers associated with the
Warehouse Stationery and Torpedo7
brands and our larger non-trade
procurement programmes.
We’ve made good progress, but we
still have work to do. Our achievements
to date include the fact that we have
visibility of 99% of our private-label
merchandise factories supplying
The Warehouse. Every new factory
wanting to join our supply chain must
be independently assessed to ensure
they meet our standards. Our standards
are stringent – in 2017, we declined 39%
of new factory applications.
Our work does not stop short at
assessments – our own Ethical Sourcing
specialists work actively with factories
to support their ongoing improvement.
In addition to face-to-face consultation,
we distribute a free library of e-Learning
lessons addressing various labour
management challenges factories
may face.
We work with our suppliers to
address unique needs in each
developing country. For example,
Stakeholder Capital
Ethical Sourcing - case Study
Case Study
56The Warehouse Group Limited

v
through our membership of the Alliance
for Worker Safety in Bangladesh,
we have been part of a complete
transformation in health and safety
within members’ garment factories.
In Malaysia, where manufacturers
have a high dependency on foreign
migrants, we have been enrolling
our vendors in a multi-stakeholder
programme facilitated by the
Responsible Business Alliance.
This programme brings together
recruitment agents, factory managers,
and foreign migrants to alleviate
forced labour risks for all participants.
We are introducing further initiatives
in FY19 to progress improvements
in working conditions for the people
within our supply chain. We will sponsor
new workplace health and financial
literacy initiatives for women in India
and Bangladesh through HerProject.
We will also join the international drive
to improve the sustainability of cotton
production by becoming a participant
in the Better Cotton Initiative.
In FY18 we continued our tradition
of public transparency with our most
comprehensive report to date:
The Warehouse Ethical
Sourcing Report, which contains
more information about our
accomplishments and challenges
and a detailed description of how our
programme works. We also launched
'Wear Your Ethics', a consumer-
facing website for The Warehouse.
These resources were reviewed and
informed by dialogue with NGOs and
external consultants.
Environmental
protection
measures
are sound
Wages meet or
exceed legal
entitlements
Working hours
are not excessive
Working
conditions are
safe and hygienic
There is no
unauthorised
subcontracting
or processing
Employment is
freely chosen
There is no
unethical or
illegal conduct
OUR COMMITMENT TO
ETHICAL SOURCING. WE
STRIVE TO ENSURE THAT:
There is no
child labour
57Annual Report 2018

Stakeholder Capital
Breakthrough - Case Study
Changing lives
with Breakthrough
58The Warehouse Group Limited

Family violence is an important issue
in New Zealand, with one in seven
children stating they have been
harmed by a parent, and an act of
family violence being reported every
five-and-a-half minutes. In 2017
The Warehouse Group extended our
work to address family violence in
New Zealand by funding the ground-
breaking Breakthrough programme.
A partnership between
The Salvation Army and The
Parenting Place, Breakthrough is
a comprehensive programme to
support fathers with a history of
violence to build healthy, safe
family relationships.
Thanks to the generosity of
suppliers, partners and team
members, The Warehouse Group
Gala Dinner in 2017 raised $638,000
to support the programme. The
Warehouse Group Gala Dinner raises
money for community partners that
take an innovative approach to a
challenge facing the community.
Jono Bell, National Practice
Manager Social Services at
The Salvation Army, says the
Breakthrough programme addresses
a critical service gap – supporting
dads to change.
“While there are some existing
programmes to help fathers
address their violence, this is the
first comprehensive initiative in
New Zealand designed to strengthen
the relationships between at-risk
dads and their kids.”
Breakthrough involves three
components: ‘Building Awesome
Matua’ – a parenting course for
fathers; an intensive, personalised
male mentoring programme; and a
transformational three-day father-
child adventure experience.
Breakthrough will be delivered
in Kaitaia, Whangarei, West and
South Auckland, Gisborne, Taranaki
and Dunedin.
Jono says that The Warehouse
Group has been a leader in
addressing family violence, supporting
White Ribbon and Women’s Refuge,
and establishing a family violence
policy to support team members.
“Now, establishing Breakthrough
means that the Group is tackling the
issue from several different angles,
and collaborating to provide a
real solution.”
It costs about $1,000 for a
participant to complete the
Breakthrough programme, and
The Warehouse Group Gala Dinner
has raised sufficient funds for 638
families impacted by domestic
violence to benefit.
Above:
Laurie Beamish (Ngāi Tai ki Tāmaki),
David Benattar, The Warehouse Group,
Major Pam Waugh, The Salvation Army,
Greg Fleming, The Parenting Place,
Shari French, The Warehouse Group,
Hannah Chapman, The Parenting
Place, Jono Bell, The Salvation Army,
Camille Astbury, The Salvation Army,
Tim Hamilton, The Salvation Army, at
Umupuia Marae.
59Annual Report 2018

Visiting the zoo is a memorable part of
childhood for many Kiwi kids, but for
some families facing hardship, it can
be something a child may never get
to experience, says Auckland Zoo
director Kevin Buley.
Auckland Zoo is one of the
New Zealand zoos that teams up
with The Warehouse to deliver
‘Zoofari’, a programme providing
free conservation-based educational
experiences to children from low-
decile-schools.
A total of 12,000 children will
benefit from the programme this year,
after The Warehouse raised $305,961
from a successful in-store fundraising
campaign supporting Zoofari.
Kevin says that “we can sometimes
feel overwhelmed and think that, as
individuals, we can’t really make a
positive difference. But we need to
remember there are millions of us,
and every little positive action we
each take counts – there is enormous
power in our collective efforts, and
The Warehouse Zoofari programme
is testament to this.”
“The children who participate in
Zoofari are Aotearoa’s future wildlife
conservationists, vets, zookeepers,
teachers and wildlife documentary
makers – and The Warehouse Zoofari
programme is what may help spark
that passion and begin that journey,”
says Kevin.
“Over the five years Zoofari has
been at Auckland Zoo, we have
seen what a positive experience it
can be for everyone involved. Our
wonderful zoo educators see both
children and adults being inspired
from the moment they arrive and
long after they have left. They learn
about the way we care for our animals
at the Zoo, the way we help wildlife
in the wild and, importantly, what
each of us can do to help make the
world a better place. It is because of
initiatives like The Warehouse Zoofari
that we can all feel more optimistic
about the planet that our children
and grandchildren will inherit.”
The Warehouse Zoofari experience
is certified by the Ministry of
Education and the visit is facilitated
by zoo educators in partnership with
teachers to ensure integration into
the school curriculum.
The magic
of zoo learning

Opposite:
Kids from Finlayson Park
School in Manurewa enjoy
getting up close and personal
with animals at a Zoofari visit
at Auckland Zoo.
Stakeholder Capital
Zoofari - Case Study
60
The Warehouse Group Limited

KEVIN BULEY,
Auckland Zoo director
'The children that participate in Zoofari are
Aotearoa’s future wildlife conservationists,
vets, zookeepers, teachers and wildlife
documentary makers – and The Warehouse
Zoofari programme is what may help spark
that passion and begin that journey'
61Annual Report 2018

Our environment
Environmental Capital
Our environment
62The Warehouse Group Limited

The Warehouse Group is committed to
operating in a sustainable manner and
helping Kiwis to live their lives in the
same way. The current environmental
crises are a pressing global challenge,
and we want to play our part for New
Zealand, and the world.
Addressing our carbon footprint is at
the centre of our decision-making. We
are embedding emission management
into all our business practices, including
calculating emissions’ impacts as part
of business cases, and factoring this
into our negotiation and selection of
suppliers.
Tracking our carbon emissions
The Warehouse has been tracking and
reporting on its carbon emissions since
2009, and the entire Group of brands–
Warehouse Stationery, Noel Leeming
and Torpedo7–from 2015. The Group
has a target of a reduction of 32%
on 2015 emissions by 2030. This
target reflects the 2015 international
agreement to keep global warming
under 2.0%.
Group emissions increased by 3.4%
to 40,852 tonnes of carbon dioxide
equivalent (CO
2
e) in FY18, due to
increases in electricity usage, domestic
shipping (especially fulfilment of online
orders), landfill, fleet fuel usage and
refrigerant leaks from HVAC units.
In FY18, the Group retained our
New Zealand CEMARS
®
(Certified
Treading lightly
63Annual Report 2018

Emissions Measurement and
Reduction Scheme) certification for
our emissions measurement and
reduction programmes. To receive
this certification, our emissions
and emissions reduction plan were
independently reviewed and audited.
The Group is one of 13 New
Zealand-listed companies (out of
over 50 invited to participate) to fully
disclose their carbon performance and
management plans to CDP (formerly the
Carbon Disclosure Project). CDP is an
international not-for-profit organisation
providing a platform for companies to
measure, disclose, manage and share
environmental information with investors
to improve market transparency.
We were ranked second equal of
participating New Zealand companies
by the CDP for our carbon disclosure.
We were also the highest-ranked
company in our category for Australasia.
Energy efficiency
Part of our move to reduce emissions is
a transition to LED lighting in stores. In
Environmental Capital
Our environment
FY18 we increased the number of stores
with LED lighting by four, bringing
the total to 14. We’ve also continued
an LED replacement programme in
our Distribution Centres. We already
promote natural light where possible.
Efficiencies in logistics
In FY19, we will be continuing to
improve international shipping
container utilisation, ensuring capacity
is maximised. Where possible, we are
working with our shipping partners to
transport our products on bigger vessels,
which are more modern and efficient.
We are continuing to investigate
electric delivery vehicles and we are
watching developments in electric
commercial vehicles closely, awaiting
vehicles for with suitable range and size.
We utilise rail for store deliveries
where possible within New Zealand,
as rail is more efficient than road,
particularly over longer distances.
We have also introduced trucks with
mezzanine floors in FY18, to increase
cubic capacity and allow the double
stacking of goods, and are working
with our logistics partners to support
their efforts to drive better emissions
performances in road transport.
Climate Leaders Coalition
In 2017, a group of CEOs, including
The Warehouse Group CEO Nick Grayston,
agreed that there was a clear need for
collective action on climate change. They
drafted the Climate Change Statement
and in July 2018, it was signed by 60 New
Zealand businesses. By signing, the Group
has committed to measuring and reporting
our greenhouse gas emissions and working
with suppliers to reduce emissions, with
the aim of helping to keep global warming
within 20C as specified in the Paris
Agreement. The Coalition also supports
the introduction of a Climate Change
Commission and the establishment
of carbon budgets, enshrined in law.
Together, the 60 businesses represent
almost 50% of New Zealand’s emissions.
More information on the Climate
Leaders Coalition can be found at
www.climateleaderscoalition.org.nz
International shipping
Electricity
Domestic shipping
Employee air travel
Waste
Company-owned vehicles
Refridgerant losses from
air conditioning systems
Employee private mileage claims



Total
14,081
11,920
6,687
2,891
2,150
2,525
438

160



40,852
14,231
11,522
6,087
2,954
2,062
2,271
209

178



39,514
-1%
3%
10%
-2%
4%
11%
110%
-10%



3.4%
ACTIVITY FY18FY17CHANGE IN EMISSIONS
The Warehouse Group: Inventory of carbon emissions
(tonnes of carbon dioxide equivalent) in FY18 vs FY17
64The Warehouse Group Limited