Super Retail Group has flagged another margin decline in the second fiscal half despite recording sales growth across its businesses.

In a trading update for the first 17 weeks of the second half, the company said its gross margins were tracking below the prior comparable period. It added that the trend was broadly consistent with the year-on-year decrease in the first half.

Meanwhile, group total sales for the period rose 4.5 per cent and like-for-like sales grew 3.1 per cent. Despite a strong Easter trading period, retail conditions have otherwise remained subdued, particularly in New Zealand, the group said.

The Supercheap Auto business saw a 1.4 per cent increase in sales, but like-for-like sales were down 0.1 per cent, which the group said was consistent with the first half. The segment has been focusing on managing costs in a “lower growth environment near term”.

Rebel’s sales improved 4.4 per cent on a total basis and 3.5 per cent on comparable basis despite $5 million net sales headwind from the impact of cyclone Alfred.

BCF’s sales soared 10.7 per cent, with like-for-like sales up 9.1 per cent, driven by investment in stock availability and the Easter trading period.

Macpac posted a 1.3 per cent growth in sales, while like-for-like numbers fell 0.1 per cent.

The group projects an unallocated cost of $29 million this year, resulting from duplicated operating expenses associated with the transition to the Victorian distribution centre, and the new payroll and human resources management system.