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The Reject Shop posts sales decline due to lockdowns, absenteeism

The impact of Covid-related lockdowns and disruptions across international and domestic supply chains have affected The Reject Shop’s sales performance in the first half of this financial year.

In an ASX announcement, the discount retailer has announced that sales for the half were estimated at $424.7 million, down by 2.2 per cent compared to the previous year.

Gross profit landed at $178.8 million, with comparable-store sales falling due to rising Omicron in most states during the Christmas trading period.

Andre Reich, CEO of The Reject Shop stated that the team was challenged with uncertainty and volatility due to Covid.

“We endured lockdowns in almost every state, temporarily closed certain stores due to team member absenteeism and have been dealing with unprecedented disruption right across our domestic and international supply chain,” Reich said.

“[However,] we believe the discount variety sector presents a significant opportunity for growth over the medium to long term.”

During the half, the company increased its retail prices on selected products to counter rising international shipping costs which were five times higher than pre-Covid levels.

Store expenses were reduced by $1.1 million, while administrative expenses increased to $1.4 million. The brand also renegotiated over 70 leases in this half that were either in holdover or expired during the period. 

Despite this, the company managed to open 11 new stores in both metropolitan and country areas. The store network now includes 137 stores and plans are underway to open another 15 stores in the second half. 

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