Discount retailer The Reject Shop has returned to profitability in FY23 as cash-strapped customers shop for lower-priced goods.

Overall sales increased 5.8 per cent to $819.3 million with comparable stores sales growth up 4 per cent. Tax-paid profit grew 63.4 per cent to $10.3 million.

Due to higher cost-of-living strains, the company says customers gravitated towards low-priced consumables that represent value.

The business opened 15 new stores during the year predominantly in neighbourhood and strip locations in both metro and country areas and closed four. There are plans to close up to 10 stores in the current year.

Meanwhile, acting CEO Clinton Cahn has become the new chief of the business and will continue to perform his CFO duties until a replacement is recruited.

Cahn said the priority of FY24 is to continue growing sales by executing the retailer’s new merchandise strategy and continuing to expand its national store network.

“The macroeconomic environment is challenging and our business, like most Australian retailers, is facing a number of cost pressures,” he said.

“While we are focussed on managing the challenges associated with operating in a rising cost environment, we also recognise the important role that The Reject Shop plays in helping our customers save money during a time when so many Australians and their families are facing a significant cost of living pressures.”

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