Several possible reasons for Countdown closures, says First Retail Group

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The closure of six Countdown supermarkets had to be seen within the wider context of the dynamic supermarket industry, a retail analyst says.

Progressive Enterprises, which owns the Countdown chain, will shut the supermarkets following a decision by its Australia parent, Woolworths, to close 27 underperforming stores within its network.

Only one of the supermarkets to be closed was named, Countdown Rangiora Central which will shut in October. The rest would not close until after June next year.

A Countdown spokesman, James Walker, said it also had to be noted that the company was still opening new stores, with three more due this year.

Retail analyst Chris Wilkinson said many New Zealand subsidiaries of Australian businesses seemed to be doing better than their parents.

“New Zealand’s actually quite resilient and it’s the home base that’s having their own problems.”

The country’s two major supermarket companies were also usually fiercely territorial about their properties so the closures possibly reflected a degree of relaxation.

There was a lot of duplication stemming from a time when Woolworths had been rolled into the Countdown brand.

“Looking at Johnsonville, for instance, where you’ve got a Countdown in the mall and a Countdown on the main street. But then the reality is, if they pull one of those sites, without a doubt, Foodstuffs will go in there.”

However, Foodstuffs had put increased focus on improving its existing sites, so in areas where Countdown and Foodstuffs both had a healthy presence, “it’s clear Countdown can relax its grip”.

Other factors in why a supermarket might open or close could be an area’s discretionary spending or high growth. Many older supermarkets were less economic to run and other companies like Briscoes were making big savings from new buildings.

Countdown also had a number of new supermarkets on the way, Wilkinson said. In the Wellington area alone Courtenay Place and Aotea were being built, Lambton Quay had just opened, and in Hamilton and Ponsonby new stores had recently opened.

Meanwhile, Progressive’s rival Foodstuffs – which owns Pak ‘n Save, New World and Four Square – has announced it will spend more than $200 million on new stores and refurbishments.

The company will upgrade 11 existing stores includng New World in Wellington’s Willis St, and open seven new stores, including Tauriko in Tauranga, Te Kuiti, Papakura and Napier.

In the South Island, three new stores were being built: a New World in Ferry Rd, east Christchurch, a Pak ‘n Save in Queenstown and a Four Square in West Melton. All three would open the spring, and five other stores would be upgraded.

Foodstuffs (North Island)’s new general manager of property management, Lindsay Rowles has worked for both Woolworths and ALDI in Australia and said retailers were getting sharper about adapting to meet customers’ needs.

Foodstuffs said it could not confirm how many jobs it would create, but it would be at least 300 to 400.​

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