Bigger market impact from opening or closures?

  • Opinion
  • August 3, 2016
  • Paul Keane
Bigger market impact from opening or closures?

David Jones opened last week on Lambton Quay in Wellington, and at the same time Countdown announced they were to close six supermarkets throughout New Zealand.

So which one had the bigger impact on the market?

David Jones opened in appalling weather but that did not seem to hamper customer interest. From all accounts the opening last Thursday was a great success and in the trading days since they’ve continued to pull the visitor numbers. Locals have had the opportunity to see a department store from off-shore open in New Zealand.

So did David Jones live up to expectations? It really depends on what those expectations were.

The traditional staircase was replaced with escalators but the merchandise was really not a lot different than what one could buy elsewhere and in some instances cheaper. The offering seems to be of upmarket value and this may take a while for locals in particular to relate to.

Certainly Wellington has an advantage in that the store’s trade area basically contains a large number of high-earning corporate and government employees. However, the store is of such a size that it may fail to really attract the number of high end customers that it would like. Other than the name, David Jones offers no more than a Ballantynes in Christchurch or a Smith & Caughey’s in Auckland.

The closure of the proposed six Countdown supermarkets was initially pursued with interest by the media and then quickly disappeared as a real news item.

The competition between the major supermarket operators in New Zealand - that is Progressive who own the Countdown and other lesser known brands, and Foodstuffs who own Pak’n Save and New World - compete fiercely for business. As I was explaining to one media outlet last week, supermarkets protect their respective patches with a fierce determination.

Closure of supermarkets is indeed uncommon.

There is a risk that a closure may mean a loss of market share in a particular community trade area. Both supermarket operators will want to ensure that the patch they abandon isn't going to be re-occupied by a similar operator in the future.

This is difficult to control, so the supermarkets to be closed by Countdown will be at the lower end of the performance factor. Rotorua and Napier are likely to be two of the areas that will see Countdown supermarkets close; there is no real benefit in having three supermarkets operating in Rotorua where population growth has been nil or negative over recent years.

However, this is not the only issue that the Countdown camp have to face.

It seems that Progressive owners' (Woolworths) purchase of Ezibuy was not the success that they expected; it now has the group on the market for sale. This may well be an opportunity for the Pepkor group out of South Africa who purchased the Postie Group last year.

So of the two announcements last week, the most influential on our market was by far the Countdown closure and Ezibuy sale.

Add to that the previous week’s closure of a Warehouse outlet in Wainuiomata, and the certainty of large store lease retention of is no longer certain. We will be watching this subject with interest over the coming weeks.

 Paul Keane is a registered property professional and has vast experience in New Zealand’s commercial property industries. He provides retail and property consultancy including development management to many New Zealand property owners, developers and city councils. This post originally appeared on RCG's blog.

This is a community discussion forum. Comment is free but please respect our rules:

  1. Don’t be abusive or use sweary type words
  2. Don’t break the law: libel, slander and defamatory comments are forbidden
  3. Don’t resort to name-calling, mean-spiritedness, or slagging off
  4. Don’t pretend to be someone else.

If we find you doing these things, your comments will be edited without recourse and you may be asked to go away and reconsider your actions.
We respect the right to free speech and anonymous comments. Don’t abuse the privilege.


Countdown’s top team members honoured at its annual trade show

  • News
  • September 22, 2019
  • The Register team
Countdown’s top team members honoured at its annual trade show

Tom Jones-Griffiths from Countdown Newmarket is the grocery chain’s Store Manager of the Year 2019. He was recognised among other winning team members in a ceremony at the company’s annual trade show in Rotorua.

Read more

A temporary slowdown

  • Opinion
  • September 21, 2019
  • Satish Ranchhod
A temporary slowdown

Westpac senior economist Satish Ranchhod discusses how household spending growth has slowed in early 2019.

Read more

Pams Pantry: The groundbreaking convenience store shaking up rural Canterbury

Dairies have a special place in the hearts of heartland New Zealanders, but now there’s a new format in town.


Social scoreboard

Zavy and The Register have worked together to create a scoreboard that compares how the top 25 traditional media advertising spenders in New Zealand have performed on social media over the past 30 days, updated in real time.

Concept to closet
Business coverage of New Zealand Fashion Week.
Regional rollercoaster
What does retail look like in 2019 for ...
Town centres
A positive retail environment over the past 12 ...
Amazon Arrival
Keeping up with all things Amazon as it ...
The Retail Yearbook 2017
As we battle our way through the busiest ...
The future is bright
We spoke with four retailers in their twenties ...
Hospitality enhancing retail
Some think food and integrated hospitality offerings will ...
Spotlight on signage
At first glance, the humble in-store sign might ...
Red Awards 2016
The Red Awards for retail interior design celebrate ...
Auckland Unitary Plan
Auckland is changing. The Unitary Plan will decide ...
How to open a store
Sarah Dunn considers what it would take to ...
All things to all people
Kiwi retailers share their omnichannel strategies.
Rising stars
Retail's top young achievers.
Delivering on your promises
The sale isn't over until your item is ...
Retail in heartland New Zealand
Retailers keep the regions pumping, but how strong ...
Women in retail help one another. We spoke ...
The changing face of retail
Shifting demographics are creating big changes in New ...
The retail yearbook
With the help of experts in the retail ...
Retail rogues
We put the spotlight on staff training. Jai ...
Here come the giants
Topshop has arrived in Auckland’s CBD, David Jones ...
From retail to e-tail
Ecommerce has become part of the way mainstream ...
Loyalty in the digital age
How are retailers maintaining loyalty? Sarah Dunn, Elly ...
Window shopping: A spotlight on social media
Sarah Dunn and Elly Strang look at how ...
The Innovators | In partnership with Spark Business
Technology is rapidly changing the retail industry as ...

Diamonds in a rhinestone world: How jewellers are holding fast

Pricier products from retail’s apparel segment are often described as an ‘investment purchase’, but finance professionals would disagree on most counts – except when it ...


Come and celebrate our industry with the who’s who of retail

  • News
  • September 19, 2019
  • The Register team
Come and celebrate our industry with the who’s who of retail

Our Gem Retail Hotlist is about celebrating the vitality and innovation of New Zealand’s retail sector. Get your free ticket and join our industry’s top retailers for the networking event of the year.

Read more

The simple excitement of inflatable advertising

  • News
  • September 17, 2019
  • Courtney Devereux
The simple excitement of inflatable advertising

Our advertising landscape continues to rotate around the growth of digital and how digital can be used to further capture the attention of viewers.Yet there is one type of adverting so simple, so primal, so no-nonsense that even in this computer run society it has survived. We’re talking here, about inflatable, or balloon, advertising.

Read more
Next page
Results for
About us.

The Register provides essential industry news and intelligence, updated daily. And the digital newsletter delivers the latest news to your inbox twice a week — for free!

©2009–2015 Tangible Media. All rights reserved.
Use of this site constitutes acceptance of our Privacy policy.

The Register

Content marketing/advertising? Email or call 022 639 3004

View Media Kit