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Retailers stay focused on profits, while banks abandon small communities

  • Opinion
  • September 27, 2016
  • Paul Keane
Retailers stay focused on profits, while banks abandon small communities

When one is at home recuperating, there is time to follow news as it breaks and become aware of the number of activities which affect our commercial lives without us realising it. I have observed that over the past few weeks one key factor has dominated our headlines: "profit". So what's wrong with that?

Nothing in my view, as long as the "profit" result is fair and reasonable to all parties. Let’s take a look at the results or inferences over the past few weeks.

Profit announcements

Briscoe Group had a profit announcement that pleased its investors once again after another healthy year. They have also been signalled as a potential buyer of the EziBuy Limited, which is being sold by its Australian owners Woolworths Limited.

The Warehouse Group also experienced a good result with a sales increase of 2.5 percent to $1.76 billion, and a profit of $79.6 million. Results by Noel Leeming Group and Warehouse Stationery (Blue Sheds) were significant and contributed markedly to the overall result. The collapse of Dick Smith earlier this year would certainly have helped the results.

Meanwhile, Veritas Investments, which owns The Mad Butcher and Nosh Food Market, has recovered marginally from what seemed like a significant downfall; but a profit of around $3 million plus leaves them a long way from being an effective retail opportunity. Probably another five years of hard labour will be needed to see the group recover.

Abandoning small communities

Meanwhile in the heat of profit announcements, almost every bank has announced the closure of outlets in small regional locations. Just why they wish to abandon their customers and extinguish their lifelines with special communities is beyond me. Why turn your back on a critical base of customer support that goes back a hundred years?

We all know that we seldom visit banks, but when we do a smile and support from bank staff is a welcoming gesture. More importantly, in small country regions a bank branch is part of the community. Surely keeping branches open in small communities will ultimately add more to the bottom-line profit than detract from it? I still have difficulty in coming to grips with why my bank charges me for having my money!

Let's be fair and reasonable

Over recent weeks I have raised the issue of the impact of retirement village costs on retirees, and I have been vocal as to the need for a sensible review of the profit generated. Whilst I don't want to revisit that subject this week, it has been apparent during my recovery that this group of investment vehicles are making significant profits.

Profits should be representative of the efforts of companies and their staff utilising their skills to improve the bottom-line results. Rewarding people who add value and being mindful of individuals’ contributions are crucial to the social benefits that profits generate. Making profits at others expense isn’t fair or reasonable and is a form of profiteering.
 

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.

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  • May 16, 2019
  • Radio New Zealand
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