PC62 COUNTDOWN SUPERMARKET RICHMOND RETAIL ECONOMIC REVIEW - TASMAN DISTRICT COUNCIL
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A
Appendix 9
Project No: 51503
PC62 COUNTDOWN
SUPERMARKET RICHMOND
RETAIL ECONOMIC REVIEW
Date: August 2016
Client: TASMAN DISTRICT COUNCIL
W: www.propertyeconomics.co.nz E: info@propertyeconomics.co.nz P: 09 479 9311 A: 1/44D Constellation Drive, Rosedale 0632SCHEDULE
Code Date Information / Comments Project Leader
51503.4 August 2016 Report Tim Heath
DISCLAIMER
This document has been completed, and services rendered at the request of, and for the purposes
of Tasman District Council only.
Property Economics has taken every care to ensure the correctness and reliability of all the
information, forecasts and opinions contained in this report. All data utilised in this report has
been obtained by what Property Economics consider to be credible sources, and Property
Economics has no reason to doubt its accuracy. Property Economics shall not be liable for any
a
Economics. It is the responsibility of all parties acting on information contained in this report to
make their own enquiries to verify correctness.
Copyright © 2016 Property Economics Limited.
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2TABLE OF CONTENTS
1. INTRODUCTION..................................................................... 4
1.1. EXPERT CONFERENCING .................................................. 4
2. AGREED TRADE IMPACT TABLES ............................................. 4
3. SYNOPSIS ............................................................................ 9
3.1. CENTRES OF CONCERN .................................................. 10
4. SUBMISSIONS .................................................................... 13
APPENDIX : 1 JOINT WITNESS STATEMENT 1 ............................. 14
APPENDIX 2: JOINT WITNESS STATEMENT 2 ............................... 17
APPENDIX 3: WOOLWORTHS RECENT ANNOUNCEMENT ................ 19
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31. INTRODUCTION
Property Economics has been engaged by Tasman District Council (TDC) to undertake a retail
economic review of proposed Plan Change 62 (PC62) predominantly involving the development
of a new Countdown supermarket in Richmond. This is a follow-up paper to a previous
economic peer review Property Economics completed in June 2015 for TDC which highlighted a
application.
This has flowed on to the current process where the Commissioner for the upcoming Council
hearing directed the retail economic experts of the respective parties involved in the hearing to
conference in an attempt to agree on percentage supermarket impacts, or at the very least see
if agreement can be reached on the likely range of impacts generated as a result of the PC62
application in an attempt to reduce the areas of retail economic disagreement at the hearing.
1.1. EXPERT CONFERENCING
There were two conferencing sessions undertaken with both producing agreed Joint Witness
Statements, with the second conferencing session reaching an agreed range of percentage
impacts on the Richmond Town Centre and the Stoke Centre, the agreed two centres of
primary concern. The Joint Statements are attached as Appendix 1 and 2 respectively, while the
agreed impact spectrum is discussed in detail in the body of this paper.
This report essentially follows on from those statements and outlines my position in relation to
what I consider the most likely percentage impacts generated as a result of the PC62
application, and the flow-on retail economic implications of those impacts.
For expediency this review will not reiterate what has been covered in the Joint Witness
Statements. This paper will also briefly respond to retail related submissions on a topic basis
given the overlap in retail submission points.
2. AGREED TRADE IMPACT TABLES
As alluded to in the preceding section, the retail economic experts agreed the direct trade
impact spectrum outlined in Tables 1-4 reflected the percentage impact spread experts
considered the trade impacts generated by the proposal were likely to fall. It is my
understanding each expert would outline in their evidence for the Council hearing where they
consider, within the agreed impact spread, the trade impacts of the proposal a likely to fall in
their expert opinion, and what the subsequent flow-on retail distribution impacts on the Stoke
and Richmond centres (if any) are likely to be.
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4Table 1 sets out the agreed market baseline for 2018 (the agreed base year for impact
assessment). This involves the relevant supermarket store sizes and the estimated fall in
baseline sales as a result of the introduction of the consented Richmond South New World into
the market. In essence, the percentage impacts in the tables represent the direct trade
competition impacts only and not the retail distribution impacts.
TABLE 1: MARKET BASELINE, STORE SIZE WITH NEW WORLD IMPACTS
Without Without
Estimated Trade Estimated Impact
Richmond CD Richmond CD with GFA (sqm)
Impact $m of NW %
and NW Richmond NW
2018 2018 2018
Richmond Pak'n Save $106.1 $88.6 $17.5 -16.5% 6,500
Richmond Fresh Choice $29.1 $23.9 $5.2 -18.0% 2,280
Richmond Countdown $0.0 $0.0 $0.0 3,200
Richmond South New World $0.0 $35.9 3,802
Richmond grocery stores $7.7 $6.5 $1.1 -14.6%
Stoke Countdown $36.6 $34.5 $2.0 -5.6% 2,700
Stoke New World $31.8 $30.0 $1.8 -5.6% 2,700
Stoke grocery stores $11.3 $10.7 $0.6 -5.6%
Nelson CBD supermarkets $116.7 $114.0 $2.7 -2.3%
Nelson grocery stores $12.2 $11.9 $0.3 -2.3%
All Other (incl Tasman) $116.0 $111.4 $4.6 -3.9%
Total $467.5 $467.5 $35.9
The impacts identified in Table 1 are the direct estimated trade impacts of the consented but
yet to be implemented Richmond South New World on the relevant stores in the market. This
is important to determine as a precursor to assessing the proposal as both the trade, and
subsequent flow on retail distribution, effects as a result of Richmond South New World
play out
As such, it is considered important to assess the cumulative effects of both the Richmond South
New World and the proposed Richmond consequential
effect of PC62 on the market.
Table 1 shows the establishment of the Richmond South New World by 2018 is estimated to
have its greatest trade impact on the Richmond Town Centre, generating trade impacts (or
diverting) nearly $24m in 2018. is the supermarket estimated to incur the greatest
individual trade impact of $17.5m in 2018, and the Fresh Choice supermarket $5.2m for the same
year.
A concern I have with these impact (240%
higher) relative to Fresh Choice, when the New World brand and pitch (or price point) in the
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5the potential for the Fresh Choice supermarket to be impacted to a greater level nominally than
indicated in Table 1 is high, albeit the total combined trade impacts on the Richmond Town
Centre supermarkets appear appropriate. This makes the estimated Fresh Choice trade impact
identified conservative in my view.
It is worth noting Covec, an economic consultancy who provided the retail impact assessment
for the Richmond South New World application but not party to this hearing, estimated the
Richmond South New World trade impact on Fresh Choice Richmond to be 27%, well above
Table 1 s 18% due to their more like brand position in the market (relative to Pak N Save).
Conversely, Covec s estimated trade impact on Pak N Save Richmond (as a result of Richmond
South New World being developed) was less than 10% (compared to Table 1 s 16.5%).
As such, Covec considered the likely proportional trade impact on Fresh Choice Richmond to be
significantly greater than Table 1. This provides additional context in which to consider
Richmond South New World s potential effects which are yet to be absorbed by retailers in the
market. I would agree that the likely direct trade impacts of Richmond South New World on
Fresh Choice Richmond are likely to be closer to 27% rather than 18%, with the trade impact on
Pak N Save Richmond adjusted down commensurately.
This is important to note as it affects (decreases) the estimated trading performance of the Fresh
Choice supermarket in the subsequent tables, making the store more vulnerable than identified
on an individual store basis.
TABLE 2: POTENTIAL COUNTDOWN IMPACTS - HIGHER IMPACTS ON RICHMOND
Sales With Cumulative Impact Richmond CD
Impact of Richmond CD
Richmond CD and NW
2018 $m % $m $/sqm %
Richmond Pak'n Save $80.2 -$8.3 -9% -$25.9 $12,300 -24%
Richmond Fresh Choice $20.8 -$3.1 -13% -$8.3 $9,100 -29%
Richmond Countdown $26.6 $26.6 $26.6 $8,300 n/a
Richmond South New World $31.3 -$4.6 -13% -$4.6 $8,200 -13%
Richmond grocery stores $5.8 -$0.7 -11% -$1.8 -24%
Stoke Countdown $31.7 -$2.9 -8% -$4.9 $11,700 -13%
Stoke New World $27.5 -$2.5 -8% -$4.3 $10,200 -13%
Stoke grocery stores $9.8 -$0.9 -8% -$1.5 -13%
Nelson CBD supermarkets $111.4 -$2.7 -2% -$5.4 -5%
Nelson grocery stores $11.7 -$0.2 -2% -$0.5 -4%
All Other (incl Tasman) $110.6 -$0.9 0% -$5.5 -5%
Total $467.5 $0.0 0%
higher on Richmond stores (and by default Richmond Town Centre). In essence these
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6percentages represent the upper end of the direct trade impact spectrum for the Richmond
Town Centre.
The key column in Table 2 is the end percentage column with the estimated cumulative impact
(Richmond South New World and proposed Countdown). The estimated trade impacts under
this scenario range between 24%-
stores. Combined this equates to a nominal trade impacts of $36m from these store types alone
(excluding Richmond South New World as its not part of the Richmond Town Centre).
Table 1, column 1 identifies that in 2018, these stores types in the Richmond Town Centre are
anticipated to capture $143m in sales nominally. Diverting $36m from these store types equates
to direct trade impact of 25%. This represents a meaningful impact on these store types.
Considering flow-on impacts across other stores, this scenario is likely to equate to a retail
distribution trade loss for the centre in dollar terms of over $40m in 2018, i.e. $40m of trade that
would have expected to be spent in the Richmond Town Centre would be diverted away from
the centre.
and vibrancy afforded the community, lowering its pping destination
and may result in some retailers reconsidering the location as the retail centre to locate their
store.
While in my view the extent of these impacts is beyond (slightly higher) what I consider the
likely outcome, it does represent a potential outcome as agreed by the experts.
TABLE 3: POTENTIAL COUNTDOWN IMPACTS AVERAGE IMAPACTS ACROSS STOKE /
RICHMOND
With Richmond Impact of Richmond Cumulative Impact Richmond CD
CD CD and NW
2018 $m % $m $/sqm %
Richmond Pak'n Save $83.0 -$5.6 -6% -$22.8 $12,750 -22%
Richmond Fresh Choice $21.8 -$2.1 -9% -$7.2 $9,550 -25%
Richmond Countdown $26.9 $26.9 $26.9 $8,400 0%
Richmond South New World $32.7 -$3.2 -9% -$3.6 $8,600 -9%
Richmond grocery stores $6.1 -$0.5 -7% -$1.6 -20%
Stoke Countdown $29.0 -$5.6 -16% -$7.6 $10,700 -21%
Stoke New World $25.2 -$4.8 -16% -$6.6 $9,350 -21%
Stoke grocery stores $9.2 -$1.5 -14% -$2.1 -19%
Nelson CBD supermarkets $111.4 -$2.7 -2% -$5.4 -5%
Nelson grocery stores $11.7 -$0.2 -2% -$0.5 -4%
All Other (incl Tasman) $110.6 -$0.8 0% -$5.4 -5%
Total $467.5 $0.0 0%
Table 3 represents a scenario where impacts are spread more evenly across the market and the
existing store provision, and middle of the road average of the other
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7two scenarios. Estimated cumulative direct trade impacts range between 19%-21% on Stoke
supermarkets and grocery stores, while the range for the same Richmond Town Centre store
types is 20%-25%. on each store, and the
centre as a whole.
Under this scenario the direct trade impacts (or loss of sales) from the Stoke Centre is estimated
to be $16.3m in 2018, while the trade loss from Richmond Town Centre is estimated at $31.6m
for the same year.
The proposed PC62 Countdown store by itself is estimated to divert nearly $27m away from
Table 4 applies a scenario where the proposed Countdow
proportionately more on Stoke supermarkets, and by default centre. This results in Stoke
Countdown and Stoke New World experiencing the highest cumulative proportional impact of
28% each, with a further 24% trade impact on Sto
2018, with 80% of this sales decline as a direct result of the proposed Countdown supermarket.
With no additional supermarkets, Stoke Countdown and Stoke New World are estimated to be
trading at sales levels of $35m and $30.4m annually respectively in 2018. These fall to $24.7m
(Stoke Countdown) and $21.4m annually in 2018.
TABLE 4: POTENTIAL COUNTDOWN IMPACTS - HIGHER IMPACTS ON STOKE
With Impact of Richmond Cumulative Impact Richmond CD
Richmond CD CD and NW
2018 $m % $m $/sqm %
Richmond Pak'n Save $85.7 -$2.9 -3% -$19.8 $13,200 -19%
Richmond Fresh Choice $22.8 -$1.0 -4% -$6.2 $10,000 -21%
Richmond Countdown $27.1 $27.1 $27.1 $8,500 n/a
Richmond South New World $34.1 -$1.8 -5% -$2.6 $9,000 -5%
Richmond grocery stores $6.3 -$0.2 -3% -$1.3 -17%
Stoke Countdown $26.3 -$8.3 -24% -$10.3 $9,700 -28%
Stoke New World $22.8 -$7.2 -24% -$9.0 $8,500 -28%
Stoke grocery stores $8.6 -$2.1 -20% -$2.8 -24%
Nelson CBD supermarkets $111.4 -$2.7 -2% -$5.4 -5%
Nelson grocery stores $11.7 -$0.2 -2% -$0.5 -4%
All Other (incl Tasman) $110.7 -$0.7 -1% -$5.3 -5%
Total $467.5 $0.0 0%
Additional to Stoke supermarkets and grocery stores direct trade impacts are likely flow-on
retail distributional impacts for the centre. This is estimated to increase the total impact the
Stoke Centre will be required to absorb.
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8Considering flow-on impacts across other stores in Stoke, this scenario is likely to equate to a
retail distribution trade loss for the centre in dollar terms of around $25m in 2018, i.e. $25m of
trade that would have expected to be spent in the Stoke centre would be diverted away from
the centre. This quantifies, and represents a fall in, the Stoke C
vibrancy afforded the community, lowering its , and
like for Richmond may result in some retailers reconsidering the location as the retail centre to
locate their store.
3. SYNOPSIS
In my view, the scenario that has the highest proportional impact on Stoke (i.e. Table 4)
represents the closest scenario to the most likely outcome. The main reasons for this are that
making it easy for shoppers to transition from the Stoke Countdown to the proposed new
Countdown store, i.e. in my opinion the transferability of shoppers from the same branded
supermarket is higher than from a different supermarket brand due to, in this instance,
generate. Consumers also have more
familiarity with the product lines, prices, layout, better parking, better retail store and
environment, etc., all making any transition much more seamless.
Further to this is that the proposed Countdown store, and the Stoke Countdown store have
significant overlap in their respective core trade catchments, i.e. they serve a significant
proportion of the same market. This by itself is not problematic, but when considered in
combination to the total number of supermarkets servicing the wider market, on a cumulative
basis this has the propensity to generate wider issues.
Building on this line of enquiry, I have compared, at a broad level, the number of supermarkets
across a variety of markets I am familiar with and recently assessed on a per capita basis for
to the PC62
application, but when considered in combination with the other analysis provides a useful base
context and guidance when assessing the risk of PC62 to undermining the current existing
provision with the application included.
Supermarket
Area
Per Capita Ratio
Auckland 1 : 14,300
New Plymouth 1 : 8,800
Nelson / Tasman 1 : 8,100
Hamilton 1 : 12,900
Kapiti Coast 1 : 8,500
Note the per capita ratio for Nelson / Tasman above includes the Richmond South New World
and the proposed Richmond Countdown in PC62.
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9The larger urban areas of Auckland and Hamilton generate higher per capita ratios due to their
greater population base and densities. Greater market size also translates to greater market
potential (or annual sales), increased competition, greater potential for market efficiencies and
therefore both the requirement and ability to investment in a higher quality supermarket offer
and environment.
Conversely, the comparative smaller districts have lower supermarket per capita ratios, or
reduced market size and potential. Interestingly, when assessing the quality of the supermarket
stores, offer and environments across these smaller district, in general the quality is inferior with
some stores very tired / dated and not affording the community a high level of amenity. Many
stores in these areas are used by default and on the basis that the alternative is likely more
distant and potentially not significantly greater in terms of quality.
Nelson / Tasman would have the lowest supermarket per capita ratio of the assessed areas if
Richmond Countdown were to be developed, which given the low quality of some of the
supermarkets in New Plymouth and Kapiti Coast in particular, raises concerns for me about the
quality of the remaining smaller, older, in-centre supermarkets and their ability to be
competitive in an increasingly competitive market.
In respect of forecast population growth for Tasman over the next 10 years for context, the area s
population base is projected to increase by less than 3,000 people net. This highlights only
tepid growth in demand, indicating nominal population growth should not be viewed as the
primary driver of justify PC62.
3.1. CENTRES OF CONCERN
Richmond Town Centre:
This centre contains two supermarkets Save and Fresh Choice. The centre also contains
three other major retail anchor (department) stores Farmers, The Warehouse and Kmart. This
brand cluster
here is also a significant wider retail and commercial provision making the centre the
primary commercial destination for the Tasman District.
The most vulnerable store within the Richmond Town Centre as a result of PC62 in my view is
the Fresh Choice supermarket. It will be significantly smaller (over 30% or 1,000sqm GFA) than
the proposed Richmond Countdown. This means it will be older and smaller than the proposal
making it more difficult to compete against, particularly given there is significant catchment
overlap with the stores. As already discussed earlier in this report, this supermarket is more
vulnerable than Table 1 estimates, with direct trade impacts likely to be higher than indicated.
As a worst case scenario, if the Fresh Choice supermarket were to close as a result of PC62 being
developed, there will clearly be a loss of trade, amenity, vitality and vibrancy in the centre, but in
my opinion not to a level that will generate a significant adverse retail distributional effect on
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10the centre as a whole given its other supporting anchor stores. The strength of many of the
stores across the balance of the centre gives me confidence Richmond Town Centre could
absorb the determined trade and any flow-on distributional impacts without any significant
consequential effects.
Stoke Centre:
Stoke Centre is a supermarket anchored centre primarily servicing the retail and commercial
service convenience requirements of the surrounding suburbs. The supermarkets in Stoke are
critical to the centre s performance and function, and its ability to operate as a successful
community focal point for convenience retail and commercial services.
On viewing the retail offer and environment of Stoke Centre, in my assessment it is not what I
would consider a well performing centre. There appears to be many tenancies that survive
rather than thrive or trade successfully, and across the board there has been a significant lack of
ce and environment not
meeting modern day consumer expectations or fulfilling its market potential given the size of
the market it is designed to service. Any weakening of this centre in terms of trade and
visitation would have a greater impact compared to a better performing centre with the same
proportional impact.
In this regard, the important consideration for a centre to absorb trade impacts, is or
health of the receiving environment. In this instance, in my view the Stoke Centre is not
considered a strong centre in terms of trade (performance), quality of offer and quality of
environment, and in my view is a centre where significant distributional effects have the
potential to be realised on the basis Table 4 impacts materialise.
The smaller, older Countdown supermarket in Stoke in my view would struggle to maintain a
significant proportion of its consumer base if a larger, new Countdown supermarket were
developed a few kilometres down the road with easy accessibility, better parking, and better
environment. This is particularly the case in a market that is already well serviced by
supermarkets. As identified earlier, the Nelson / Tasman market is already well serviced for
supermarket provision, so the market is not currently disenabled for such store types in any way.
The proposal can only lead to redistribution and trade diversion of spend out of centres into a
new standalone location.
Furthermore, the proposed location of the new Countdown supermarket has never been
identified in any Council planning documents that I have reviewed as a site for a future centre.
While this again is not fatal to the application in its own right, it does show the resulting land
use activity is not something the Council (or community) has planned for.
I am also aware the applicant has indicated that they have no intention of closing down Stoke
Countdown (or Fresh Choice Richmond for that matter) as a result of the development, but I am
not aware of anything in the application that would bind the applicant to th
may represent the current position, but that can quickly change for example with the
introduction of a new manager who may change the company focus and strategy.
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11Additionally, there has also been a recent article on the Stuff website where Progressive
Enterprises management in Australia have indicated around six (unidentified) underperforming
stores in NZ will be closed (in combination with a number of Australian stores). This clearly
indicates store performance and ongoing viability of each store will be an important factor in
stores remaining open, and if a store is deemed to not be meeting expected performance
standards then there is a now a strong likelihood it may close - no matter what the location
(centre or non-centre). This is
many top retail brands would apply.
and environment. This lowers the local community s economic wellbeing and social amenity
the centre offers the community, despite the centre being a crucial community focal point. Any
material degradation of trading levels in Stoke at this point raises real concerns for me about the
quality of the retail provision and centre post Richmond Countdown opening. If the centre was
higher performing my concerns would be more muted.
Supermarkets generally operate at low margins, selling large quantities and competing strongly
on price. These low margins inevitably mean that the proportion of fixed costs for this structure
will be low as turnover is required to be high to meet them. The need to sell high quantities of
goods to meet these costs does not provide supermarkets with any greater flexibility in terms of
meeting these costs than other retail forms (in fact given their high level of price competition it
is quite the opposite).
A struggling supermarket is likely to provide less economic and social benefits to a centre and
its community than one that is able to operate effectively. This pertains to the statements above
relating to a quality of retail rather than simply not having a retailer close down. For example, in
a low quality centre that does not exhibit a level of vitality through patronage, market position
would suggest that any vacancies will eventually be filled by some form of activity, unfortunately
this is often in the form of low quality ($2 shop type retailers) creating an environment that
reduces community well-being.
Given this, and my view that the trade impacts identified in Table 4 are the set of impacts
closest to those most likely to be realised impacts, there is real potential for significant adverse
impacts on the performance, function and quality on the Stoke Centre and environment to be
generated. While it appears the Stoke Countdown supermarket could remain open, it would be
trading at low levels undermining the quality, function and amenity of the centre. The same
applies to Stoke New World.
Other concerns noted from the agreed impact table (Table 4) is that the proposed new
supermarket is estimated to trade at a productivity 27% lower than the older dated Countdown
supermarket in Stoke. This would appear to make the sales level of the new store conservative
comparatively. Also the percentage impacts on Stoke Countdown and Stoke New World are
exactly the same. This seems unlikely with Stoke Countdown more likely to see diversion of
shoppers than New World in the situation where a new Countdown store is being developed.
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124. SUBMISSIONS
There are few submissions related to PC62 retail economic matters and these tend to focus on
there being no need for another supermarket in the area, and the potential effects on the
existing centres. This has been well covered in my earlier comments with the supermarket per
capita ratio indicating there is some merit to the submissions relating to there being no
requirement for additional supermarket provision in Richmond. The community is not currently
disenabled by a lack of supermarket provision meaning the proposal represents duplication of
resources rather than an efficient allocations of resources to service an unmet requirement. It
also represents a redistribution of resources to an out-of-centre location.
Another theme in the retail related submissions was that another supermarket would be
detrimental to other established businesses in the area. I assume this relates to both
supermarket businesses and other food and grocery businesses in the area. Given PC62 is an
out-of-centre and will redirect from existing businesses, it will have a detrimental effect by
default to varying degrees. However, the key question is whether these detrimental effects ,
which are in effect direct competition effects, are large enough cumulatively to roll-on and
become wider retail distributional effects under the RMA.
The RMA is not designed to stop trade competition between stores or apply any protectionist
regime. Even some store closures can be acceptable under the RMA if no significant wider retail
economic distribution effect, or net economic benefits for the community result. As discussed
earlier, while in my view there is unlikely to be mass store closures as a result of the likely trade
competition effect, I remain concerned about the vulnerability of the retail provision in Stoke if
Countdown Richmond is developed, and its potential effect on the quality of the stores in the
centre, its adverse impact on the environment (built form and public realm) and its ability to
function and operate as a successful community hub.
On balance, while the proposal by itself may not generate any significant or fatal trade impacts
on the centre network when considering the effects and potential outcomes in the round.
However, my concerns remain that the quality of the retail provision in the centres will be
lowered to a concerning level that will degrade the ability of the Stoke Centre to successfully
play its role and function in the market.
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13APPENDIX : 1 JOINT WITNESS STATEMENT 1
RECORD OF CONFERENCING OF ECONOMIC EXPERTS FOR
PLAN CHANGE 62
2016 at 10am
ATTENDEES:
Derek Foy (Market Economics, for Progressive Enterprises)
Mark Tansley (Marketplace NZ, for Progressive Enterprises)
Mike Cullen (Urbacity, for Nelson City Council)
Tim Heath (Property Economics, for Tasman District Council)
Mike Copeland (Brown Copeland, for Tinline Properties, by phone)
SCOPE
This document records the key matters discussed at conferencing and the position of each
party on each matter.
MATTER 1: SUPERMARKETS AND CENTRES
All parties agree that town centres are the most appropriate, but not the only appropriate
location for supermarkets.
MATTER 2: GROWTH PROJECTIONS
All parties agree that any assessments undertaken for the Council hearing should be based on
the latest Statistics NZ population and household projections, and should use the medium
scenario growth series at a Census Area Unit (CAU) level. All parties also agreed that it is only
necessary to consider the period out to 2023, and that longer term projections are not relevant
to assessing impacts.
The relevant population projections are published on the Statistics NZ website at:
http://nzdotstat.stats.govt.nz/wbos/Index.aspx?DataSetCode=TABLECODE7523
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14The relevant household projections have not been published on the Statistics NZ website, but
will be circulated by Derek separately, having already sourced these directly from Statistics NZ.
MATTER 3: STATUS OF RICHMOND SOUTH NEW WORLD
All parties agree that the Richmond South New World (which has been consented, but not yet
built) forms part of the consented baseline, and the existing environment, and should be
included as such in any assessment. The parameters of the consented development that all
parties will apply in their assessments are a total GFA of 3,798m2 (3,263m2 ground floor and
535m2 first floor), with two additional freestanding retail units (GFA of 163m2 + 209m2 = 372m2).
MATTER 4:
Mike Copeland is of the opinion that the loss of sales from a town centre, if significant, can lead
community. Such negative effects can occur even where the businesses within the town centre
continue to trade, but there is a lower level of activity in the centre. The significance of the
detriment is not necessarily a function of the strength of the centre prior to the establishment of
competing out of centre development.
The four other experts assert that the significance of the detriment is related to the strength of
the centre prior to the new development, so that a poorly performing centre will experience a
more significant detrimental effect (such as in
MATTER 5: INTERPRETATION OF IMPACTS
All parties agree that a key issue is the quality of environment that will exist post the opening of
the proposed development. This quality includes the type of stores operating, people activity
and amenity provided to the community.
MATTER 6: POTENTIALLY AFFECTED CENTRES
All parties agree that the only centres on which effects need to be assessed are the Richmond
and Stoke town centres.
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15MATTER 7: ATTEMPT TO REACH AGREED POSITION ON IMPACTS
Only Tim Heath and Derek Foy intend to undertake assessments of the expected direct impacts
on the potentially affected centres (in Matter 6 above). Those experts will attempt to reach an
agreed position on those impacts, in the form of a range of potential impacts (in percentage
terms). Other parties (Tansley, Copeland, Cullen) envisage then being able to refer to those
agreed ranges in their assessments of the implication of the RMA effects on the potentially
affected centres.
This record has been circulated to and agreed by all attendees
Dated Monday 30 May 2016
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16APPENDIX 2: JOINT WITNESS STATEMENT 2
RECORD OF CONFERENCING OF ECONOMIC EXPERTS FOR PLAN
CHANGE 62
ATTENDEES:
Derek Foy (Market Economics, for Progressive Enterprises)
Mark Tansley (Marketplace NZ, for Progressive Enterprises)
Mike Cullen (Urbacity, for Nelson City Council, by phone)
Tim Heath (Property Economics, for Tasman District Council, by phone)
Mike Copeland (Brown Copeland, for Tinline Properties, by phone)
SCOPE
This document records the key matters discussed at conferencing and the position of each
party on each matter.
MATTER 1: TRADE COMPETITION IMPACT RANGES
Subsequent to the first economic conference, Mr Foy and Mr Heath reached a consensus
position on the trade competition effects of the proposed Countdown on other supermarkets in
Stoke and Richmond. That position was a range of impacts in dollar and percentage terms, and
was circulated to the three other experts for their review. All experts agree that trade
competition effects would be expected to fall within the consensus range. The consensus range
includes the cumulative effects of both the proposed Richmond Countdown and the consented
Richmond South New World.
MATTER 2: OPINIONS AS TO POSITION WITHIN CONSENSUS RANGE
While all experts have agreed with the consensus range, each expert will have an opinion as to
where within the range the trade competition impacts are likely to be. In conferencing, some
experts voiced different broad opinions as to where within the range they would expect impacts
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17to fall, however no positions in that regard have been finalised, and there was no further
consensus that would serve to narrow the range.
MATTER 3: IMPACTS ON RICHMOND FRESH CHOICE
DF, MC, MC and MT agree that the Richmond Fresh Choice supermarket will be the most
vulnerable to the cumulative effects identified in the consensus range. This is due to the Fresh
Choice store being located in between the two new/proposed stores (Richmond South New
World and Richmond Countdown), and being most similar to those stores in terms of function,
being a full service supermarket like the two new stores.
Mr Heath considers Richmond Fresh Choice and Stoke Countdown are equally vulnerable to the
cumulative effects identified in the consensus range for the reasons identified above, and also
the fact that he consi
well serviced by supermarkets.
Other stores will be likely to experience lower trade competition impacts. In the case of the
Stoke stores, that is because although they are also full service stores they are located further
away from the Richmond South New World (which is on the southern side of Richmond, while
Stoke is to the north). In th
service supermarket, and has a different market positioning.
MATTER 4: RELEVANT EFFECTS TO CONSIDER
All experts agree that the trade competition effects are not relevant in RMA terms, and it is the
flow-on effects that are relevant. These flow-on effects, and the implications for the potentially
-on
effects that might be relevant to consider include the vibrancy, vitality, and amenity of centres,
MATTER 5: IMPLICATIONS
While all experts agree on the range of trade competition impacts, there has been no consensus
reached as to the magnitude or implications of the flow-on effects that would arise from those
trade competition impacts.
This record has been circulated to and agreed by all attendees
Dated Thursday 21 July 2016
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18APPENDIX 3: WOOLWORTHS RECENT ANNOUNCEMENT
Woolworths Australia to close dozens of
stores, cut 500 jobs
PATRICK SCALA/FAIRFAX MEDIA
Woolworths Australia - which owns EziBuy and Countdown - is planning a large restructure that will result
in store closures and job losses.
Woolworths in Australia will slash 500 jobs and close dozens of underperforming stores in an almost $1
billion restructure.
The company, which also owns Countdown, has also separated its Big W department store chain from
online retailer Ezibuy, allowing it to explore a possible sale of Ezibuy.
Chief executive Brad Banducci, who started in the role in February, said a new operating model would see
long-term performance measures introduced, including 'sales per square metre' and 'return on funds
employed'.
There were "limited synergies" between Ezibuy and Big W, which was why the company decided
to separate the two, he said.
"In particularly in cases of Ezibuy there were dis-synergies and it made best sense to separate.
Banducci said combining the two had taken Ezibuy away from its core focus and the things that they are
good at, and dis-empowered the Big W team.
He said Ezibuy has had a challenging performance trajectory over the past few years.
Part of the challenges the business has experienced were driven by the changes with the exchange rate,
particularly between Australia and New Zealand, and also, between the US dollar and NZ dollar, he said.
Ezibuy sources a lot of its product from the United States.
He said it early days in the process to sell the business.
"It's a terrific brand and great brand franchise, in particular in New Zealand.
"We've come to realise given the absence of synergies...we're not the natural owners of the business.
"We've got to learn from everything we've done. we've got to make sure we take those lessons into future
decision making. It does make you pause and reflect."
Ezibuy started in Palmerston North in 1978 as a women's fashion and hardware retailer, and as well as its
online store it has shops in Auckland, Wellington, Christchurch and Palmerston North.
JOB LOSSES
About 500 jobs will be permanently removed from Woolies' support office and supply chain in Australia,
while 1000 people will be moved "directly into our businesses to improve accountability and help us better
support our store teams and customers," Mr Banducci said in a statement.
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19"Today's announcement demonstrates both the progress we are making and our absolute commitment to
act quickly to rebuild the business by doing the right thing by our customers, shareholders, team and
suppliers," he said.
The group review leads to restructuring costs of A$959 million (NZ$571 million non-cash) or A$766 million
(NZ$816) after tax to be recognised in 2015-16.
The company said its earnings before interest and tax from continuing operations, before significant items,
would come in between A$2.55 billion (NZ$2.72) and A$2.57 billion (NZ$2.74) for the year.
The restructure will see the supermarket giant close a total of 27 underperforming stores - 21 in Australia
and six in New Zealand. Three hotels will also close.
The company said the stores that would close were either "loss-making or in the bottom quartile" of sales
per square metre.
The company said the stores would be closed before the end of their lease term.
The store closures exclude Big W stores.
A further 34 underperforming stores were identified at a cost of $71 million to the retailer.
Store roll-out will also be slowed, with 45 new stores opening over the next three years, rather than the
planned 90.
Closing the stores will cost the retailer A$344 million (NZ$366m).
- With Sydney Morning Herald
Source: Stuff website
25 July 2016
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