Property editor of the NZ Herald

$100m supermarket spend for Foodstuffs

An architects' drawings for the New World supermarket at Kumeu.
An architects' drawings for the New World supermarket at Kumeu.

Foodstuffs (Auckland) has a $100 million development and refurbishment programme in the upper North Island and its property chief says demand for new supermarkets remains unsatisfied.

Angela Bull, property development general manager, named competition against rival Progressive Enterprises as the biggest prompt for the huge spendup.

"We're continuing to reinvest because it's very competitive and due to growth, certainly in the Auckland area. We owe it to our community. It's just prudent property practice," she said.

Today, New World, which is part of the Foodstuffs stable, reopens at Te Puke, where it first opened in 1978. Jon Morrison, owner-operator, said up to 30 staff would join the 70-strong workforce.

Latest Statistics NZ data showed there was $4.2 billion in grocery and supermarket retail sales for the March quarter and an annual $17 billion spend, up from $13 billion in 2004.

Rival business Progressive, with its Countdown chain, is also cashing in on rising spending, expanding in the upper North Island, and one industry executive said the only way New Zealand's tightly held supermarket duopoly could make more money was to open more stores.

The owner/operator modelled Foodstuffs and the corporate-owned Progressive are moving into each other's territory. For example, Foodstuffs has complete control of the major Albany grocery spend with its New World inside Westfield mall and its Pak'nSave next door.

Progressive has no presence there, even though it announced $100 million plans for a Countdown more than a year ago.

Foodstuffs' New World monopolises Devonport but Progressive has indicated its appetite for the lucrative area via its purchase of a Lake Rd site for a Countdown, depending on Auckland Council Property's moves to sell surrounding land.

Bull said the duopoly was actively pitched against each other.

"We're both being very aggressive," said the executive who leads a team of 19 people at the Mt Roskill headquarters, undertaking architectural, project management, interior layout design, resource consent and development strategy functions, although consultants are employed on projects too.

Asked about when New Zealand's northern region would have enough supermarkets, Bull said: "I don't know. It's not always about new stores. We are talking about reinvesting in our existing stores as well."

Bull, in her position for five years, is now leading work on the former PlaceMakers site at 110 Main Highway at Kumeu, redeveloped for a New World in a $15 million job, excluding the land purchase.

Around 20,000 customers a week are expected there, Bull said, and 120 people would be employed. After a fully notified plan change, resource consent was granted for a 2800sq m store with 165 carparks on State Highway 16.

The land had an industrial zoning before the plan change. Earthworks have been carried out with construction due to start in about a month ready for an opening next year.

On a 1.5ha site at Massey North, Foodstuffs is building a Pak'nSave of almost 6000sq m, over half a hectare, with 291 carparks and three shops planned on the land between Don Buck Rd Extension, Fred Taylor Drive and Rua Rd. The site slopes, so a basement, covered carpark will be built there.

"This will service the wider northwest area and we will get 30,000 to 40,000 customers per week. We think it will be similar in terms of population to Silverdale or Botany or Albany, a flagship store for the area," Bull said.

New Zealand's biggest Pak'nSave is Lincoln Rd's 10,000sq m, or 1ha, Henderson store. The new Massey North Pak'nSave would cater for growth in that part of Auckland, Bull said.

"Auckland is growing to the north-west so it's a logical place," she said.

Foodstuffs' biggest knockback lately was in the Coromandel, where local group Coro Mainstreet delayed its redevelopment plans for the Four Square.

Coro Mainstreet said the consent was inappropriately granted and did not adequately consider heritage values and traffic volumes.

Upgrades to Pak'nSaves in Tauranga and Hamilton are under way and due for completion by the end of this year.

Work on the Whangarei Pak'nSave will start in the next few weeks and an upgrade at Thames and Albany is planned.

Foodstuffs (Auckland)

* Managing director: Murray Jordan.
* Property GM: Angela Bull.
* Employs 1200 people in distribution centres/support offices.
* Supermarkets employ thousands more.
* Supplies 49 New World, 26 Pak'nSaves, 107 Four Squares.
* Also supplies 41 upper North Island Liquorlands, and supplies Gilmours Cash'n Carry.
Source: Foodstuffs (Auckland)

- NZ Herald

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