Briscoes boss Rod Duke speaks of ‘crime explosion’, lifting game to compete with Costco, Ikea

Briscoe Group managing director Rod Duke told investors today that the company is ready for international retailers in NZ. Photo / Dean Purcell

Rod Duke told shareholders the Briscoe Group will have to lift its game in light of international competition from the likes of Costco and Ikea.

The group’s managing director spoke at the retailer’s annual general meeting in Auckland central today where shareholders expressed concerns about international retail competition coming to New Zealand.

Duke said Ikea were “terrific retailers” but would not be direct competition.

“We don’t sell furniture but we’ll be keeping an eye on them.

“They will be a great addition to NZ’s retail scene. We’re going to have to lift our game,” Duke told shareholders.

The home and sportswear retailer posted unaudited first-quarter sales of $181.2 million last week, up 2.8 per cent on the same quarter last year.

Homeware sales were up 2.9 per cent at $109.9m while sportswear sales were at $71.3m up 2.78 per cent.

The company’s share price was down 4c today at $3.96.

In response to competition from Costco, he said its competitors would be the likes of food wholesalers such as Gilmours, especially in major cities.

“I don’t think they’ll be a direct competitor,” Duke told shareholders.

“I don’t see them being a big seller of Nike and Adidas but they will be a competitor, especially in Auckland and Wellington.”

“If you’re in the food business, you’d be really worried,” Duke said.

Costco opened its doors in Westgate, Auckland last September while Ikea has not opened a local store yet.

The Herald previously reported that Ikea planned to open its first NZ store in Mt Wellington, Auckland in December 2024.

He assured shareholders the company does not plan to switch to self-service in stores, when a shareholder told Duke: “Don’t do self-checkouts.”

“I promise you when it comes up, I’ll vote against it,” Duke responded.

Another shareholder’s concern was the lack of outlets in regional locations such as Masterton.

Duke said the company is focused on refurbishing existing stores but increasing demand in smaller areas meant Rebel Sport stores may be on the cards for greater Wellington.

He said decreases in sales across Auckland and Wellington have shown the bite from the cost of living crisis but flexibility across the group’s homewares and sports brands meant sales were likely to stay consistent.

Resilience

Group chair Dame Rosanne Meo said the pandemic has shown the company’s ability to survive adverse economic conditions.

“Our business model and operations were thoroughly stress-tested by the pandemic,” she told shareholders.

She said the group’s results showed the company was robust and resilient.

“We have specialised streams of retailing, not departmental which is struggling globally.”

Meo said homeware and sports goods were not just for “fanatics” but for day-to-day use.

Duke said Ikea are “terrific retailers” but would not be direct competition to Briscoe Group. Photo / NZME

“Explosion in crime”

Chief financial officer Geoff Scowcroft said $3m in goods were stolen every year from its stores, alongside increasingly abusive behaviour towards staff.

He said a tight labour market, increased wages across two consecutive years and an “explosion in crime” had driven up operational costs.

Scowcroft said the retailer suffered seven ram raids and 12 internal store attacks in the last year.

“There is increasing abuse and aggressive behaviour in-store faced by our team,” he told shareholders.

“Our team have to face this behaviour day in and day out.”

The group implemented security measures like licence plate recognition, bollards, silent alarms and high-quality security cameras, Scowcroft said.

He said the company was also eager to implement facial recognition systems to bolster security measures.

Duke said the company was spending an extra $1m a year on security.

He told the Mike Hosking Breakfast Show on Newstalk ZB the current retail crime situation was the worst he’d ever seen.

The year ahead

Scowcroft said: “We aren’t under any illusions at all about how difficult it is” in the retail space.

Supply chain general manager Darren Porteous said the company was setting up two major distribution centres in the North and South Islands.

Briscoe intended to use these for direct shipment from suppliers and to manage online sales.

A sustainability strategy planned for the next year will also include solar power and rain catchments in a move to assure customers.

Duke’s response was less than enthusiastic: “I’m not looking forward to paying for it”.

Chief operations officer Andrew Scott said consumers wanted NZ businesses to stock sustainable products and now chose to shop with retailers “on the basis of doing the right thing”.

The company planned to release its first climate change disclosure report and monitor supply chain ethics.

Duke said he expected NZ retail to be sensitive to deteriorating economic conditions and “political uncertainty” ahead of this year’s election.

“We don’t underestimate the difficulty of the trading environment. It will be difficult to replicate our record sales,” he told shareholders.