Pak'nSave is undergoing expansion. Photo / Greg Bowker
Pak'nSave is undergoing expansion. Photo / Greg Bowker
New Zealand's two biggest supermarket chains plan a $200 million expansion drive between now and next winter - adding 14 stores nationally.
Foodstuffs North Island chief executive Chris Quin and Countdown property director Matt Grainger said the businesses each planned to spend around $100m from now till next July.
Quinsaid 10 new North Island stores would open before next July, including two new central Auckland New Worlds in existing leased buildings:
• $40m 5300 square metre Pak'nSave Warkworth, opening mid-2023; • $26m New World Havelock North, opening 2024; • $7.5m 900sq m New World Newmarket, opening October 4; • $5m 1000sq m New World Britomart, opening early 2023; • New World Mangawhai, opening October 18; • Four Square Wainui Road, Gisborne, opening later this year; • New World Taumarunui, opening in January; • Four Square Remuera, 561 Remuera Rd, opening in December; • Four Square Eden Terrace, Auckland, opening in November; • Four Square Martinborough partly opened a few months ago, work yet to finish.
Countdown's Grainger said from July this year to next July, new stores would open in Taupō, Alexandra and Timaru.
Countdown Belfast opened about a fortnight ago. Countdown also has an 11-store renovation programme underway.
Countdown is spending $100m and opening four new stores. Photo / supplied
Foodstuff's Quin said: "Between July this year and next July, we will invest more than $100m into new stores and store redevelopments across the North Island. More than 10 new stores are expected to open during that period."
He said the programme was one of the biggest property investment programmes in the country.
"This is the highest dollar amount and the delivery of the most progress in terms of new stores since I was appointed in 2015."
The co-op has 350 stores and employs 24,000 staff but is under pressure from the Government, which wants more competition.
The Herald reported on August 22 that supermarket ownership is a path to wealth like few others, as it published a power list of ownership.
New World Newmarket is opening early in October. Photo / supplied
In March, the Commerce Commission released its supermarket competition report. Then the Government passed an urgent law to ban anti-competitive land covenants while a watchdog will ensure chains are not ripping off shoppers.
Foodstuffs has removed covenants on 78 of 135 affected titles or properties.
The rest are on titles the co-op no longer owns and it has contacted all landowners to get them removed, it said in July.
Asked if it was a good time to speak about the $100m scheme given rising food prices and the political climate, Quin said: "It's a good time to talk about the fact we're investing for our customers and in New Zealand and in regions as well as large cities."
He said this was required to stay competitive. "We need to keep finding the right locations and keep our stores up to scratch."
Asked how many consecutive years the co-op had spent $100m annually, he said: "That's the largest amount for a little while. For most years, it's $80m to $100m."
Fitouts of the two new Auckland New Worlds are nearing completion in existing buildings.
Chris Quin says the expansion is one of New Zealand's largest under way. Photo / Supplied
New World Newmarket is a $7.5m, 900sq m store at 42 Nuffield St in premises owned by ASX-listed Scentre Group which owns and manages New Zealand's biggest shopping centre chain, Westfield. Forty staff have been employed. It will open on October 4.
New World Britomart in the Barrington Building, 10 Customs St East is a $5m, 1000sq m store. The Barrington and Sofrana Buildings were warehouses for Auckland's increasingly busy port in the 1800s.
The new store in the building, owned by interests associated with Peter Cooper's Southlake Capital Partners LLC, will open early next year.
Since July this year, the $17m New World Wairoa has opened, as well as Four Squares in St Heliers and Cambridge. The local owner of the Wairoa store invested $7.7m.
Quin said all new stores would have new designs and technology and be stocked to suit their areas' customers. For example, New World Newmarket's catchment is a busy urban population so big deli and takeaway options are planned.
"Foodstuffs North Island's property investment decisions are driven by a range of factors, including population growth, changing demographics and shopping behaviours, which have shifted through Covid-19," Quin said.
Brookes Stewart, Chris Quin and Jack Beaton at the newly-opened New World Wairoa. Photo / Foodstuffs
These factors influence where and how a new store will open to meet the needs of a particular community. North Auckland was identified as a future growth node about 10 years ago, so Foodstuffs has new stores opening in Mangawhai and Warkworth soon to meet growing demand, he said.
In the year to April 3, 2022, investment in construction and refurbishment projects was $106.3m. New stores were opened at Waiheke's Onetangi, Northland's Marsden Cove and Waikato's Te Kauwhata. Pak'nSave Henderson was replaced.
A further $21.4m was spent on technology, Quin said.
The 2022 annual accounts say that on a "group level, approximately $4,009,740,000 (2021: $3,714 billion) of revenue represents sales to and rental from members".
Quin said the bulk of that $4b revenue was food and goods bought by store owners to sell in their stores, "but they also buy from their suppliers".
