Posted on 5-12-2002

Big Box vs Main Street
From Warren Snow

We want to raise awareness of the enormous strain that big box mega
developments are putting on the social, financial and physical
infrastructure of local communities. We can all participate in creating
VIBRANT LOCAL ECONOMIES and LIVEABLE COMMUNITIES. We want local authorities
and Government to establish limits on big box expansion as many other
counties are doing to enable a fairer playing field for local businesses.

This edition focuses mainly on The Warehouse because it is the most
aggressive example of the big box business model in New Zealand and we have
so much information available. However we will include other examples as
information comes in for future editions. Your stories are important and
need to be told so that we can build a better picture of the “bargain” that
communities are really getting when they cave into the pressure of
companies like The Warehouse who want growth at any cost for their
shareholders.

Urgent! Warehouse to hold Public Meeting at Te Kuiti

The following public notice was sent to us in the hope that anyone
concerned about the fate of Te Kuiti’s town centre would attend. "You are
invited to come & hear the Property Director of The Warehouse speak about
the possibility of The Warehouse store coming to Te Kuiti. This will be an
open forum & discussion. 7 p.m. Wednesday 4th December Cultural & Art
Centre Supper Room, King St, Te Kuiti. Glen Inger (Property Director), Ian
Hartshorne (National Manager of Property) & Fiona Shilton (Development
Manager) will be in attendance. If anyone does attend please send us a
report which we will make available to the list.

Update on the New Zealand “Store Wars” Tour

Audiences of up to 220 people from Auckland to Invercargill attended the
award-winning documentary, “Store Wars - When Wal-Mart Comes to Town”
during September and October. "Store Wars" tells of one community's
strategy to beat off Wal-Mart, the world's largest retailer - a story being
mirrored in New Zealand communities facing the same issues. "Store Wars"
written, produced and directed by Micha Peled, follows one year in the life
of Ashland, Virginia, a town with a population of 7,200 and their struggle
to decide whether to allow Wal-Mart to build a mega-store there. Peled's
cameras start rolling as residents debate whether building a Wal-Mart will
ruin Ashland financially and aesthetically, forcing businesses to close and
creating traffic jams and eyesores with it's bland, boxy architecture. Or
will it, as the Wal-Mart people promise, enrich the community with jobs and
lower prices? Media interest in the tour was strong with Micha interviewed
by Linda Clark on National Radio, and local Newstalk ZB stations. Envision
New Zealand sponsored the visit of filmmaker Micha Peled and Store Wars Tour.

“Kiwi Category Killer” - Article in Forbes Magazine

An article in Forbes Magazine (20/8/2001) claims that The Warehouse is
almost twice as profitable as “hyper-efficient” Wal-Mart with 6.6% net
margins compared to Wal-Mart’s 3.3 and a 41.3% return on equity compared to
Wal-Marts 24.4%. The article goes on to say how Stephen Tindall’s method
was to develop a “local version of the low-cost category killing megastores
built by Costco, Wal-Mart and Carrefour”. “if you go into any small town in
the country, the biggest store there is probably us” boasted Mr Tindall to
Forbes. The article went on to say that to supplement growth “Tindall is
starting to sell Telecom and financial serves and may add electricity sales
as well”. For the full article: www.forbes.com/global/2001/0820/028.html

Intriguing Statistics

· In 1982 the year The Warehouse began, NZ had a trade surplus with China
of $68million. 21 years later The Warehouse’s turnover was over 1.7
$Billion and we had a trade deficit with China of $1.billion, 24 million
with China.

· On one day in December 2002, according to a recent BBC report, Wal-Mart
turned over more than$1.3 billion dollars -. It went on to explain
thatalthough this was a great result for Wal-Mart it was not necessarily
going to do much for the US economy because of the fact that a high
proportion of the products are made in overseas countries.

· Tariffs: The following is a list of products and the percentage of tariff
that the Chinese impose on NZ imported products. Their foreign trade laws
also specifically state that they will halt imports if their local
industries are being damaged. Clothing 40-46.5% , Wool 34%, Carpet 53%,
Toys 28.7%, Tools 26-38%, Footwear 46.25%, Hats 46%, Fridges 45%, Metal
Furniture 42.74% Wooden Furniture 42.74% Plastic Furniture 42.74% LPG
Cylinders, 27.53%, Wetsuits 46%. Most of the products above enter NZ from
China with no tariff, except for Clothing (15%), Footwear (15%) and Carpets
(15%). These remaining NZ tariffs are scheduled for a tariff review in 2005.

· Imports and Exports to and from China Largest export to China in 2001 was
wool at $164 million. Our largest import from China was Jerseys and woollen
suits for Women at $165 million. Both transactions register as additions
to our GDP, yet as children our mothers knitted jerseys for all the family
each with local wool from a local store and apart from the purchase of the
wool her efforts didn’t register on the GDP yet she was saving us overseas
funds, enveloping her children in the love of a hand made warm garment,
keeping a valuable skill alive and having a vastly reduced impact on the
environment compared to shipping both ways and all the infrastructure to
get the wool to China and back through (usually big box) stores to New
Zealand. Now because the garments are made in Sweatshops (proof abounds)
the price is so cheap that hardly anyone now knits. There go the skills,
the little wool stores and here comes big profits for the few. In the same
year 2001 we exported $75million of logs and sheep meat and imported $75
million of toys. So we’re turning our natural wealth and soil fertility
into junk to feed landfills with long term environmental damage and putting
local toy manufacturers out of business in the process. Main Source;
Statistics NZ

Number One Supporter!

Helen Clarke photo is on the front cover of The Warehouse’s in-house
magazine “The Warehouse Way” alongside executive, Greg Paget and Tom
Schnakenburg. The title of the story reads in bold letters “Supporter #
One” The story explains that she is the first person to sign up as a member
of The Warehouses’s “Team New Zealand Supporter’s Cub”.

It’s time for Government to act by putting fair limits on Big Box Retailers
Here’s what we are really about - getting some fairness to allow the chains
and small retailers to thrive as they used to alongside chain store
McKenzie ’s. We accept that discounters are a part of modern life - but as
with ecological systems everything must be in balance. If one organism
outgrows it’s pond, it inevitably eats out the local resource and fouls
it’s life support systems and eventually falls prey to the weakness and
lack of diversity that it caused in the first place.

Government and local bodies must act on behalf of communities under siege
from rapacious and ever expanding big box stores who have proven that they
will kill any category they can to grow and to please shareholders. Dozens
of communities have enacted zoning ordinances that restrict the physical
size of new retail stores - to as low as 1,000 square metres. In 2001, the
Irish government enacted a cap on the size of retail stores. The law
restricts stores in the Dublin area to 3,500 square meters and 3,000 square
meters in the rest of the country.

1. Moratoriums

In 1999 Norway enacted a five year moratorium on Big Box chain stores over
3,000 square meters. This would give us time to debate fair limits.

2. Location restrictions

The UK Government has put limits on the siting of Big Box stores on the
edge of towns in order to protect the businesses and character of high
streets. The policy also requires that retail stores be located in town
centres whenever possible.

3. New powers to govern Big Box chain stores Poland has given local
authorities new powers to govern the growth of Big Box chain stores.

4. Government curbs on expansion of chain stores Thailand is about to enact
new rules to limit Big Box chain stores “We want to create a more level
playing field in the retail industry before thousands more small retailers
go out of business,” said Commerce Minister, Adisai Bodharamik. (NZ Herald
18 September 2002)

5. Limits on trading hours are still common in some countries, i.e. Sunday
trading.