Big boxed in

July 5, 2008
Another large retailer has opened its doors to Nelson shoppers and more are said to be on their way. Geoff Collett looks at the fears the retail titans spark when they arrive in town. --------------------

A few things happen almost as certainly as the sun coming up when another of the giants of the retail world strides into Nelson.
Somebody will bemoan the prospect of another mega-chain sucking money from the local economy.
Someone else will warn that it will gut and probably fillet, fry and eat the town centre.
Snide comment will be made about civilisation riding to its doom on the back of a shopping spree.
As things progress, there will likely be outcry over the newcomer's hulking appearance.
After that - opening day: probably some sausage sizzles, a bit of hoopla, maybe even a dignitary wheeled out to cut a ribbon.
A little plaque recording the great occasion will be mounted just inside the retail-barn door, never to be noticed again. Then the rest of us will get down to spending and, if we ever look back, wonder how life existed in the darkness before the arrival of the Mega- Mighty-You-Save-Great-Big-Discount-Bargain Barn.
So, more or less, it has been with Bunnings, the Australian-owned home improvement chain that opened its 14th New Zealand warehouse-store out near Saxton Field this week. (An official opening, complete with hoopla and dignitaries, is planned for later next week.)
Actually, Bunnings' arrival in Nelson was relatively smooth, after the several years it spent trying to nail down a site. Formal objections to its plans were withdrawn so it sailed through the resource consent process, and it has suffered just the odd snipe about the quality of some of its merchandise, the occasional anti-retail diatribe.
Nelson may have spent much of the past decade agonising over the rights and wrongs of "big-box" (they prefer "large-format") retailers rolling into town, one after another, but as Auckland retail consultant Paul Keane reasons, the things are now well and truly cemented as a new way of shopping, are a direct consequence of the consumer's insatiable demand for more choice and cheaper prices, and exist only because demand says they should.
They may even be the opposite of the great destructors their opponents make them out to be. Keane, executive chairman of the Auckland-based Retail Consulting Group, has a favoured anecdote: Ten years ago, The Warehouse arrived in Whakatane, setting up shop in the heart of the town centre, to be greeted with a chorus from local retailers that the big newcomer would kill their businesses. A decade on, The Warehouse announced plans to move to a bigger site on the CBD fringe. Now, the retailers fret that if the Red Shed leaves, they'll go broke.
Whakatane could probably be Anytown, NZ. Eleven years ago, back in the day when The Warehouse had just become the biggest act in Nelson - moving from a dark, cluttered shed in Tahaki St, down by the public library, to its aircraft hangar-proportioned store on St Vincent St - the prospect of a stampede of other retailers from the city centre to sites a few hundred metres west had CBD businesses, and the city council, seriously spooked.
When Warehouse Stationery tried to set up shop close to the Red Shed, it faced a barrage of opposition from business-owners who warned it would be the death knell for the town centre. The council didn't hesitate, refusing it permission to use the site.
Today, while Warehouse Stationery operates from Bridge St, the land it once coveted is home to a paint shop and a gym. The Warehouse and the neighbouring Countdown make for one of the busiest shopping destinations in the city. Across the way is Smith's City, another paint shop, various home improvement type shops, and a scattering of takeaways and video stores. Further down St Vincent St, a vast barren site is expected to accommodate a Harvey Norman complex, packed with home furnishings, electronics and whiteware.
But more recently, the real action has been out in the suburbs, principally where the Honda car factory once stood in Annesbrook, and where today a monstrous Mitre 10 Mega store squats centrestage, surrounded by hectares of land that has just been rezoned for similar developments. In time - the developers hope and expect - it will be a whole new retail precinct of other large-format stores (meaning a floor area of a minimum 500sq m, but probably much bigger - the Mitre 10 is closer to 10,000sq m).
And, a five-minute drive away in Stoke, Bunnings has opened for business, not far from where another hardware barn, Placemakers, has recently set up shop.
Bunnings' New Zealand boss, Brad Cranston, is confident of a warm welcome in Nelson.
"Every new market we've entered I think we've been welcomed with open arms, " he says, before launching into a patter about lowest prices, best service, bla bla bla . . .
Cranston seems slightly offended when asked if the store opening will include good specials for shoppers.
"We don't have specials, " he insists, before launching into another lowest-price spiel.
Nelson City Council's divisional manager of planning and consents, Richard Johnson, readily acknowledges that its planning rules are out of date when it comes to dealing with large-format retailers. The rules were drafted in a simpler age - the 1990s - when the notion of Nelson playing host to vast retail barns was an unlikely one.
If the traditional response in Nelson - at least from those with a competition or politically motivated concern - has been to vilify the big boxes, Johnson cautions against casting them as villain. To his planner's mind, large-format retailing "is what it is", neither good nor bad. If the demand is there, and the land supply and planning mechanisms can provide for it, so it shall be.
He will concede that the council has been prodded by a series of upsets over the rather ungracious architecture of the breed - the Rebel Sport box in Montgomery Square remains the most notorious, but more recent rumblings about the vast orange expanse of the Mitre 10 Mega store, for example, or the new Countdown supermarket in Stoke demonstrate that sensitivity remains high around Nelson. The council will need to attend to that in future projects, he accepts.
Other than that, "they are just part of what happens as cities change and redevelop and remodel and reshape".
Johnson recalls how, in The Warehouse's early days, much scepticism and resistance centred on the cheap goods it offered, mostly imported from, of all places, China. Now those who seek to avoid the Made in China label, whether at The Warehouse or a typical High St speciality shop, have a nigh-on-impossible task. "The world moves on."
As for the spectre of the big boxes sucking the life out of the established town centre, Johnson dismisses the popular argument that the CBD will be brought to its knees by large- format competition moving into the suburbs. His take is that the CBD will stand or fall on the merit of its own activities and behaviour; that people will always come to the town centre for different reasons than simply trying to shop for a new widget, and so long as the town centre gets its marketing right it can expect a long and happy life.
(The central business group Uniquely Nelson did not have much comment to offer for this story: the place is growing, fluctuations occur, but "it's business as usual and it's all good", was chairwoman Alison Rutt's observation.)
Johnson brandishes a thick report that gives the reasons why a planning inquiry last year allowed the entire 9ha or so around and including the Mitre 10 barn in Annesbrook to be rezoned for large-format shops.
He sees as pivotal a densely argued passage from one of the planning commissioners concluding, simply, that all the evidence suggested there was going to be continued growth in retail demand in Nelson; most of it would be in large-format stores; there was no evidence that the constricted city centre could hope to accommodate that burgeoning demand; and, crucially, the growth was such that there would be no loss in either economic activity or pure retail sales in Nelson city even if tens of thousands of new square metres of retail space opens up on the Honda land.
Bunnings' Brad Cranston echoes that argument as far as his company's forays into new markets go.
"I think what we do is expand the market for everybody, " he says.
"I'm not aware of people (as in, other retailers) packing up and closing doors because we've entered the market. What it tends to tell us is that people (as in shoppers) are looking for the type of offer that we have and therefore we're able to establish without impacting hugely on any one player in the market."
Not even, it seems, on another humungous hardware/home-improvement barn a few minutes' drive away. The manager of Mitre 10 Mega was unavailable to be interviewed for this article but consultant Paul Keane observes that in other places where the two have set up in close proximity, both seem to cope.
And Cranston will venture a mild observation on his competitors' behalf: "People see us coming and prepare themselves well in advance by ensuring that they do things as well as they can."
Cranston rails mildly against the suggestion that Bunnings will suck money out of the local economy and back into the pockets of Australian owners, pointing to the jobs its stores create, the employee shareholding schemes it operates (so the New Zealand workforce is among its shareholders) and its policy of getting staff involved in their local community "to ensure people don't see us as an outsider". (To prove the point, its website boasts various smiley photos of Bunnings workers engaged with community folk.)
Still, as far as ownership heft goes, it is undeniably the biggest of the big: part of the vast Australian conglomerate Wesfarmers (which also counts in its portfolio the Coles, Target and KMart chains, along with a raft of non-retail activities). About 150 Bunnings warehouse stores are spread here and across the Tasman, plus dozens of smaller-format Bunnings shops, reaping annual revenue of close to $A5 billion.
But Keane, for one, is impatient with the complaints that he has heard for years now, at planning hearings up and down the land, from small-store retailers claiming that all-powerful, out-of-town, large-format stores are going to wreck their businesses.
"If that's your thinking, your business is wrecked anyway, " he retorts. "I can tell you that we've done a lot of work on that and we can't recognise one (place) where it's wrecked the CBD."
As for the impact of a Bunnings on Nelson, Keane says, "Could Nelson have survived without a Bunnings? Of course it could. The reality is they didn't need Bunnings, but now that they've got it, they'll shop there . . .
"Will it hurt the CBD? There may be a little bit of pain for some people for a short time, but that's pretty transparent . . . People will recover."