Supermarket sales: one store owner buying another. Photo / Greg Bowker
The supermarket thought to have the largest revenue of any in New Zealand is tipped to be sold to a former shelf stacker.
In a deal due to settle later this year and which could be for around $50 million, insiders say the transition is on although owners are yet to confirm that.
Pak'nSave Albany, long owned by Paul and Liz Blackwell, is planned to be sold this August to the prominent owner of New World Victoria Park, Jason Witehira, executives say.
Insiders in giant co-operative Foodstuffs which owns the Pak'nSave and New World stores say it is common knowledge within the business about the sale which will then automatically trigger the sale of a second high-profile, highly profitable store because owners can only have one supermarket each.
Antoinette Laird, Foodstuffs NZ's corporate affairs head, said: "All Foodstuffs stores are individually owned and operated and therefore the sale, or purchase, of a store is a private transaction between two business entities that are separate to Foodstuffs. The sale or purchase of a store does not include the property, these are generally owned by Foodstuffs or another landlord."
"Jason's a rising star," said one Foodstuffs executive of the big step up from the fringe CBD owner/operator moving to the North Shore store. Witehira, reported having grown up in Rotorua, featured on the 2019 NBR Rich List with an estimated $60m, owning one of the largest and wealthiest New Worlds in New Zealand.
The Blackwells have for many years owned professional basketball team the Breakers. Three years ago, they announced a newly formed company, Breakers Basketball, would take control.
Blackwell was reported in October to be in an investment group buying Burger King from its receivers. Tahua Partners bought Starbucks New Zealand from Restaurant Brands in 2018 and was said to have signed a binding agreement to buy the burger chain.
Records show Blackwell has recently become a director of Antares Restaurant Group, the Burger King's operator. Last year, that fast-food chain was being sold as a going concern after its franchise owners were put into receivership.
Companies Office records showed Blackwell has only been "active" as an Antares director since late last year. Questions were put to him about whether he had bought into Burger King but he didn't respond.
The Blackwells featured on the 2018 National Business Review Rich List at an estimated $65m. That said the "supermarket supremo couple" remained involved with the Breakers despite relinquishing their controlling stake.
"They are staying on at the club they owned for 13 years, now as minority shareholders, with Paul staying on the board to continue his influence that led the team to unprecedented success in the Australian National Basketball League," NBR reported then.
On the two-store ownership change, a Foodstuffs executive said yesterday: "That allows for everything to be put in place. Paul just wanted to give them [Foodstuffs] enough time to make sure they found the right person to go into it."
He was referring to Foodstuffs' business the National Trading Company which owns almost every property in that giant supermarket chain and has jurisdiction over who buys a store.
"It's a co-operative but it's every man for himself," said an executive of the model under which store owners operate the business which is a stand-alone success or failure. Each store owner, although they're in the same group, competes with other store owners in the co-op model.
Pak'nSave Wairau Park is thought to have a revenue not far from Albany's because they are both in the wealthy North Shore and in intensely populated areas.
"Some weeks, it's Wairau, some weeks it's Albany," said an executive yesterday, referring to the largest trading New Zealand stores.
Witehira said yesterday he did not wish to comment on the planned deal. Paul Blackwell did not respond to email inquiries. Chris Quin, Foodstuffs chief executive, said he was attending a funeral and was unavailable to speak about the deal but that the communications team at Foodstuffs would respond.
New World Victoria Park is estimated by some to be worth about $25m. Witehira rose to prominence in 2016 when the ex-supermarket shelf-stacker won the Outstanding Māori Business Leaders Award from the University of Auckland Business School.
Auckland Council lists 2 College Hill, Freemans Bay as having a 2017 rateable valuation of $33m. The 7698sq m site has almost a half-hectare building, at 4261sq m. The property with vehicle entry off Franklin Rd has 277 basement carparks.
Executives say the numbers in the Albany sale are extremely large: the supermarket could be sold for around $50m to $60m they estimated because it turned over around $150m to $200m annually, making it by far this country's highest revenue-earner of any supermarket.
The Albany store is not the largest by floor area in the powerful Pak'nSave chain: that's Lincoln Rd Pak'nSave at Henderson.
Auckland Council lists 139-163 Don McKinnon Dr at Albany as having a 2017 rateable valuation of $52.2m, four years out of date. Auckland property prices rose just under 20 per cent in the last year alone, according to the Real Estate Institute.
The site is large at 2.5ha, with hundreds of carparks, a fuel station and electric charging. The total floor area of building alone is listed by the council as being 9736sq m. That means the supermarket has an indoor floor area of just under 1ha.
The council records the property as having 493 dedicated on-site carparks.
Property records show 163 Don McKinnon Dr is owned by the National Trading Company.
The store incurs an annual rates bill of $293,000 and stands beside Westfield Albany owned by ASX listed Scentre Group in a joint venture with the Singaporean Government's property investment fund, SIG.
Scentre has long held plans to expand that property, developing towers on the site for commercial purposes.
Chris Wilkinson of First Retail Group said the tipped sale was significant deal.
"Supermarkets of this scale rarely come to the market. Even then, this isn't an open opportunity to all-comers and is limited to those at an exceptional level that have progressed through Foodstuff's curated ownership journey. To be part of the group you have to be successful in this."
Witehira reflected the continuing evolution of Foodstuff's ownership model, with greater diversity, external commercial acumen and staged progression through the various business models across the co-operative, he said.
"He's connected, respected and is seen by many as a leader in the sector through his wider involvement with the food chain, such as his directorship with Moana Seafoods. He is also one of the directors of Foodstuff's North Island alongside a small number of other owners and professional directors including Henry van der Heyden."
For many years, larger stores were run on an inter-generational basis but Foodstuffs was increasingly encouraging opportunities for those who have come into the business through its managed progression.
That was subjected to tests, scrutiny and support necessary to prime owners for managing stores of scale and complexity. With many of these stores rivalling turnovers of public companies it was vital that a strong community culture, people skills and commercial acumen are embedded early in prospective leaders, Wilkinson said.
The sector was unique internationally, with a co-operative ownership model being one of the two key players in this country, Wilkinson noted.
Industrial projects dominate new supply, the study found, comprising 65% of new stock.