Corner store concept revisited

By IRENE CHAPPLE

The future of New Zealand supermarket retailing is looking much wider than fresh groceries, with an increasing trend towards stocking non-food lines such as DVD players and televisions.

Progressive Enterprises and Foodstuffs - the major players in New Zealand's supermarket industry - are extending their ranges to include regular offerings of electronic goods.

The trend follows global patterns and is, in part, an effort to combat tight fresh food margins.

Internationally, the move towards general merchandise has already been adopted by chains such as British supermarket giants Tesco and Sainsbury.

Stocking such products will help alleviate the squeeze on fresh produce margins and also, according to Foodstuffs Auckland managing director Tony Carter, marks a return to the wider range of products stocked by corner stores some years ago.

"It's a wee bit of back to where we came from," said Carter. "It's all happening very slowly."

Both he and Progressive Enterprises managing director Ted van Arkel said the trend was evolutionary rather than revolutionary.

But the impact on stocking non-food lines is proving significant overseas: At Tesco, for example, sales of clothing grew over the last quarter of 2003 by 34 per cent.

Foodstuffs operates brands including Pak'N Save and New World chains, and Progressive Enterprises operates the Foodtown and Woolworths brands, among others.

Both have experimented with stocking non-food lines at some supermarkets.

But the extended ranges will become permanent, with new stores under construction by Foodstuffs increasing capacity to cope with extended general merchandise lines.

General merchandise at present takes up about 3 per cent of sales and could, according to Carter, reach 10 per cent of sales.