Paper and pens war on internet

By KARYN SCHERER

A potential battle looms between two of the country's biggest retailers over sales on the internet.

The Warehouse Group signalled yesterday it plans to make a major push into online stationery sales over the next year - a move that will see it compete head-to-head with Eric Watson's Blue Star Group.

Blue Star is a major player in the stationery market and one of several investors in FlyingPig, a local version of America's most famous online e-tailer, Amazon.com.

The site, which is initially offering books, videos, software and stationery, went live this week.

At the Warehouse Group's annual meeting in Auckland yesterday, the man being groomed to take over Stephen Tindall's job as managing director, Greg Muir, outlined the company's internet plans.

While its first priority was to use the internet for business-to-business relationships with its suppliers, the company also saw an "outstanding opportunity" to boost stationery sales.

Stationery is one of the biggest sellers over the internet in the United States and Mr Muir said the company planned to put a big effort into the category over the next year.

It was not planning to rev up sales of other products at this stage.

Although the group has already had a Warehouse website up and running for some time, Mr Muir said it did not see much potential for sales growth through the site.

"While we'll be doing a bit of enhancement through the red shed internet site, we don't believe it's such a significant opportunity."

Meanwhile, the company has confirmed it has begun investigating opportunities in Australia, although it is not yet ruling out other countries.

It is also pressing ahead with its plan to expand its strategic alliance with the Care Chemists chain, despite uncertainty over when the pharmacy sector is likely to be deregulated.

By next month, it expects to have five pharmacies open alongside its red sheds, with another five due to open by July next year.

It is also expected to announce within the next two months an alliance with a major bank - tipped to be WestpacTrust - which will see it offering financial services.

"Whatever we do will be very consistent with our key buyline - where everyone gets a bargain," said Mr Muir.

Buoyed by the company's spectacular growth, shareholders approved a share option scheme for non-executive directors without any dissension.

Mr Tindall said the company was in the top 10 on the stock exchange, based on market capitalisation.