Foodstuffs South Island

New Zealanders are radically changing their grocery shopping habits as they tighten their belts.

Foodstuffs South Island chief executive Steve Anderson said the co-operative chain, which has Pak'n Save, New World and Four Square, had seen a huge change in shopping behaviour. "It's like someone flicked a switch three months ago and as a result people are changing the way they shop," he said. "The trend is towards Pak'n Saves for the cheaper prices," Anderson said.

Rising fuel prices had also proved a blessing for smaller grocery stores in rural areas. Anderson said the trend was towards shopping in rural Four Squares and New Worlds, rather than coming into the city. "People have been calculating how much it costs to drive and as a result they're shopping locally," he said. "Prior to the fuel increases no-one seemed to think about it and now they do it's cost-effective to shop there rather than spend $25 to drive to supermarkets."

Anderson said the popularity of products had also changed, with house brands increasingly in demand. "Budget and Pam's are doing very well, which is an indication of tighter times."

Another noticeable change was the shift towards 500g blocks of cheese rather than the traditional 1kg block as prices rose. "People went from a situation where they were happy to live this lifestyle because of the value of property and their job is safe and then they started thinking these pillars are not there so they've gone from spenders to conservers."

Angus McNaughten, of the Kiwi Income Property Trust which owns malls including Northlands, said there had been a shift to the cheaper supermarkets. "It would be fair to say ... people are becoming a lot more cost-conscious," he said. "It's a sign of the times."

Progressive Enterprises spokeswoman Fiona Breen said Progressive's supermarkets, which include Woolworths and Countdown, had experienced strong growth in their in-house label, Homebrand. She said there had also been a change in where people shopped.

Petrol prices had changed people's habits and many preferred not to drive as far to shop, she said. "Convenience in location is becoming a big factor," she said. However, they had not seen a noticeable shift from Woolworths to Countdown, perhaps because the prices at the stores were now similar.

Shopper Irena Sutherland said she had recently changed to Pak'n Save Moorhouse in Christchurch because of the competitive prices. "I used to shop at New World in Opawa but I found it cheaper here, I have to confess," she said yesterday. "I also buy the house brands, why not? They serve the same purpose."

Sharon Lister said that although she had closer supermarkets, she travelled to Moorhouse Avenue because it was the cheapest option. However, Lister also went to other supermarkets for specific items when they had good deals. "I shop around, especially with the cheap brands," she said. "If they've got something on special I will go down and grab it."

Glen Steele, of Hanmer Four Square, said more residents of the North Canterbury town were shopping locally but business was suffering from a drop in tourist numbers.

Seeking a new challenge, Blenheim couple Jo and Jack Stafford are moving south to take up the reins of Kaikoura New World.

The couple, who currently co-own Blenheim New World with Mrs Stafford's sister Andrea Boock and her husband Mark Elkington, take over the store from owners Jason and Joanne Williams on August 4. From then Ms Boock and Mr Elkington will be the sole owners of the Blenheim store.

"Kaikoura came up for sale and we just thought it was a great challenge and a great opportunity for us," Mrs Stafford said. The couple make the southward move at the end of the month, along with their 10-month-old baby daughter, Charlotte. "We're excited about moving to Kaikoura and getting involved in the community and being part of the small-town spirit," Mrs Stafford said.

The Williams', who have owned the Kaikoura New World for about five years, are moving to Timaru to take over the town's PAK'nSAVE store at the end of August. Six-and-a-half years ago the couple owned Kaikoura's Four Square for about 18 months.

At this point Mrs Stafford said she and her husband did not have any changes planned for the Kaikoura store and the takeover would not bring any noticeable differences for shoppers. "It will be really nice to eventually make our own mark on the store with maybe some different products, but for now it'll stay as is," she said.

Supermarkets are in the Boock family's blood as Mrs Stafford's parents, Bruce and Maria Boock, bought the Blenheim New World in 2000 before handing it on to their daughters and their husbands earlier this year. Mrs Stafford's paternal grandparents started the family in the industry with a Four Square supermarket in Dunedin in the 1970s. Much of her extended family on her father's side are either working or have worked in the family supermarkets or in supermarkets of their own. "So in my family, instead of falling out of cots, we fell out of shopping trolleys," she said.

Although the couple were looking forward to the move, Mrs Stafford said it would be tinged with a little sadness. "It will be sad to say goodbye to Blenheim with all our family and friends here. Also our staff, they have been a huge part of our lives."

The country's leading supermarket group, Foodstuffs, pushed its sales beyond the $7 billion mark and increased market share at the expense of competitor Woolworths in the past year, Foodstuffs' annual reports say.

The Foodstuffs group, which consists of three regional cooperatives, two with a financial year ending February and one March, boosted total sales in the 2006-07 year by 7.9 per cent to $7.18 billion.  Shareholders of the cooperatives are the owner-operators of Foodstuffs' stores, including New World, Pak 'N Save and Four Square.

Foodstuffs paid them total rebates and dividends of $285 million in the past financial year - an increase of 9.2 per cent on the previous year.

Commentaries in the annual reports confirm that Foodstuffs' supermarkets benefited from industrial action at Woolworth's supermarkets in September 2006.  Foodstuffs South Island chairman Russell Nieper said "significant residual market share advantage" had come from the dispute, resulting in market share figures "well in excess of expectation".

On a national level, Foodstuffs is estimated to have about 57 per cent of the supermarket spend, compared with Woolworths' 43 per cent.

Brian Drake, chairman of Foodstuffs (NZ), the entity that represents all three of the cooperatives, said Foodstuffs continued to strengthen its financial base. "And this, coupled with the close cooperation that exists between the companies, makes the future look positive.  "The organisation faces challenges at wholesale and retail level but, with further national initiatives planned for the new financial year, we can continue to look forward with optimism and confidence to another year of real progress."

There is only brief mention of the Foodstuffs' acquisition in June/July 2006 of a 10 per cent shareholding in The Warehouse.  Woolworths also took 10 per cent before both applied unsuccessfully to the Commerce Commission for approval to take over The Warehouse. Foodstuffs and Woolworths are appealing against that decision in a High Court case due to start on October 23.  Mr Drake said The Warehouse had "a similar culture to Foodstuffs as the company is New Zealand-owned and controlled". 

Foodstuffs (Wellington) Cooperative Society saw pre-tax earnings fall to $53.07 million from $163.18 million. However, last year's profit was hugely boosted by a $119.75 million gain on the sale of Kapiti Fine Foods to Fonterra.

A memo telling Pak'nSave workers at the Northlands Shopping Centre that workplace accidents could be used against them during wage reviews has prompted union criticism.

A union leader said the memo, leaked to The Press by an incensed worker, could stop staff reporting genuine accidents.

Store owner Stephen Boock posted an all-staff memo on a "spate" of workplace accidents resulting from carelessness, risky behaviour, a casual attitude to safety and "sheer stupidity".

While the memo acknowledged genuine workplace accidents, it said their frequency would be recorded in employees' personnel records to be considered during wage reviews.

National Distribution Union national secretary Laila Harre said the supermarket was not yet unionised, but news of the memo would speed action in contacting store workers.

"This sort of action by an employer and their approach to health and safety is a concern," she said.

"We would not tolerate this in the union. Anything that reduces the incentive to report workplace accidents is just stupid."

Boock said he was unapologetic about the memo.

"We are required by law to provide a safe workplace and we are responsible for the training and safety of all our employees," he said.

"This is the right thing to do. Along with many other criteria, annual staff reviews include adherence to workplace safety practices. Anything we can do to minimise harm to our employees we will do, and we do so unapologetically."

Buddle Findlay partner and employment law specialist Kerry Smith said given the penalties that could be imposed on employers under the Health and Safety and Employment acts, he was not surprised Boock posted the memo.

"To use an accident record as part of a staff review is, in my opinion, legitimate. Whether it makes for good industrial relations is a moot point," he said.

Supermarket staff declined to comment.

Supermarket chain Foodstuffs South Island will add nine liquor stores to its co-operative structure from June 1 as part of an aggressive growth plan.

The nine Imperial Discount Liquor stores – owned by Keith Miles and Carl Wild – will rebrand and join Foodstuffs' existing Henry's Beer Wine and Spirits outlet in Queenstown to form a new chain of full service liquor outlets.

Foodstuffs co-operative business is based on independently owned Pak `N' Save, New World and Four Square supermarkets.

Imperial would pay a one-off membership fee of $500, Foodstuffs general manager retail operations Alan Malcolmson said.

There was no other financial transaction, but Foodstuffs would also benefit through its liquor distribution channel, Trents Wholesale.

"We get the benefit of the supply and building equity in our brand," he said.

The co-operative had been in talks with Imperial for five months, and the move would bring significant benefits for both businesses. The Foodstuffs Henry's brand would gain outlets in Kaikoura, Rangiora and Christchurch, but the stores would continue to be operated by individual owners.

"Foodstuffs has aggressive plans to roll out the Henry's brand around the South Island as part of its ambition to support independent liquor retailers," Malcolmson said.