Countdowns on the chopping block
Six as-yet-unnamed Countdown supermarkets have been tagged for closure by their Australian owner.
Rangiora Central in North Canterbury is the only location to be named. It will close on October 2.
In a massive restructure announced across the Tasman by Woolworths Australia – owner of Progressive Enterprises which runs more than 180 Countdown stores in New Zealand – said 21 stores in Australia and six here would close.
The company said the stores were either ‘‘loss-making or in the bottom quartile’’ of sales per square metre and would be closed before the end of their lease terms.
Hundreds of jobs will be lost or restructured in Australia but no details were given of possible New Zealand job losses or changes.
Progressive’s spokesman James Walker said the Rangiora store’s closure had already been flagged.
‘‘We have already informed our team and are working with them to redeploy team to other Countdown stores nearby.’’
He declined to name the other five supermarkets, but said one would only close temporarily while a replacement was built.
Walker said Countdown was always in the process of closing and opening new stores, and would open three over the next year. It would open in Ashburton South, Aotea, and Beachlands, along with two refurbished stores in Mosgiel and Waiheke.
‘‘We close stores for various reasons, such as the opportunity to build new, or improved stores and proximity to other Countdown and competitor stores.’’
While Woolworths has suffered from stiff competition in Australia, including the arrival of German budget player Aldi, Countdown has been considered relatively stable.
The supermarket chain announced just this month that it would create 600 more jobs to beef up its customer service and shelf stocking abilities. Countdown is part of Progressive Enterprises which also owns Super Value and Fresh Choice supermarket brands.
New Zealand’s other big supermarket chain is Foodstuffs which has the New World, Pak’nsave and Four Square brands.
Woolworths Australia also owns the highly successful New Zealand mail order clothing and homeware company Ezibuy which it bought in 2013 for $350 million.
Woolworths’s Monday restructuring announcement also contained news that it was separating Ezibuy from its Australian Big W general merchandise division, a move which some analysts interpreted as readying Ezibuy for sale.
Chris Wilkinson of consulting firm First Retail Group said that after the massive exit of Woolworths’ Masters home improvement business in Australia, the company appeared to be focussing back on its core food and beverage businesses.
He said Ezibuy had been a ‘‘very efficient’’ logistics business but now Woolworths had its intellectual property and the gap between New Zealand and Australia’s currencies was not so great, it might be able to use that knowledge back home.
Ezibuy was ‘‘one of New Zealand’s original examples of great ecommerce’’ which benefited from its history as a catalogue company, Wilkinson said.
It had been very successful in rural and provincial Australia, but it was also possibly suffering from being ‘‘cannibalised’’ by the likes of ASOS and other overseas online fashion stores.
Woolworths Australia chief executive Brad Banducci said Ezibuy had had a challenging performance trajectory over the past few years – driven partly by the changes with the exchange rate, particularly between Australia and New Zealand, and between the US dollar and NZ dollar.
‘‘It’s a terrific brand and great brand franchise, in particular in New Zealand. We’ve come to realise given the absence of synergies ... we’re not the natural owners of the business.’’