Big-box pioneer faces growing competition

The way Kiwis shop has changed dramatically since the days when a stroll down main street offered everything we needed.

Despite initial rejection, bargain hunting at big box stores has become part of the Kiwi shopping psyche.

Shoppers cherish the plethora of mid-range, low price goods all under one roof and the model’s presence in New Zealand is increasing.

The Warehouse, now in its 35th year, was the first of its kind and now employs about 12,000 people across 92 stores.

One of the company’s first employees, Gael Heard, remembers being hired and working alongside The Warehouse founder Sir Stephen Tindall.

‘‘That was great in those days. It’s a great working environment and they look after their staff really well,’’ she said.

After 34 years, Heard is retiring to spend more time with her husband.

‘‘I’ll be sad to leave. But it’s time for me and my husband now. I’ll miss my customers, though.’’

Her departure comes at a time when big box retail is thriving but competition in the sector is intense – and The Warehouse may be losing its edge.

The group’s half year net profit to January fell to $13.6 million, compared with $57.2m a year earlier.

And the group recently sold a large 1.4 hectare property in Newmarket, Auckland for $65m.

Stores are facing more competition from Australian retail owner Wesfarmers, which owns Bunnings Warehouse, Kmart, and Target.

Plans Westgate, for a Bunnings in Auckland were announced in February last year with an opening date yet to be announced. Queenstown can also expect the DIY supply store to open, with a development application being lodged to build on Frankton Flats.

Kmart stores were also expanding with the company’s 20th New Zealand store opening in Petone on June 1.

First Retail managing director Chris Wilkinson said big box retail was in its most dynamic stage ever.

A big growth area for Kmart and Bunnings was homeware and gardening, driven somewhat by the media and the housing market.

‘‘Strong property prices in New Zealand, and a culture of nesting by consumers has meant people are looking to develop contemporary interiors. Media on home improvement has driven this whole home improvement and gardening category strongly.’’