Kmart locations can make or break retail
Councils are being told to take care when deciding where Kmart should be allowed to set up shop.
Kmart causes chaos when it opens a new store. Kmart opened in Rotorua on Friday and excited shoppers queued outside from the early hours of the morning just to be the first in the doors.
Kmart will open in Queenstown before Christmas. It is set to open in Invercargill and Blenheim in the near future too.
But whether it opens doors within the main shopping precinct or further afield can make a big difference to the fortunes of the rest of the region’s retailers.
Retail NZ spokesman Greg Harford said the appearance of a Kmart in an area could draw people in, boosting the bottom lines of nearby businesses.
He said retailers in Rotorua might notice a drop in customers when Kmart first opened.
‘‘Shoppers will get excited about the big new store. But it will be short term.’’
He said the arrival of a big retailer was usually positive for retail in the area. ‘‘It becomes something that attracts customers in and that spills out to support other retailers as well.’’
But industry consultant Chris Wilkinson, managing director of First Retail Group, said it could also push them away. He said if Kmart opened outside a town’s city centre, it would cause ‘‘huge detriment’’.
Last year, Kmart’s sales in Australia and New Zealand totalled A$5.57 billion (NZ$6b).
Kmart head of property Ben Smith said the company had plans to roll out into other New Zealand regions but would not reveal where. The company had received many requests from councils and customers lobbying for it to open in their area, he said.
Wilkinson urged councils to talk with Kmart’s developers to ensure it was not a one-shop destination stop. ‘‘Make sure the building, the road connectivity, all contribute to the value of the city centre. To minimise impact and maximise benefit.’’
Wilkinson said a Kmart in New Plymouth’s city centre could help to centralise the sprawled-out city and bring more shoppers into town, benefiting local retailers.
That had happened when Kmart opened a store in Petone, Wellington, he said.
Kmart opened its first Wellington store in Porirua which drew shoppers away from Hutt Valley. Its second store in Petone brought shoppers back, he said.
New Zealand Planning Institute chairman Bryce Julyan said it was important for ‘‘big box’’ retailers to consult the community before they bought a site to build on. Most small towns had planned high-traffic zones sufficient for large retailers to develop within, he said.
Wilkinson said when Kmart’s developers were trawling for towns to open in, they considered population growth, demographics and spending in the region.
It would be ‘‘logical’’ for Kmart to open in Paraparaumu in Ka¯ piti Coast because more young families were moving there to live.
Kmart has a number of stores in main cities as well as in Whangarei, Hamilton, Hastings, Palmerston North, Nelson and Tauranga.