Retail therapy
PNG’s largest retail group is pressing ahead with expansion plans.
Despite a challenging retail environment, CPL Group chairman Mahesh Patel says the diversified retail group is not just aiming to consolidate its position, but is seeking further expansion.
The company has recently opened a Jacks clothing store and has big plans for its City Pharmacy and Stop N Shop brands.
“Since 2008 and 2009, we’ve just been busy growing, and we’ve grown from a middle-sized PNG company to a large PNG company,” Patel says.
But several factors, including the early completion of the PNG LNG project, led to lower-than-expected profits for CPL Group in the 2014 financial year. The company has also faced teething problems with a couple of its newer retail brands.
As CPL has adjusted to a changing marketplace, Patel says the company will approach improving efficiencies on a number of levels.
He says there will be elements of consolidation and expansion, with the recruitment of experienced leadership being a major component of each.
“Internally, we’re going into this transformation of creating efficiencies now,” Patel says.
“We’ve got three or four very high-quality expats actually recruited, which is against the market, but these are people with vast experience, not only in Australia, but right across Asia as well.
CPL Group’s core businesses, City Pharmacy and Stop N Shop, have continued to experience single-digit growth, a pace Patel is confident will continue.
The company has development plans for both brands. At City Pharmacy outlets nationwide, there are plans to strengthen healthcare services by recruiting more instore nurses.
Work on two new Shop N Stop outlets is expected to start this year, adding to last year’s opening of the massive PGK100
Having introduced PNG consumers to barista-made coffee (Boncafe), pizza (Eagle Boys) and multiplex cinemas (Paradise Cinemas), CPL has shown itself keen to launch new businesses in PNG.
million, 5000-square-metre store at Waigani Central.
Having introduced PNG consumers to barista-made coffee (Boncafe), pizza (Eagle Boys) and multiplex cinemas (Paradise Cinemas), CPL has shown itself keen to launch new businesses in PNG.
Its next move has been into fashion, with the opening of the Jacks of PNG apparel outlet at Waigani Central.
Jacks, which originated in Fiji, offers casual wear to consumers and may represent an opportunity for clothing manufacturers in PNG once it is established.
“What we want to do is bring that in, but then start rejigging PNG designers to do PNG custom-made clothing,” says Patel.
Meanwhile, Boncafe, another profitable business for CPL, grew to seven outlets in 2014 after the latest store opened at Waigani Central.
Some of CPL’s other brands have proved more challenging, but Patel is confident of improvement as they become more efficient and effective.
Eagle Boys Pizza, for example, has required a change of approach since CPL launched the Australian brand in 2013.
“What we didn’t realise was we had the wrong demographics, because people who eat pizzas here could only afford to eat it at hotels. Our pizza was for the mass market, but the pricing is not quite mass market pricing,” Patel says.
He says Eagle Boys management also found that Papua New Guineans preferred thinbased pizza instead of the thick base that was initially offered.
“It really comes down to smarter market research,” Patel says.
Of all of its brands, Hardware Haus was the only CPL business to record a loss in 2014.
Viewing this as an opportunity, Patel says new management has been appointed and an efficiency improvement process is being implemented for the business.