The Warehouse marks 40 years
Reflecting on 40 years of The Warehouse, founder Sir Stephen Tindall hopes the retailer can solve another pressing issue for Kiwis – the cost of our food. Amy Shaw investigates.
When Sir Stephen Tindall started The Warehouse in Auckland in 1982, the main products it had for sale were rattan and rice paper blinds, for $10.
It wasn’t until import licensing laws changed a couple of years later that he was able to expand the product range. Tindall started The Warehouse on Auckland’s North Shore with a single shop.
Now 40 years later to the day, Tindall says he is proud of the progress The Warehouse had made to make homeware and everyday goods affordable for New Zealanders.
‘‘When I started it, we had just been through many years of import licensing and we had some reasonably healthy New Zealand manufacturing companies.’’
Import licensing heavily restricted what could be brought into the country, and was a measure designed to protect the local economy.
‘‘[Back then] it was almost impossible to import things, particularly items like clothing. You could import fabrics, so we imported things like sheeting and had them made up into sheets and duvet covers.
‘‘We had to start off for that reason with products that were available through the tendering of import licensing. Our early type of products were rattan and rice paper blinds, we were very big in basketware and a thing called buri chairs from the Philippines,’’ said Tindall.
‘‘In the early days one of our biggest suppliers was out of France, the Arcoroc brands, we imported a huge amount of that.
‘‘Things were very different in those days and we knew that lots of people would travel overseas to buy product, particularly to Australia for small appliances, so when import licensing was slowly but surely reduced and was able to be tendered for, then it was good timing for us.’’
The Warehouse grew very quickly from an original staff of five people working on the business full-time. It opened its second store in Papatoetoe twoand-a-half months after the first, and a third a few months after that.
In 1994, The Warehouse was floated on the New Zealand Stock Exchange and raised $32 million that it invested into opening a further 22 new stores in 18 months.
Tindall had ambitions to have The Warehouse stores across New Zealand and Australia very early on, but he never envisioned it would be an incorporated group as it is today, he said.
The Warehouse Group is made up of retail chains The Warehouse, Warehouse Stationery, Noel Leeming, Torpedo7 and online marketplace TheMarket.com. It operates 250 retail stores, 90 of which are The Warehouse stores, and employs 12,000 staff.
The team in its Northcote head office yesterday marked its 40-year anniversary with cake, videos and speeches. Staff were told they would be given one day of paid leave each year to undertake volunteer or community projects.
Asked about the state of retail and his hopes for the industry, Tindall said he hoped that food prices would be able to be reduced fast. Food price inflation now sits at 10.1% – a 14-year high, and has been on the rise through the year.
‘‘I would very much hope that somehow food prices can reduce and that something can happen there.’’ Tindall may just get his wish. While he says he has no input into the business today, The Warehouse Group has already begun to push further into the grocery sector.
The Warehouse first dipped its toes into food retailing and the grocery market in 2006. It operated three Warehouse Extra stores selling groceries and frozen food in Sylvia Park, Te Rapa and Whangarei, but exited the market in 2009 as a result of poor returns.
But 18 months ago it revisited its grocery plans and has again been increasing its focus on that side of the business, growing its product range within its The Warehouse stores.
It now has a wide range of goods outside of staples such as bread, eggs, butter, and milk, in all 89 of its red shed stores.
In its recent Q1 result, the group increased its earnings by 22% or $134m to $764m in its own first-quarter period.
The Warehouse posted record sales of $414m in the 13 weeks, up 39% on the same time last year – boosted by a 76% increase in grocery sales.
A lack of access to wholesale supply is the biggest barrier to the retailer growing its grocery range.
The Warehouse Group chief executive Nick Grayston said the retailer was committed to growing its grocery ranges and offering competitive food prices.
‘‘The unlock for us is access to affordable cost prices and the supply chain of the duopoly.’’