Latest / Best of Business / Patrick Noone: former Costco NZ managing director on Labour and National pledging to make Foodstuffs changes

Transcript

Patrick Noone: former Costco NZ managing director on Labour and National pledging to make Foodstuffs changes · Best of Business

• 0:09
  Speaker 1: You're listening to a podcast from Newstalk ZB. Follow this
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• 0:17
  Speaker 2: Both major parties are now promising to, in one way
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  Speaker 2: or another, smash up the supermarket sector if elected. Labour's
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  Speaker 2: announced yesterday that they would force both Foodstuffs and Woolworths
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  Speaker 2: to split their wholesale business from the retail. And National is,
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  Speaker 2: of course, planning to break pack and save off of
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  Speaker 2: New World. Patrick Nguyen is the former managing director of
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  Speaker 2: Costco New Zealand and with us.
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  Speaker 1: Hi, Patrick.
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  Speaker 3: How are you?
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  Speaker 1: I'm very well, thank you. Do you have a favourite
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  Speaker 1: of these two policies?
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  Speaker 3: Yeah, I looked through both of them today and I
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  Speaker 3: think the national one is probably better overall. And I
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  Speaker 3: think we could take a couple of things from the
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  Speaker 3: Labour policy and pin it on there and come up
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  Speaker 3: with a really good, sound strategy for New Zealand food
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  Speaker 3: products or food sales.
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  Speaker 1: What are the things you would nick off Labour and
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  Speaker 1: attach to the national policy?
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  Speaker 3: Well... Just looking at a couple of things there. The
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  Speaker 3: unfair contract should be ended. I think that's straightforward common sense.
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  Speaker 3: Junk fees banned, that should be done as well. Smaller
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  Speaker 3: supermarkets guaranteed access to wholesale supply. Absolutely. That should all
• 1:20
  Speaker 3: be in place. As far as separating the wholesale, I
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  Speaker 3: don't see that as a big advantage. I think it's
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  Speaker 3: better to have people at the retail front chasing your
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  Speaker 3: business and you'll get much better service and probably better
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  Speaker 3: pricing as well by having that in place. So I'd
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  Speaker 3: combine both policies together and you come up with a
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  Speaker 3: great strategy for New Zealand.
• 1:42
  Speaker 1: Do you think this is going to change any other retailers,
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  Speaker 1: maybe Costco's investment plans in this country?
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  Speaker 3: I don't think from I'm retired from Costco, so I
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  Speaker 3: can't talk for them. But from my perspective, after 33
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  Speaker 3: years there, I don't think so. Costco has a different
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  Speaker 3: retail format and has a different marketing plan. So I
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  Speaker 3: think that they see New Zealand as open for business.
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  Speaker 3: And I believe now they've announced the second one in Auckland.
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  Speaker 3: So they'll continue on that journey and they'll have a
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  Speaker 3: different member experience there. As far as other retailers from
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  Speaker 3: around the world, again, I don't think so. I think
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  Speaker 3: New Zealand market, if it becomes more competitive, it just
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  Speaker 3: means that other vendors like Lidl and Aldi would probably
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  Speaker 3: under-trade anyways, under-trade and cut prices, which would make the
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  Speaker 3: entire market more competitive. So no, I don't think that's
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  Speaker 3: a big problem at all.
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  Speaker 2: Are you surprised it's got to the stage where we're
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  Speaker 2: discussing this? Because this was not a subject of discussion
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  Speaker 2: about 10 years ago, right?
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  Speaker 3: That's right, yeah. But the last couple of years, I
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  Speaker 3: think because we haven't seen a lot of foreign investment
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  Speaker 3: or even local New Zealand companies getting into the supermarket business,
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  Speaker 3: it's inevitable that when you have two big companies like
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  Speaker 3: this that own the market, I think 90% of the business,
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  Speaker 3: that it can't go on like that if you want
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  Speaker 3: lower prices or better service. You need more competitors in
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  Speaker 3: the business. And what happens when you have two or
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  Speaker 3: three people chasing your business? You get better deals and
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  Speaker 3: you get better service. So I think it's probably the
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  Speaker 3: right way to go.
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  Speaker 1: Thank you very much, Patrick. Appreciate it. Patrick Noon, former
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  Speaker 1: Costco Managing Director.