Forum Archive Index - March 2004

["david.gibson" <david.gibson@k.co.nz>]

>Didn't Tindall begin in Australia by taking over 2 struggling bottom
>end Australian chains (Sollys Crazy Bargains, forget the other)

Silly Solly's and Crazy Clints, from memory (one for the naming police -
crimes against alliteration)

I remember the early days of the Warehouse very well.  Do you remember
"Cargo King"?  The two organisations were locked in mortal combat in the
"bargains" end of the retail spectrum.  These were the days in which the
"respectable" classes shopped at Farmers.

The Warehouse triumphed - Cargo King slipped into liquidation.

However, the hard lessons from the early days lead to a number of points of
focus for the Warehouse, even to the present day.

1)  Supply chain automation - my understanding is the Warehouse is second to
only Walmart in the US in terms of its automation of inventory/purchasing
systems.  The Aussie retailers don't have a comparable edge.

2)  "Triple Bottom Line" - the organisation enrols staff and customers in a
motivating "culture" - given its NZ origins, this could be termed the
"Whare-house culture".  With an organisation like the Warehouse, its people
are an important "leverage point".

The battle in Australia will be messy and protracted.  The incumbents will
use margins and supply relationships to contain Warehouse market share
gains.  The Warehouse will need to trade margin for market share.  However,
long term, the broader "Whare-house culture" is the "irresistible force"
being applied to the incumbent Aussie retailers "immovable object".

Also remember:

1)  A number of external factors, like Australia's increasing free trade
agreements, will also support Warehouse gains as this will "level the field"
in terms of supply relationships.

2)  The investment base for funding the Australian beachhead is the
increasing dominance of the Warehouse in the NZ market.

Disclosure:  Hold WHS.NZX

/dbg






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