In New Zealand, Concerns Growing as Big Boxes Multiply

Date: 1 Nov 2002 | posted in: Retail | 0 Facebooktwitterredditmail

Citizens and community organizations in New Zealand are beginning to take action to curb the spread of chain stores and big box retailers. “The big box phenomena has had a huge impact,” says Warren Snow of Envision New Zealand, a community development company. “In the same way that Wal-Mart has decimated the main streets of America, New Zealand towns and suburbs are also buckling under the might of big box retailers.”

New Zealand has long had discount department stores. But traditionally they were relatively small and located along main streets, where they co-existed with numerous locally owned businesses. Today, corporate retailers are building massive stores on cheap land far from town centers, harming the vitality of downtowns and forcing many independent businesses to close.

New Zealand’s biggest retail company, The Warehouse, has modeled itself after Wal-Mart, with large edge-of-town stores that offer a wide range of merchandise. Founded in 1982, the Warehouse operates 78 stores in New Zealand, along with 120 outlets in Australia, and took in $NZ 1.89 billion ($US 900 million) last year. New Zealand has a population of 3.8 million.

Like Wal-Mart, The Warehouse has begun abandoning older stores to build even larger outlets further out on the periphery. In Hamilton, the company plans to vacate at least one of its three stores after it opens a massive store along a road slated to undergo several other big box developments. In Wellington, New Zealand’s largest city, officials are currently reviewing plans to construct a retail park with twelve megastores near the airport.

“There has been a stunning lack of debate in New Zealand of the pros and cons of allowing big box retailers to build stores where and when they like,” says Snow.

But that is beginning to change. In September, Envision New Zealand organized a nationwide tour of Micha Peled’s documentary Store Wars, the story of Ashland, Virginia’s fight against Wal-Mart. The screenings drew as many 220 people and generated national and local media coverage. Each was followed by an audience discussion of ways to strengthen community-based enterprise.

Based on the success of the tour, Envision New Zealand will be establishing a web site and email listserv to disseminate information. “The problem is that all the information given to town officials is provided by the big corporations wanting to build stores,” contends Snow. What they don’t mention is that much of the revenue will be taken from existing businesses, many of which will close, causing a ripple of decline. “Local lawyers, accountants, shop fitters and trades people all miss out as their local clients go out of business,” says Snow.

Snow was hired by Stephen Tindall, founder of The Warehouse, in 1995 to set up his foundation, the Tindall Foundation. Snow left the foundation in frustration in 2000. “I found I was going into communities to arrest social decline and the source of the money I was giving them was actually the cause of the decline, The Warehouse.”

Another activist, Judith Bell, recently had her name legally changed to Stephen Tindall to draw attention to the impact of The Warehouse. “The Warehouse buys a fraction of products from New Zealand, so all our wealth is going out of the country, mostly to China,” she says. “And manufacturers here can’t compete with labor rates abroad. . . so they’re going out of business.” Snow points out that since the Warehouse was founded in 1982, New Zealand’s trade balance with China has shifted from a $NZ 69 million surplus to a $NZ 1 billion deficit.

“It’s time to stop and question the real bargain that we are all getting,” contends Snow. He is urging communities to adopt new policies that limit the size of new retail stores, require that they locate in existing town centers, and provide for a comprehensive review of their potential economic and community impacts.

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Stacy Mitchell

Stacy Mitchell is co-director of the Institute for Local Self-Reliance and directs its Independent Business Initiative, which produces research and designs policy to counter concentrated corporate power and strengthen local economies.