Forum Archive Index - December 2003

["Karyn W" <karyn_in_oz@hotmail.com>]

Brian Gaynor got it right.  The Warehouse should have taken some time to 
work out whether or not their approach of standalone shops would work in 
Australia as well as it has in NZ.  If they had, they would have realised 
very quickly that its NOT a successful formula at all.  Just like Pizza Hut 
- they've bought an underperforming business, thought they could turn it 
around, but have failed to realise that consumers in Australia just dont 
behave like consumers in NZ.

In Australia people dont want to drive miles just to go to one shop.  There 
is no spare real estate in the inner city areas (and if there were there 
would be an apartment building being built on it!) so big barn like retail 
outlets are relegated to the outer suburbs.  It takes about an hour to drive 
from the city out to those suburbs.  So who would want to drive that far 
just to save a few bucks on hair shampoo or plastic containers?  This is the 
first major difference between NZ and Australia - driving distances and time 
dictate where you shop.

Aussies love to shop at the gigantic malls, which contain everything that 
you could possibly need, are located close enough to their home and the 
major freeways to be able to get to in under 20 minutes.   Chadstone in 
Melbourne is over 90,000 sq metres of retail space (with another 40,000 sq m 
proposed), Westfield Parramatta is 113,000 sq metres in size.  All of these 
malls contain four or five "discount" chain stores that sell the same stuff 
as the Warehouse does, enough to allow you to shop around for the best 
price.  Why go anywhere else?

In addition, Coles Myer is hell bent on regaining a healthy share price, and 
have heavily invested in re-establishing KMart and Target over here as the 
discount stores of choice.  Both these stores are located in the big malls, 
and spend a fortune on advertising (think McDonalds!).

But the real nail in the coffin is the presence of small bargain stores on 
the main streets of each and every suburb.  What NZ does not have, but what 
Australia specialises in, is the small locally owned and operated, sole 
proprieter shops.  Each suburb has a main shopping strip, full of small 
stores.  My suburban street strip contains 5 of these little "$2 type" 
stores, and if I need anything I walk down the road and buy it locally.  
They are run mostly by Asian immigrants, and everything is imported from 
Asia and is dead cheap.  If 5 little "Warehouse" type stores can do enough 
trade on one street in one suburb to stay in business, is it any wonder that 
a large store miles out of town is not doing any?

Importers also work on a huge scale.  Usually every weekend the local or 
city town hall or exhibition centre is having an "importers clearance sale" 
of books, toys, DVDs, CDs, manchester, rugs, etc.  And for even more choice, 
there are the multitude of "Markets" - where you can also buy pretty much 
everything you are looking for as well as pick up your fresh meat and 
produce.

But for a personal anecdote - I have been here for 2.5 years.  I have seen 
Warehouse ads on TV only twice.  I have never seen a Warehouse store in 
Melbourne, and I do not have a clue where any of them are located (they dont 
even tell you in the ads!).  And I am alert to the brand!  Is the Average 
Aussie shopper really going to go out of their way to track down a store 
that they have never heard of, and drive miles to get there, when what they 
want can be bought just down the road or the next time they are 
clothes/supermarket/book shopping in the mall or market?

I loved the Warehouse when I lived in NZ.  It was always first choice when I 
needed to buy something that it sold.  However, here in Australia I have no 
desire or need to visit that type of store, and certainly would not make a 
special effort to drive to it.  I shop locally first, then the discount 
stores and Kmart in Chadstone Mall, then Sth Melbourne market (in that 
order).

On the other hand, I have seen Glassons and Michael Hill stores over here.  
As has every other Australian who's ever been in to a shopping mall.  Guess 
that explains their sales success :-)  I am now watching TNZ with interest 
here ...

Karyn

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