CHAIN STORES

Evening Post, Volume CXXII, Issue 67, 16 September 1936, Page 13

CHAIN STORES

ANOTHER PETITION

EVIDENCE FOR RETAILERS

INQUIRY CONTINUED

Another, petition asking for legislative control of chain and department stores in New Zealand was before the Industries and Commerce Committee of the House of Representatives today when the inquiry into the trading of such stores was continued. The petition is signed by approximately 10,000 retailers throughout New Zealand and was supported by detailed evidence given by Mr. A. D. Wylie, of Wellington.

For the purpose of checking the activities of chain and department stores, Mr. Wylie suggested the prohibition of direct trading betwfien manufacturers and retailers and the adoption of a double system of licensing, somewhat similar to that suggested by Mr. J. D. Mcßobie, of Blenheim, when he supported the petition of Blenheim retailers a week ago, but not so steeply graded. Mr. J. Hodgens (Palmerston North) presided.

Giving evidence in support of the petition, Mr. Wylie said there were over 10,000 signatures of retailers to the petition, and, in addition, he had a petition signed by many manufacturers and merchants who were in full sympathy with the massed retail traders' petition; Mr. Wylie said that there were dairy co-operative companies that indulged in "cut-throat" competition. At Ruawai fourteen shops had been reduced to one by such competition. The question of dairy companies operating as trading concerns should be investigated by the Government. The farmer should not be allowed to have it both ways. The business community was taxed to supply subsidies to farmers, especially through the high exchange, and yet the dairy companies were allowed to undermine the business community by their trading. The Ruawai Dairy Company operated in all classes of business and showed a loss on its trading operations.

Healthy competition had not been present in many industries during recent years, he said, because of the cutthroat competition of chain and department, stores and also dairy companies. There was unhealthy and unwarrantable "decoy" selling which was uncalled for and should be discouraged in the interests of the public and the Government. . LABOUR AND PKICES. Would union labour consent to cut prices of labour? he asked. And yet the products of that labour were sacrificed to provide ammunition for those who apparently lacked the vision to see the results of their so-called intelligent buying. A good example of this class of trading was the bread war which was waged between the chain stores and the small grocer. The bakers were largely to blame because they had supplied the bread that was sold to the detriment of their own interests. There was a parallel at the present time where the grocers were selling pork sausages at 4d a lb, although the butcher's price was 8d and the price of pork on the hoof was.sJd a lb. Fruit was used as a "decoy" in the same way. .■.■..-..■

What actually happened, as a..result of this type :6f trading- was that the public secured goods at prices to which it was not entitled, the manufacturer was robbed of his fair profit, and a false standard of values was created in the minds of the consumers with the- result that the ultimate end was the reverse of what was desired.

"In presenting :this great petition to Parliament," said Mr. Wylie, "I.wish to make-it quite clear from the outset that we are'not demanding anything but protection from cut-throat competition. We are appealing that we may protect ourselves, through the grace of our Government, against the menace of trade wars with great capitalised monopolies which we cannpt possibly overthrow. Our petition is definitely not a move to raise the retail selling prices of commodities; all we ask is that we be granted the privilege to earn sufficient to live comfortably upon, after paying reasonable wages to our employees and all other businessdisbursements."

Mr. Wylie dealt with the position in South Africa and made numerous quotations from statements made regarding the position in that country. He also dealt extensively with the activities of Boots (N.Z.), Ltd., and said that every class of business man must assist: the Chemists' Guild to stop their activities in New Zealand. FREEZING WORKS AS RETAILERS. The case of the butcher would also stand investigation, he said. Grocers and dairies stocked certain butchers' lines and combines and trusts, in the name of freezing works, were conducting cut-throat competition in opposition to the retail butcher. Sausages were sold at 3d a lb, although the casings cost from 1 l-8d to lid to every pound of sausages. Saveloys were sold for 6d a 1 dozen against Is in the shops, and although butchers had to pay 7Jd a lb for lamb he had bought lamb from a freezing works for | 5Jd a lb.

On behalf of the retail fruiterers and greengrocers, he asked that they should be licensed to sell fresh fruit and vegetables'only, and that unfair trading by grocers in these lines should be checkedI'by legislation. On behalf of the mass of retail traders, he said, it was considered that fruit shops should be compelled to observe the same hours as butchers, grocers, etc.

Mr. Wylie went on to deal in detail with Woolworths (N.Z.), Ltd., and said that a simple way of checking chain and department stores, was by licensing ?nd classifying.

■^here must be what he would term a trade cycle from the manufacture! to the wholesaler or merchant, to the retailer, to the consumer. If the wholesaler were eliminated approximately 18,000 employees would be displaced throughout New Zealand, and it was better for the welfare of the country that the consumers should have to pay approximately 1 per cent, more to keep these 18,000 persons in employment. If they had to be supported on public works at the expense of the employed through indirect taxation the increase to be paid would be approximately 2J per cent.

He suggested that the manufacturer should be compelled to sell his goods to the wholesaler and not direct to the retailer. Then the wholesaler would in turn sell to the retail shopkeeper, but would not be allowed to sell direct to the consumer. The prices of manufactured articles from manufacturer to consumer would be controlled by a fixation of the maximum profit of 20 per cent, from the manufacturer to the retail shopkeeper. From the retail shop to the consumer he suggested a maximum of 25 per cent., which, he said,- would encourage healthy competition.

INCREASING PRICES.

"That means that the chain store grocer will bo forced to raise lii.s price to a reasonable standard so that the independent grocer will obtain a fair

living," said Mr. Wylie. "It will also place the country grocer in line with the town grocer as regards price. No retailer wishes more than a reasonable amount to live on, plus his disbursements, such as rent, wages, and general overhead. We consider that the 20 per cent, basis from manufacturer \ r retailer will bring the cost of living down by a very large margin.

"We admit that merchants have amassed fortunes' out of the retailer in the past, but, in the future, if the merchant does not wish to meet the retailer reasonably, it will be found that the latter will combine buying efforts and deal direct with the manufacturer. He docs not wish to do this if it can be avoided, because he realises that it will throw thousands of men on the unemployed market.

"We want the Government to bring' down definite legislation on these points, but we do not look upon them as Socialistic measures in any Sense or form. We consider them to be commonsense measures which were, inciden-| tally, advocated originally by the last Government, and endorsed by the | Labour Party, their object being primarily to give traders protection. It is definitely not a party measure, but, rather a universal measure of intelligent facts. We have passed resolutions definitely assuring the Government of every possible support so long as it carries out its promises, which were! part of its campaign platform, namely, 'that the small business man shall have more than his mere name over the door.'" LICENCE FEES. Discussing the classification of department stores as a means towards checking their • activities, . Mr. Wylie suggested that the various trades should be classified under definite headings and that licences should be issued on a "step-up" basis. For chain stores he suggested a licence fee of £1 for the first shop, £10 for the second, £25 for the third, £100 for the fourth, £200 for the fifth, £400 for the sixth, and so on.' For department stores he suggested a licence fee of £1 for the first department, £2 for the second, £5 for the third, £10 for the fourth, and thereafter the same rate of increase as in the case of chain stores. On that basis a chain of ten shops would pay £12,736 as shop licences, and if the ten shops carried ten departments each under the classification they would pay another £127,280 in department licence fees, or a total of £140,016. Such fees, he, said, would not hurt the powerful organisations because they would be able to pay the taxes out of the extra profits under the scheme suggested.

The inquiry will be continued tomorrow morning when Mr. Wylie will submit further evidence.