CHAIN STORES

Evening Post, Issue 86, 8 October 1936, Page 10

CHAIN STORES

PETITION OPPOSED

FOOTWEAR SHOPS

TURNOVER SAVINGS

The inquiry into the operation of chain and departmental stores in New Zealand, which originated in a petition to Parliament from independent retailers, was continued by the Industries and Commerce Committee or the House of Representatives today. Evidence was tendered against the petition by representatives of a chain of boot and shoe stores and farmers' cooperative associations in New Zealand. Mr. J. Hodgens (Palmerston North) presided.

Mr. W. P. Shorland, who appeared for R. Hannah and Co., said that his client opposed the petition on the ground that the petition was opposed to a chain of shops. Hannahs were not concerned with the opposition to department stores, as the company's 41 shops dealt in footwear only. The shops stocked large quantities of goods manufactured in New Zealand, and he submitted that taxation that would force the company's shops out of business in favour of independent shops would be detrimental to the interests of New Zealand manufacturers, tanners, and others. Evidence was given by Mr. E. R. Norman, a director of R. Hannah and Co., who said the firm had manufactured footwear and operated a chain of shops since its inception in 1874. Its policy had been to buy existing businesses when branching out and it had always endeavoured to sell goodquality footwear at a low price. The extent of the firm's trade had enabled it to select men who could buy to the best advantage, and the turnover kept costs down. The firm had a fixed national price which meant that small centres were not exploited. The opening of a branch had led to prices being reduced by as much as 15 per cent, in the centre affected, an indication that the firm sold its stock at reasonable prices. One allegation made by the representative of the petitioner was that chain stores did not give a full service to the public, but Hannahs had always given a full service and stocked lines that many retailers "fought shy of" because they wei'e not profitable. EMPLOYING OPERATIVES. .The opening of another branch, said Mr. Norman, led to the employment of approximately seven more operatives in the manufacturing department, the firm, by reason of its turnover, being able to concentrate on local goods more than the individual trader, who found it more profitable to buy from the mass-production manufacturer overseas. . Mr. Norman dealt in detail with the wages paid by his .company and said that in the majority of cases no reductions had been made during the depression. The majority of the employees remained for long periods and one had just retired after 50 years' service with the firm. One of the directors had started with the firm in his youth and the same applied to the firm's. buyer. The prospects of promotion were good. In reply to Mr. G. G. G. Watson, who appeared for Woolworths (N.Z.), Ltd., J. R.. McKenzie, Ltd., and Macduffs, Mr. Norman said the department stores had developed the slipper trade in New Zealand, and their activities had also led to an increase in the manufacture of hosiery in New Zealand. To Mr. C. R. Petrie (Hauraki), Mr. Norman said the small retailer could buy as advantageously as the larger firms in small lines and where fashionable lines were concerned the small man had an advantage' because he could buy a small quantity and sell it,' whereas the chain had to buy a large quantity and might be left with out-of-date stock. Hannahs claimed other advantages but did not believe they could ever supply all requirements. . CO-OPERATIVE TRADING. Mr. J. H. Russell, general manager of the Farmers' Co-operative Wholesale Federation (N.Z;), Ltd., said that his organisation serviced farmers' cooperative associations throughout New Zealand and these affiliated associations had a total ' turnover of £12,000,000 to £14,000,000. The actual merchandise turnover was considerably less, but as an instance the merchandise turnover of the Farmers' Co-operative Auctioneering Co. was in excess of £500,000. The farmers' co-operative movement had grown throughout New Zealand for fifty-five years, the various organisations being founded by farmers as a measure of self-protection against proprietary interests. The main purpose was to help the farmer with finance, to sell his stock and produce, and to supply him with farm and household requirements. But for these associations wool commissions would have been higher and finance during the past twenty years would not have been. available on such easy terms as it had been.

The shareholders in the various associations were the farmers themselves and the business was conducted in the interest of farmers. . During the depression years the associations had stood behind the farmers and had carried them through that difficult period. It could not be said that they were in the same category as proprietary chain stores, nor could it be said that their profits were excessive. Similarly the conditions of employment in the stores could not be challenged, and fair wages were always paid. The associations constituting the federation had 35,835 shareholders, a paid-up capital of £2,145,865, and employed 2216 workers. Rebates were paid to shareholders, he said in reply to the Minister of Industries and Commerce (the Hon. D. G. Sullivan), but they could not be held to be price-cutting because they were on purchases over a period and not on articles purchased. The Committee adjourned until 10 a.m. on Wednesday next.