CHAIN STORES

Nelson Evening Mail, Volume LXX, 21 May 1936, Page 9

CHAIN STORES

CHEMIST SHOPS IN N.Z. EVIDENCE AT INQUIRY (United Press Association) WELLINGTON, This Day. Evidence on behalf of Boots the Chemists (N.Z.), Ltd., was given yesterday nt the resumed hearing of petitions' for the exclusion of chain-store pharmacies by the Industries and Commerce Committee of the H°une ol Representatives. Mr W. J. Joraan, M P chairman of tho Committee, piesided! Mr F. C. Spratt appeared tor the Pharmaceutical Society, Mr E- ■ Hogg for the Friendly Societies ol New Zealand, Mr H F. O’Leary KU, and Mr W. H. Cocker for Boots the Chemists (N.Z.), Ltd., and H Johnstone, K.u, lor the h 0“ Drug Trades Association of Gieat Lindsay Saul, referring, to the statement made by Mr Spiatt, - say we have the support ot the medical profession,” said it appeared that this statement was based on < given Mr Rickard by Dr. G. I- • - son, chairman of the Council of British Medical Association of New Zealand. He produced the. iollowing letter from Dr. Anson, referring to the former letter“ This letter was merely intended to convey the fact that tlu executive of the association has lm* no complaints from its members as to the efficiency of the present phaimaeeutieal service of the Dominion to the medical profession, and was defimteij not intended to suggest that the Rntisli Medical Association was giving any support one way or the other m Um present controversy. The matter is not one within our province, anc as such has not come before our members. You have my authority to pioduce this letter at the Committee ol inquiry.” j

NOT LIKE AMERICAN STORES

The witness said lie had been employed for Boots for sixteen years, ano n-> was largely concerned with tlu. retail development of the company by the acquisition of new shops and the purchase of chemists’ businesses. F*fc described experiences in America, where the company had sent him to study conditions. He had there inspected a large number of drug stores. The chemist’s shop, as understood here, was practically non-existent in America,, not so much because it liao been crushed or submerged by chain drug stores, but because pharmacy in America, before the introduction of chain stores, was represented by the drug-store type, popular as a meetingplace. His company felt that, however well these drug stores might be adapted to American conditions, they were not suited to the taste of the British public. It had not copied their physical characteristics in England, and did not intend to do so here, nor did the company follow the drug' store policy of weekend sales, or of cutting lines below an economic price, temporarily or permanently, to convey a fictitious atmosphere of cheapness. No parallel could be drawn _ between the company’s shops in England and the drug stores of America. It would bt definitely shown that it was the company’s intention to stock only normal ehoinists' merchandise in New Zealand.

Chemists in England, in spite of the competition of company chemists and co-operative societies, as well as of the Woolworth type of shop, were in an infinitely stronger position than private chemists in New Zealand, said witness. It had been his experience in England that the opening of a new branch -:f the company had resulted in the creation of new and additional business, which would not otherwise have come about. The turnover, in fget, had not been at the expense oi existing chemists’ businesses. They took the view that lower prices brought the commodities within reach of an increased number of customers, thereby enlarging tile turnover of chemists’ commodifies generally, to the advantage of the public and of the trade itself. There, he suggested, was the reason why the private chemists of Great Britain had prospered and were prospering, in spite of Boots’ competition, while the private chemists of New Zealand were in the unenviable position revealed by Mr Heslop’s figures. Private chemists in England hgd been compelled to keep prices at a reasonable level, profiting by an increased turnover. In answer to a reference by Mi Sprutt to an immediate threat of the introduction of 24 chain shops, Mi Saul said that, subject to the results of the inquiry y his board’s policy woujd be one of gradual development-. If suitable businesses were offered them they would be open to consider them. “In Great Britain we have purchased a large number of chemist businesses, not under threat or by coercion, but on the basis of a willing buyer mid a willing seller,’’ he said. He was authorised by Lord Trent to say that when the company was in a position to justify by actual trading figures any invitation to capital subscription, it would give favourable consideration to an issue open to the New Zealand public. BOOM FOR COMPETITION ‘‘Quite apart from any advantages which the erection and operation of a faetpry may confer on the community,” concluded the witness, “pur contention is that our retail establishments will contribute to the well-bellin' of the general public, especially the poorer sections of it, upon whom up to now the expense of heavy illness must have borne heavily; that our shops in Great Britain have not caused unemployment or distress there among pharmacists, and that the fears of many pharmacists here on that subject are exaggerated; and that there is room in New Zealand as in Great Britain for healthy competition between the private chemists and our company, to the ultimate advantage of both.”

Duncan Scott Henderson, general manager and director of Boots the Ohomists (N.Z.), Ltd., said thitt the company had been operating in Wellington for three months and hoped to open Auckland premises in a lew weeks. In addition to the purchase price of its property, they bad spent ±15003 in structural alterations, fittings, and New Zealand labour and material in Wellington. Up to 31st March last they hud bought goods to the value of £5500 from New Zealand sources for sale in Wellington. lie described the company's policy in England in relation to its staff, and stated that such a policy would be carried out in Now Zealand and that all advantages and privileges given in England would be extended to employees here as far as possible. The policy would be to employ practically all New Zealand staff, bringing from England only the minimum number of senior assistants to train the New Zealand staff, and even this would be discontinued when there had been time to train a New Zealand staff. Selected members of Die New Zealand staff would be sent to England !o qualify them for responsible positions on their return, He gave

particulars of the wages paid by the company and of prescriptions and packed "°Mr Henderson gave figures to show that Wellington chemists had been affected by the opening of Boots to the extent of only one prescription a day. The average cost plus dispensing fee of Boots’ prescriptions was 25 per cent, lower than the flate rate in force up till the time of the firm s opening.