CHAIN STORE SYSTEM

Southland Times, Issue 22991, 10 September 1936, Page 6

CHAIN STORE SYSTEM

HEARING OF EVIDENCE BEGUN LICENSING SUGGESTED (United Press Association.) Wellington, September 9. A suggestion that retail stores should be licensed to prevent chain stores from operating in New Zealand and also to prevent bargain stores from stocking small quantities of certain lines was made to the Industries and Commerce Committee of the House of Representatives, when the first of the evidence on a petition from retailers in Blenheim was heard. The petition alleged that the chain store system was not in the interests of the community in general, and asked for legislation to protect the interests of individual traders. The evidence and examination of the first witness called occupied the whole morning, and it is expected that the whole investigation will extend over a long period, as several hundred witnesses are to be called. It was stated to-day that bargain stores were “picking the eyes” out of lines stocked by all classes of retailers and consequently spoiling business for other people. It was also claimed that unfair competition was made possible by reason of the buying power of chain store organizations and legislation was suggested to control both these features. By questions one counsel established the fact that individual traders had combined their buying power to reduce the cost. Penal Taxes. Two penal taxes were suggested by a supporter of the petition. The first was a straight-out trading tax, increasing steeply as the number of stores increased, so steeply that the witness admitted that a tax of £1,943,000 would have to be paid for a chain of 10 stores, and a second providing for a similar tax, unless at least 60 per cent, of the articles required for a particular trade, as. for instance, drapery, was stocked. The first tax, witness said, would limit buying power and the second would prevent bargain stores from “picking the eyes” from other traders’ lines. Mr J. D. Mcßobie, of Blenheim, in support of the petition, contended that chain or bargain steres employed a large proportion of girls and only a small proportion of senior labour. The individual stores employed women who would not be able to secure employment if the stores were put out of business, because the chain stores employed young girls, and when they were old enough to receive top rate wages, they were discharged at an average age of 21, and at that time of life they were not wanted by other stores. It was too late to study another trade, so what was left for them? They were placed in an unfortunate position, because work in factories was not available for them. The same thing applied to youths. Only a few were kept on for executive positions. Purchase of Goods. Mr Mcßobie went on to deal with aspects of trade where chain stores were able to purchase their goods more cheaply than independent traders, and as a result, were able to place them before the public at a much lower price. It was a striking fact that no proprietors or managers of chain stores took part in civic activities, he added. The Minister of Industries and Commerce (the Hon. D. G. Sullivan) said that when he was Mayor of Christchurch, both the managers of Woolworth’s and McKenzie’s worked hard on his relief committee. Before the chain stores opened, Mr Mcßobie said, the profits of business had been spread, but now the profits of business were going to big combines, instead of individuals. In Blenheim four grocers had been put out of business and prices to-day were higher than they had been. If that sort of thing was to go on, three-quarters of the retailers would be shut down and the council would be at its wits’ ends to get their rates. The chain stores claimed that they had reduced the cost of living. He admitted that goods were cheaper, but it had been done by forcing manufacturers to take uneconomic orders and by encouraging “backyard” factories. The inquiry was adjourned till to-