Archive for 'Observations'

End of an Era

Supermarkets  – Once the only Place to be for the Modern Hunter/Gatherer.  Now just one of many options.

Countdown CEO David Chambers announced yesterday that he is moving on in June. Not an earth shattering event as such. Senior business leaders are constantly on the move, right? Yes, indeed; but there are a few aspects to Chambers’ tenure at Countdown/Progressive that are worthy of consideration. In the first instance, CEOs these days can’t typically point to a thirty-nine year employment record in the business they are leading. In fact, in most businesses someone with such a length of service has no chance to be offered the top job. Secondly, Dave Chambers is likely to be the last participant of the original Foodtown Management training programme who ends up in the top job at Countdown. The early Foodtown supermarket training model of the sixties and seventies was innovative, demanding and future focused, preparing its participants very well for coping with the challenges of modern food retailing and all it entailed.

“Modern” meant something different in those days though. When Chambers joined the training programme, stores were open five days a week, with a late night on Thursday. All store management positions were held by men, automatic replenishment systems were unheard of and computers were something Steve Jobs played around with in his garage. The Internet had yet to be invented, home shopping did not exist and all produce for Foodtown was purchased at the auctions.

We can safely agree then that Dave Chambers has seen a few changes in his career and that is without discussing the various ownership changes at Progressive, the demise of the Foodtown brand in favour of the Woolworths logo/Countdown name, the 180+ stores the company operates today as opposed to the 20+ branches the company had when Dave became a store manager and the many changes he would have seen in his stores over the last 39 years.

In those days, Foodtown stores did still have fully functioning butchery departments, with half beasts getting delivered to every store for processing each day. Today, stores are serviced via a centralised meat processing plant and the stores are void of butchers. A little known side benefit butchery departments provided their store managers with was instant security. When power cuts occurred, butchers were positioned at the checkouts, complete with meat cleavers and other suitable utensils to ensure that full supermarket trolleys did not start rolling out of the doors without their content having been paid for.

Chambers’ produce managers in his early store manager appointments in Foodtowns Kelston, Grey Lynn and Greenlane, were skilled in completely stripping and rebuilding mirror back displays, long before refrigerated cases became the norm. As head of produce during some of those years, I was in and out of our stores on a regular basis and knew all our stores managers. Dave Chambers stood out from the crowd even then, as a skilled professional with an appetite for knowledge and learning, an engaging persona, a willingness for constructive dialogue to achieve conflict resolution, a passion for food retailing and well respected by his staff – something he did not take for granted.

Dave, I wish you well in wherever your new journey takes you to.

Hans Maurer

Another Year Has Passed

Quintessential New Zealand

Quintessential New Zealand

I drove to Cape Reinga in November with a German visitor who was keen to see where the Pacific Ocean meets the Tasman Sea. We would have been able to see that spectacle of nature an hour earlier than we did, had it not been for appalling weather and a couple of sheep farmers who decided the conditions were just right to shift their mob a couple of kilometres up the road. On State Highway 1, in the teeming rain and amidst tourist drivers with bloody big camper vans and bugger all limited experience in driving these safely on the road.

One does not get to see too many mobs of sheep being moved about these days any more. Sheep numbers have halved since I arrived here thirty-six years ago. And if the current wool prices are any indicators, then the national sheep flock will continue to decline. Meat works used to be a dime a dozen, with one  being found in just about every provincial settlement. Gone as well. Progress. Dairy. Really? Milk powder prices, ok? Are they? Nope. And then there is Horticulture, agriculture’s little step sister – at least that is how we could be forgiven for feeling in the produce industry. We have a Minister for Racing and a Minister for Mine Re-entry and a Minister for Seniors, excluding Veterans because they have a Minister all of their own. A Minister for Children but also a Minister for Child Poverty Reduction because that is apparently a different matter altogether. And alongside the Minister for Agriculture, we will now have  a Minister for Forestry, a Minister for Fisheries, a Minister for Biosecurity and a Minister for Food Safety.

Where is the Minister for Horticulture then? Missing in Action by the looks of things. Yes, Horticulture is about growing stuff, so simplistically put its a bit like agriculture, isn’t it? There we are chaps. Problem solved. Just get on with it.

Well, alright then – but couldn’t we at least get a Minister for Not Building New Housing Developments on Prime Horticultural Land? Man, we do need one of those because if we keep on covering our prime growing lands with concrete, we will not be able in the long run to feed our people with New Zealand grown produce.  Unless of course we switch to urban horticulture .  But hang on – we haven’t got enough houses for all the immigrants we are letting in- and more to the point, our children, who have the audacity of wanting a place to live as well. So what do we do?

The terms ‘government’ and ‘strategy’ are not the easiest of bed fellows, unless, of course, ‘re-election’ is being strategised. Our three year electoral cycle does not help to focus the politicians on anything other than finding short term solutions. But somehow we need to cut through this Gordian Knot we are tangled up with, as trouble is looming beyond the horizon.

On that note, I wish  you and yours a Merry Christmas and a Happy New Year  – which hopefully includes a reflective period of sorts.


Hans Maurer  aka Sauerkraut


Hall of Mental Cultivation

may-july2011 293Translating a pertinent phrase from one language to another is always accompanied by challenges! This sign I saw in the forbidden city in Bejing a few years back though, is one of the better examples and has left a lasting impression with me. “Hall of Mental Cultivation” has a beautiful ring to it. ‘Hall’ – not room or closet or corner but ‘hall’, which immediately conjures up for me a wide and roomy space, yet defined because a ‘hall’ provides warmth and comfort. ‘Cultivation’ takes me down the process road as opposed to the ‘want it now’ attitude, and as a former nurseryman I can relate to ‘cultivation’ just like any fruit or vegetable grower. ‘Cultivation’ talks of effort, of skill and of patience. None of that instant gratification nonsense we are exposed to so often these days.  We could all probably do with at least a virtual version of our very own Hall of Mental Cultivation to keep us on the straight and narrow as the pace of change and the speed at which business is conducted is increasing.

The high cost of low prices

A few weeks ago we had the PMA Australia New Zealand Fresh Connections Conference here is Auckland. An all-round success in terms of attendance.  One of the industry stalwarts I bumped into there was Lex Wilcox, retired potato and onion grower/packer/shipper from Pukekohe and one of the brains behind the success of AS Wilcox Ltd in his day.  Lex has earned his retirement through decades of hard work for his company, the Pukekohe Vegetable Growers Association and the Vegetable & Potato Growers Federation, one of the predecessors of Horticulture New Zealand.

Catching up with Lex reminded me that he had sent me a 2006 article from the Sunday Start Times recently, entitled, “The high cost of low prices”, together with a philosophical statement by John Ruskin on the common law of business balance. Ruskin’s authorship of this ‘law’ can not be verified.  The one sentence version is “There is hardly anything in the world that someone cannot make a little worse and sell a little cheaper, and the people who consider price alone are that person’s lawful prey”.

Lex sent the article in response to my blog entry on “Supermarkets, Growers and Food Prices” which introduced an earlier Guardian article on the topic.  Long before the supermarket bread war kicked off last weekend.  Lex’s article makes interesting reading – as does the longer version of the Ruskin quote.

It is an interesting social dilemma that is being played out.  Supermarkets compete for market share on the basis of product/price specials. Nothing wrong with that.  Consumers have come to expect ‘hot deals’ every week.  And they’d better be good or they vote with their feet.  Should suppliers contribute to supermarkets lowering their retail prices to attract more shoppers through their door? I don’t see why not, as long as the consultation process is alive and well, suppliers are not expected to produce loss leaders on a scale that threatens the viability of their overall business and when accompanied with a ‘give and take’ attitude.

These bread wars are not the last product/price action we have seen.  The game is changing. Online shopping is gaining favour with consumers globally.  Brick and mortar investments into new stores are getting harder to justify and being caught in the middle is not a pleasant experience any longer.  Tesco is the perfect example right now.


Turducken Source: wikipedia

Source: wikipedia

December, 25th, 2013

This is a Christmas story of a different kind. As you read on, you may well think that I have lost the plot altogether, you may wonder where the Christmas connection  takes us, but rest assured there is a Christmas aspect to this story, one that reaches beyond the Christmas Day we are celebrating today in 2013. I watched the news last night and in addition to the guts and glory coverage that television news is all about these days there was a human interest story related to Christmas that that caught my attention. The central theme of the news item was a unique Christmas roast that few people had heard of, that was in increasing demand and had its origins in the Middle Ages.  The roast is called a Turducken, which is a chicken, complete with stuffing, stuffed into a duck and the duck then stuffed into a turkey. The news item featured a Farro Fresh Market and one of its founders was being interviewed about the Turducken phenomenon. A fascinating food story, told in an innovative fresh food retail environment. What a fantastic marketing opportunity.

Cut. Change of Scenery.

In 1996 I rejoined Progressive Enterprises, then owner of Foodtown, Countdown and Three Guys supermarkets and itself owned by Foodland (FAL) , then  a grocery co-operative in Perth, Western Australia. The management team was given three core objectives by the owners. Firstly, streamline the merchandise and operations departments run separately hitherto, into one effective system; secondly, develop the food retail concept of the future; thirdly, improve operating profits. By 1998, the first objective had been achieved. The category management and buying teams had been combined and the operations management structure had been merged into one. A new meal solution concept had also been established and it was being “road tested” at Foodtown Meadowbank. This concept reduced emphasis on selling ingredients and meal components and focused instead on providing shoppers with complete meal solutions depending upon the time they visited the store. An entire kitchen team inclusive of an executive chef was based at the store. The third objective, improving margins, proved a little more difficult.  Restructuring does take time and costs money.  The fact that the Foodtown and Countdown IT platforms were incompatible and needed to be reconstructed from the ground up did not help either.  Nor was margin growth assisted by the fact that the Countdown merchandise sales management & reporting process was a store by store affair which caused major difficulties in understanding category profitability across the group.

In early 1998 FAL lost patience with its New Zealand division – which they did not understand at the best of times.  To put this statement into perspective…Perth based FAL in the nineties was akin to a bunch Four Square grocers having come together and with Progressive they had a tiger by the tail.  The FAL owners understood the grocery business very well…but grocers are not necessarily known for their innovation and strategic foresight when it comes to fundamentally reinventing themselves. And having paid top dollar for Progressive when they bought the chain from the then Coles Myer a few years earlier, they wanted to see a return on investment.



Graeme Kelly, the CEO they had only hired a couple of years early was sent packing and after a short intermezzo by Barry Alty, a Kiwi grocer turned Perth based Aussie, FAL recruited Ted van Arkel, a Kiwi based grocer of Dutch heritage as Alty’s deputy and eventual successor.

Ted was a grocer from way back, Woolworths trained, who knew the grocery business upside down, back to front and left to right.  The Meadowbank innovation was initially parked for review and then quietly abandoned. The stores were refocused on the core grocery business, integration of operating systems was further strengthened and the bottom line started to show the improvements the owners in far away Perth were expecting.

Cut. Change of Scenery.

I am a father of three adult children these days.  Doesn’t time fly. My daughter works for a global market research company in Frankfurt, Germany.  My older son is both a history teacher and New Zealand naval officer (don’t ask…it’s complicated). My younger son has just finished a Bachelor of Design and Visual Arts (Photography) degree at Unitec and will hopefully find his fulfillment as an artist.

Earlier this year he started talking about Unitec wanting to essentially make the entire design faculty redundant. He was concerned about that, both from his perspective as well as from that of the affected staff.  Naturally, once these plans were made known to the lecturers, they were no longer entirely focused on the learning needs of their students. Unitec’s position was that the Faculty and the courses it offered needed to be realigned with the core focus of Unitec as a technical tertiary institution.   Reading between the lines….someone clearly thought that there was too much art going on and that the place needed to concentrate on churning out craftsmen instead of artists.

Staff got their redundancy notices on the day the students opened  their end of year exhibition – where they could have benefited from the support of focused staff.  Instead, the staff involved the students in black armband protests and other forms of “passive resistance”. It was not good to observe what was going on.

I had not fully tuned in when my son started talking about the demise of his Faculty.  Partly because I was busy with other things and partly because I knew that by the time these changes were due to take place in 2014, he would have graduated and be on his way.  So it was not until a couple of weeks ago that I went to the Unitec website to check on the composition of the Unitec Council. Interesting.

Cut. Change of  Scenery

Christmas is the time for reflection. When I reflect about how my shopping behaviour has changed in the last three years, I realise that I spend quite a bit of my time, and more importantly money, at Farro Fresh Markets.  They sell the food I enjoy eating. Their stores offer a mix between grocery retailing and retail theatre that I don’t find in the traditional Countdown, New World or Pak’ n Save outlets.  They sell decent Spanish and French wines for a fraction of the price one has to pay for local Pinot Noir.  Their cheese selection is a shoppers’ magnet. A Farro Fresh Market is not necessarily exactly what the 1996 Progressive team  had envisaged…but Farro is the closest to the retail concept Progressive had in mind back then…and their opportunity came when Progressive consigned anything other than the expert grocery model to the ‘too hard’ basket.

What are the big learnings here for me?

  • Horses for courses.
  • Timing is everything.
  • There is a difference between a supermarket and a Design School.
  • The consumers’ food procurement model is changing at a rapid pace.
  • The shopping model I grew up with does not  meet the needs of today’s consumers.
  • Thank God for options, choice and innovation.

The clock will tick over soon. 2013  becomes history and the fledgling 2014 will spread its wings. Let’s hope we can learn from past mistakes and avoid repeating them.

And the practice of stuffing birds within birds and serving them fried or baked at table seems to date  back way beyond the Middle Ages, right down to the Romans and their famous banquets.