Thursday, February 26, 2009

Progressive greed

Last week I wrote about big business feigning concern for the public good in order to promote their narrow business interests. I called their slick PR move “one of the baldest examples of corporate greed”. A saga complete with similar tactics has just ended and it, too, is an example of corporate greed.

Australian-owned supermarket operator Progressive Enterprises fought the opening of a competitor’s supermarket using all sorts of legal manoeuvres to avoid competition—something they adamantly denied they were doing. Quite frankly, I don’t know a single person who believed their spin.

Two decades ago, New Zealand-owned cooperative grocery store chain Foodstuffs—the slightly larger supermarket operator in New Zealand—bought a large corner site in an area of North Shore City called Wairau Park. They fought for years to get the appropriate consents to build their “big box” Pak ‘N Save supermarket on the site, finally getting the go-ahead in 2004, and construction began.

Progressive started its manoeuvres and won a halt to construction; all Foodstuffs could do was close-in the building and make it weather-tight, but they couldn’t finish it or open the store. The legal manoeuvres continued four years as Progressive filed one silly objection after another.

Late last year, Foodstuffs cleared the final hurdle in the Environment Court, and moved to complete the store for opening early this year. Naturally, Progressive wasn’t done: They filed their final appeal and asked for a stay to prevent the Pak ‘N Save from opening while the legal manoeuvres went on.

In addition to supposedly fretting about the consents and District Plan processes, Progressive claimed they were interested in traffic flows a kilometre away from the Pak ‘N Save store. Yeah, right: They were clearly interested in preserving a near monopoly in the area. There are seven grocery stores in the “catchment” area of the Pak ‘N Save and—surprise, surprise—six of them are owned by Progressive. The seventh store they grudgingly sold to Foodstuffs only when ordered to do so during the merger of two Australian-owned chains; otherwise, they would’ve had all seven (this is ignoring smaller stores in the area that are clearly not supermarkets).

Progressive got a business group located a few kilometres away to join their objections, supposedly in the interest of their business area. Oh, and quite coincidentally—of course!—Progressive has a grocery store in that association’s shopping centre. No connection, of course, none at all, although Progressive had begun making threats about abandoning town centres if they lost, which would affect areas like the one the business group represented.

Yesterday, Progressive lost their final delaying tactic, as was inevitable: The High Court dismissed Progressive’s appeal. Foodstuffs hopes to have their new Pak ‘N Save open by May, bringing 250 jobs with it.

I’ve been a customer of various Progressive stores since before the Australians bought the chain, and I still am. I’ve shopped at one particular store—one of those six I mentioned earlier—for most of the years I’ve been in New Zealand, but clearly that loyalty has been misplaced. If they want to treat their customers as imbeciles, and with utter contempt, they shouldn’t expect to be rewarded for it.

When the Pak ‘N Save finally opens, I plan to shift nearly all of my business to that store. However, different stores carry different products, so it may not be possible for me to take all my business away from Progressive, much as I might like to. We’ll see.

At least this silly battle is finally over. I’d hate to see how much the companies have rung up on their lawyers’ tills.

Progressive’s stores are Countdown, Foodtown, Woolworths, Fresh Choice and SuperValue. Foodstuffs stores are Pak ‘N Save, New World and Four Square.

1 comment:

d said...

I can never keep the two different comapanies straight - glad you mentioned the stores at the bottom of your post! I was worried that New World was a part of Progessive..it's the only store within walking distance of our house.

I hope Foodstuffs was able to recoup some of the monies lost to the ridiculous lawsuits brought by Progressive!