August 7, 2024 • 35 mins
Foodstuffs chief executive Chris Quin shares his best and worst money stories with Liam Dann.
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Speaker 1 (00:05):
Again.
Speaker 2 (00:06):
Hi.
Speaker 1 (00:07):
I'm Liam Dan, New Zealand Herald Business Editor at Large
and welcome to this episode of Money Talks. This is
a podcast about money, but we're not going to tell
you how to get rich, and we're not going to
try and pick the next interest rate move. In this series,
I'll be talking to interesting New Zealanders about how money
has shaped their lives and what they've learned over the years.
(00:30):
For today's podcast, I'm joined by Chris Quinn, CEO of
food Stuff's North Island. They run Pack and Save New
World and for Square Supermarkets. Chris is also the CEO
designate of the proposed merger of food Stuffs North Island
and South Island Cure. Chris, Welcome to Money.
Speaker 2 (00:45):
Talks, Thanks Liam, and thanks for having me. Yeah.
Speaker 1 (00:47):
Look great. Look we'll dive into the usual money talk stuff.
But I guess maybe because it is a bit of
the elephant in the room, what's up with the Commerce
Commission proposal at the moment you're sort of watch and
wait at the moment.
Speaker 3 (01:00):
So we've been in a clearance application process for the
Comments Commission since middle December. There is three possible stages
in those applications, so they've chosen just last week to
go to a third stage, which is a statement of
unresolved issues. So they feel that there are still a
narrow set of issues that need to be spent more
time on. So they've just advised us last week that
(01:22):
they need about three months to do that. So that
will take us through to the first of October, where
will get the next update on their decision around clearance.
We've had our shareholders vote nine percent in favor of
doing this. We've done our other work, so we're very
keen to get on with the benefits of this for
our customers, but we need to respect the process and
work through it.
Speaker 2 (01:43):
Yeah.
Speaker 1 (01:43):
Sure, I mean there's obviously a lot of scrutiny about
supermarkets and the feeling that is there enough competition and
because we've just been through this inflationary period, prices have
been really in the spotlight. How much do you think
the average shop is going to notice this merrige? Is
it a back end? You know? To what extent is
it actually going to have a meaningful impact on one
(02:05):
way or the other? Do you think?
Speaker 2 (02:07):
Yeah?
Speaker 3 (02:07):
Look, firstly, we get the scrutiny and the prominence I
guess of the sector. There's not many organizations that are
a New Zealand household deals with two and a half
times a week. And we know in a cost of
living time where things are tough for a lot of households,
you know, our percentage of what makes up weekly household
cost is decent. It depends on where the house is
at in terms of mortgage or rental or ultricity, in
(02:29):
various things. But we're right amongst the top household bills.
So we understand and we respect it, and we need
to be accountable back to New Zealanders for what's happening
in terms of food price, in terms of this merger,
you know, we number one thing for New Zealanders right
now by far, and choosing where to shop is price.
You know, they look around for the deals. It's a
very competitive.
Speaker 2 (02:48):
Market from the point of view.
Speaker 3 (02:49):
If you can shop in another store tomorrow, there is
nothing binding you to one of our stores. There's also,
in our view, nothing in the way of anyone entering
this market if they see an opportunity. And you know,
in a time where we're talking about infrastructure quite a lot,
you know the capital required.
Speaker 2 (03:06):
I don't think many New.
Speaker 3 (03:07):
Zealanders probably understand the size of these businesses, you know,
a medium to large supermarket employees hundreds of people, deploys
tens of millions of dollars of capital, and in the end,
we return about four cents in the retail dollar in
terms of profit back into the business. So we understand
the scrutiny. That's why we've been quite transparent about price
versus price increases and cost increases. And while we're proposing
(03:32):
this merger because it's the biggest thing we can see
to cut our back end costs, but make no difference
to the number of stores in New Zealand, who owns
those stores, the level of retail competition. We will still
have the same family in the same community own the
same store after the merger. We'll just cost lest as
a business to run that must make a difference over
time to the price of products.
Speaker 1 (03:53):
Sure, yeah, okay, Look, we can come back to a
bit of you know, chat about groceries and things. But
I want to jump right back now and ask you
if you've got a very early memory of money, what's
the first memory you have of sort of holding money
in your hand and that sort of thing.
Speaker 3 (04:07):
Look, it's interesting, I don't know that I can remember
the first time I held money. I remember post office
savings bank.
Speaker 2 (04:12):
Pass box at school.
Speaker 3 (04:14):
I remember the handwritten numbers, which you look back now
and think it was never wrong. So you know, maybe
technology hasn't helped us that much. And I do remember
it wasn't money, but it was sort of trading in business.
So when I was at intermediate school, we're talking seventies,
late seventies here. You know how fads go through, so
it's trading various things. Marbles was the big currency at
(04:35):
the time.
Speaker 1 (04:36):
Marbles comes and goes in cycles, didn't.
Speaker 3 (04:38):
Yeah, And morning break and lunchtime was you were straight
to the courtyard to play marbles games with all your mates,
and I remember that sort of It taught you a
lot of the basics. So if you set up a game,
you had to be the most attractive game, so marketing help.
Speaker 2 (04:52):
You had to rig the odds as much as you
could so you did well.
Speaker 3 (04:55):
I even remember building a basic wood sort of pinball machine.
You know, probably five years later, found bags and bags
of marbles at home and thought what was that about.
Speaker 1 (05:04):
So you're quite good at the trading and the you know,
you deal for what were they called? Again? There was
the sort of silvery one.
Speaker 2 (05:11):
Yes, there was here.
Speaker 3 (05:12):
There was the sort of ball bearing type ones, and
there was the big ones and small ones. And it's
funny you reflect on it. It taught you marketing, customers, trade,
you know, sort of how to grow. What it didn't
teach you was marbles would have no value beyond time.
Speaker 1 (05:26):
Yeah, but did you grow up in a family where
money was discussed and where you you know, it was
sort of business and things was a part of life.
Speaker 3 (05:35):
Looks it's interesting my parents, you know, I lost relatively young,
so they were fifty and sixty. I was twenty one
when my father passed. But they were you know, white collar,
normal New Zealand. So my dad was a health inspector.
We lived in Auckland, Hawks Bay, then Lower Hut. He
moved from being sort of frontline to teaching them by
(05:57):
correspondence my mum. After you know, there were three of us,
I'm the oldest. After you know, school started for all
of us. Kids started a job at insurance company offers so,
you know, money. They were very community minded people. They
had a great set of friends. I don't remember money
being a pressure, but I never remember feeling like we
were in any way wealthy.
Speaker 1 (06:18):
You know.
Speaker 3 (06:18):
I remember Dad sort of thought he'd really made it
when he got an eight year old commodore.
Speaker 2 (06:23):
You know, that was sort of that was the big time.
Speaker 1 (06:25):
And in those days, get new cars were sort of
out of the question.
Speaker 3 (06:28):
And those yeah, that was not imaginable. But they taught
good values. They were never you know, I got the
sense they were careful but not under pressure day to day.
Speaker 1 (06:39):
Yeah. Do you remember much about the supermarkets or going
down to four square or something in those days? I
just before we were on here, we were talking about
that nineteen ninety four receipt that they found and how
food prices have changed since then. But when you think
back to the differences with the say the late seventies,
walking around those they sort of little super values and
(07:01):
all squares and things. You know, what do you see
as the big big differences and what do you recall
from from that era?
Speaker 3 (07:08):
Look, I remember, you know, if you said where was
home and when you grow up, I'd say Lower Huart
because we moved there sort of late primary school. So
that's sort of my best memories. So I remember a
new New World opening in Lower Hut opposite where Queen's
Gate is now, and that was the big deal. The
Pack and Save opening and Patoni. You know, these things
were big moments in terms of in your community. You
(07:29):
sort of notice them and people talked about it. I
don't think I was entrusted with the household shopping at
any point. So, but my first after school job that
paid any money was in a paint and wallpaper retail
shop called each See where he and sons and Queen's
Drive and Lower Hut. The college I went to had
Wednesday afternoons off and Saturday mornings on classes. Because the
(07:50):
borders there was no retail on the weekend, right, so
wednes was when you got a haircut or bought a
new shirt or whatever you needed to do. So I
do remember working in that shop, paying two dollars fifty
an hour, and you know, labeling paint cans, occasionally been
trusted to advise a customer on something, doing deliveries, and
(08:10):
then went on my uncle and aunt in a funny
twist of fate, thirty years later owned the New World
and walk Worth. Oh well, my university holidays four years
in a row.
Speaker 2 (08:20):
I worked there.
Speaker 1 (08:20):
Yeah, when you first started getting just a little bit
of money, like from the paint shop, job and things
were the things that you were passionate about that you
were saving up for. Were you savor or you spend
it all?
Speaker 2 (08:30):
I was I was closer to spender than savor.
Speaker 3 (08:32):
Yeah, yeah, you know, and classic key we teenage boy,
it was about cars and for me, you know, my
mates we were tramping in camp. You know, we lived
close to the towers, so I've had a full part
of New Zealand. We were doing that pretty regularly. So
you bought, you know, a new pair of boots or
a new pack or you know, and then cars when
the time came. My first car I think cost five
(08:53):
hundred dollars, so let's you know.
Speaker 1 (08:54):
Keeping them perspective during what it was.
Speaker 2 (08:57):
It was a reno ten, which is sort of embarrassed.
Speaker 1 (09:01):
Yea, often a disaster, isn't it?
Speaker 2 (09:03):
Pretty much? Yeah, I learned a lot about fixing them.
Speaker 1 (09:05):
Yeah. Yeah that At school, were you academic and do
you think you sort of at that time had an
idea that business might be for you? Yeah?
Speaker 3 (09:14):
If I look back, you know, I was sort of
focused on more business topics, so maths, accounting, economics dropped
the sciences towards the end, you know, probably physics through
the sixth form. I remember what do they call that
now year twelve, which is I reflect because both my
kids went technology and science. Ones are ecatronics engineer ones
are clinical embriologists. So they thought business was a bad idea.
(09:39):
But you know, I think, you know, focused on business
and university. I did accounting in law, but went into
an accounting role as my first full time job.
Speaker 1 (09:50):
And you think, you know, some of those jobs, part
time jobs that you had, did that sort of help
make you think about Look.
Speaker 3 (09:55):
I think what they taught me, particularly working from uncle
and aunt, was how to work hard, right, you know,
and the value of hard work and the hard work
supported success of their business. And also you know, this
was in Walkworth at the time. That was a small
sleepy you know, well outside of Auckland Town. It would
get very busy in summer because there was the beaches.
But it taught you about community, It taught you about
(10:19):
people and stuff. I learned about standards.
Speaker 2 (10:21):
You know.
Speaker 3 (10:21):
My uncle was very store had to be clean front
and back. You know, you looked after things, and even
in a very very small way, you know, retol crime
was a thing then, and you know I saw him
deal with those incidents. So he learned a lot about
hard work and a lot about community.
Speaker 1 (10:37):
Yeah, and look, losing your parents so young, it's a
pretty big shock, especially at twenty one. Yeah, did that
sort of change your outlook on life generally?
Speaker 2 (10:46):
Yeah?
Speaker 3 (10:46):
I think it built some independence pretty quick. You know,
you sort of go, hey, you kind of have to
go and make this for yourself, younger siblings to.
Speaker 2 (10:55):
Keep an eye on.
Speaker 3 (10:56):
Yeah, and you know, so I think in a sad way,
you know, you sort of pull yourself up and so
you've got to get on with it. Yeah.
Speaker 1 (11:04):
Yeah. So coming out of university, did you go, you know,
straight into a job or did you travel or anything.
Speaker 3 (11:09):
I was in my fifth year of study. I wasn't
wasn't bad. I was trying to do two to.
Speaker 2 (11:15):
Right. I went part time because.
Speaker 3 (11:19):
I just got to a point where you go, actually,
I'd rather have a job and start creating a career.
And there was good opportunity at the time to do
that sort of dual learning, where you were in a
job but also going to university, you know.
Speaker 2 (11:30):
Two or three hours a week, so that that worked
really well.
Speaker 3 (11:33):
And the first company I worked for was ICI Paint,
so it was in their paint manufacturing plant and Gracefield
and low Hut.
Speaker 2 (11:40):
And it was a great job because it taught you
the basics of.
Speaker 3 (11:43):
Business raw materials, manufacturing, cost processing, quality, wholesaling, retailing, end
to end view of business.
Speaker 1 (11:51):
Yeah, and you know you've got It's gone on to
be a very successful career. Was there a point at
which you feel like, you know, you made a bit
of a leap up gone into the workplace. When did
you feel like, well, oh, okay, actually now this is
getting pretty serious and start managing people and things like that.
Speaker 3 (12:08):
Yeah, look, I think that was mid to late twenties.
I look back in on you often. Sometimes you get
asked to speak to groups and say, you know, how
did your career come about? And I always find it,
you know, sort of how don't know that I've got
that much to teach people, But I do remember at
school in sixth form, I was shoulder tapped by one
of the senior teachers saying are you coming back next year?
(12:28):
And if you are, would you be up for being
head day boy at the school. You look back now
and go, that was a head hunt, right. There was
no offer and no money, but you know, you reflect
and go wonder how that came about, and then people,
you know, people say, what do you think makes up
your ability to have a career. One first thing is
what you've learned at university will not be what you do,
(12:51):
but it does teach you to think, It teaches you
to learn, and it teaches you to work hard.
Speaker 2 (12:57):
But then you know.
Speaker 3 (12:57):
Once I moved from a company called my I Tell,
a small tech company only seventy people that ended up
through the late eighties and all of the economic things
that were going on closing in New Zealand, and I
was part of the team that sold the distribution rights
for the product to Telecom. Telecom was five telecoms at
the time before it merged, and that worked out pretty well.
(13:18):
And I joined the sales and marketing group in Telecom
Wellington Limited. But at the time there were no competitors,
but I knew they were coming because we'd been selling
tech to enable them.
Speaker 2 (13:27):
So you started getting involved with people and sales.
Speaker 3 (13:31):
And I have a vivid memory of in the Mitail Times,
a European GM who was someone in the audience at
a team catch up was complaining that the salespeople earned
more money than he did, and he said, well, you're
welcome to try, but you go to a low base,
you take the risk on commission and if you failed
two quarters in a row, you lose the job. And
just reminded me reporting is one thing, creating the results
(13:54):
as another.
Speaker 1 (14:01):
You've actually held a lot of director's roles and chairman
roles as well. You know, how do you find that
role and also how did you make the leap into
getting involved with being on boards as well.
Speaker 3 (14:13):
The first board things was ice House, so Telecom was
a partner of ice House. One of the things we
regularly did was put a director on and someone I
still work without in the in the startup community, a
lot gy called Rod Snodgrass sort of was it.
Speaker 2 (14:27):
He came to me and said, I'm going to step down,
would you like to do it?
Speaker 3 (14:31):
I was fascinated by what startup meant and what innovation
and tech investing in New Zealand looked like. I don't
think I knew anything about being a director at the time,
and it's been great actually, And I would firmly recommend
senior leaders to hold a board position while you hold
an executive position because in a funny way, you get
to see yourself. So around the board you see what
(14:51):
a management team show up like and the good and
the bad of that.
Speaker 1 (14:54):
Sometimes sides of the fence look at myself.
Speaker 3 (14:56):
Of now board and going yeah, I can see why
I frustrate them some days. And also as an executive,
as a senior leader, you go, I think I understand
what a board need from me. I think the key
about boards is, you know, nose and hands out, enable
the leadership team to be accountable and support them to deliver,
(15:16):
but be their critical friend. And you learn a lot
about where boards should start and stop and where leadership
needs to step in. So it's been really developmental.
Speaker 1 (15:25):
Yeah, so what are the ones that people might know
that you're involved with at the moment.
Speaker 3 (15:29):
So I've been on the board of Loyalty in New Zealand,
although there is a change coming with that which we've
just announced. I'm on the board of New Zealand Initiative,
and I chair the board at the Giltrap Group. Just
being an incredibly big year with a very sad passing
of Sir Colin Yeah.
Speaker 2 (15:43):
A New Zealand business legend.
Speaker 3 (15:45):
Yeah, you know, and I know when people say you've
taken over from Colin, you go no, no, no, No
one can take over from Colin. You know, I'm just
loving supporting the two sons that own the business and
being part of that industry, which is a fantastic intersection
of passion and business for me.
Speaker 1 (16:03):
So you're quite passionate about cars, aren't you. And you're
talking about the racing earlier.
Speaker 3 (16:07):
The thing that keeps you permanently poor. Yeah, but it is,
you know, it's a passion and so it's a privilege
to be part of a really cool New Zealand business
like that.
Speaker 2 (16:16):
That is growing and grown and grind.
Speaker 1 (16:18):
Yeah. What do you drive now? Do you drive something
that you're.
Speaker 2 (16:21):
A Volkswagen to rig?
Speaker 3 (16:22):
You know, you know, something that can put mountain bikes
on the back of cantire trailer. It's sort of you know,
it's a yeah, perfect thing for me.
Speaker 1 (16:31):
Yeah, sure, sure, I've got a few quick fire questions.
We always ask what's the poorest you ever been? Oh?
Speaker 3 (16:38):
I think it was the day I moved into my
first house, which was on the western hills of Lower
hut was back when you could buy a house for
you know, I think it was one hundred and five
thousand dollars brand new house built by Fletcher Building on
a small piece of land on the western hills above
Lower Hut. I put the five thousand dollars on a
credit card because I didn't have it, and know you
(17:00):
looked at it and went, gosh, that mortgage is I
could never imagine paying it off.
Speaker 2 (17:05):
So good to get the start and lived.
Speaker 3 (17:07):
In it for a year with you know, the driveway,
no landscaping, because anything you had to do you had
to do yourself. You couldn't afford to pay someone. So
that was probably the moment where you went, well, this
is you know, going to have to take this on.
Speaker 1 (17:20):
Yeah. Yeah, when you were feeling that poor, you know,
did that affect your choices and the way you were
spending And I'm thinking about the supermarket shop probably.
Speaker 3 (17:27):
Yeah, it's almost embarrassing them that I can't recall what
supermarket shop felt like so much. Then obviously I was
doing it. I was living you know, in the in
the place on my own, just before I got married.
Later about you know, six nine months after I bought
the house.
Speaker 1 (17:41):
But of a blur, isn't it.
Speaker 3 (17:43):
It was sort of you know, probably at other things
on your mind as priorities. This was at a time
where interest rates were in the teens. Yeah, so you know, I.
Speaker 2 (17:50):
Certainly felt that probably most Yeah.
Speaker 1 (17:53):
That's right. How about flipping it around, what's the most
indulgent purchase you've ever made?
Speaker 3 (17:58):
Oh, look, it would be it's probably a car thing,
you know, a sports car for fun. You know, my
son did a reasonable amount of motorsport and that's a
that's a passion that you know, coll admiration for people
that go all the way on the investment in that.
It's you know, of all the sports, it's the most
hardest to solve economically.
Speaker 2 (18:15):
Yeah, so it would.
Speaker 1 (18:16):
Probably myself, like a business, just to survive.
Speaker 3 (18:19):
You need a lot of support, yeah, and just complete aside.
But New Zealand is punching so far above its weight
and isn't it? And particularly given the lack of economic
power we have. You know, you look at the big
players in the world. They're coming with the billions of
large countries. We should be really proud of us.
Speaker 1 (18:34):
Yeah, yeah, absolutely, And so do you can you work
on engines and fixed cars.
Speaker 3 (18:40):
Time is probably the biggest barrier, but I can. And
what I love about doing it now versus doing it
when you're young. You needed to fix it that night
because you drive it to that one that's not driven
every day. You can do it a little slower and
have a little more fun.
Speaker 1 (18:54):
Yeah. Sure. One we've been asking and so Christopher Luxan
on the campaign trail was asked about what he spent
on supermarket shopping. You probably saw the story and I
think he kind of misread the question a bit to
be honest that he said sixty dollars because he's down
in Wellington and basically topping up in coffee and things.
But what does your supermarket shop look like? Are you
a big supermarket shopper?
Speaker 3 (19:15):
Look, I go, I'm in stores very often, but not
you know, doing a household shop. You know that generally
is sort of mid twes to three hundred a week
from what I see, and that's you know, supermarkets is
part of what goes into the house. But very conscious
that the you know, it's very real to me what
happen has happened with food price inflation, what's happened with
(19:37):
supply costs to us, and what's happened with our pricing.
We've tried to be really transparent about that because we
feel that accountability to New Zealand households we get we
sit high on this spend list we've got to show
them we're doing all we can to suppress the impact
of what's going on.
Speaker 1 (19:51):
I mean, it was it was a shock in the
sense that New Zealand or the world, we hadn't really
had that kind of inflation for decades and then suddenly
it hits, and you know, I guess I sort of
underestimated how much people hate it. They you know, that
the pain of it, that there was a lot of
anger and all that sort of stuff. Did you guys
feel that, I mean, it's sort of I would say,
(20:13):
looking at the economics of it, the food side is
coming back down to sort of normal levels of inflation,
but there was a real spike there, especially fruit and
veggies for a while.
Speaker 2 (20:22):
Yeah, there was.
Speaker 3 (20:23):
And look, you know, so the good news right now
is we're down well below one percent for the last
three months. You know, our retail price increases sitting at
a round point four point five, supply costs increases to
us still sitting in the threes three percent or so,
and food price inflation somewhere around the same as our
retail prices. We've been lower in two and higher and one.
(20:43):
But you go back you know, thirteen fourteen months, we
were talking about twelves, you know, in terms of percent
increase month compared to month a year ago. When you
look back at it, you know, COVID threw us into
the limelight. There was only two things on the news.
There was COVID and so making place, and any small
thing we did, good or bad, got coverage. And you
(21:04):
just got to You've got to accept in return for
the privilege to operate in every community, comes comes the
scrutiny and the transparency, and it's okay, we need to
stand up to it. But if I look at it now,
you know, I think in hindsight we're going Actually, the
weather events did have an impact on products.
Speaker 1 (21:19):
You can see it now with the fre not a
surprise coming down so much right.
Speaker 3 (21:22):
And globally there's been so many things go on. You know,
Coco's up three hundred percent, Olive oils up three hundred percent, and.
Speaker 1 (21:28):
You go to the olio.
Speaker 2 (21:30):
How do we suppress that in New Zealand.
Speaker 3 (21:32):
You know, in the end, you go, you buy as
well as you possibly can, respect your supplies, make sure
that it's fair. But you've got to do the job
because our customers are expecting us to buy.
Speaker 2 (21:41):
Well.
Speaker 1 (21:41):
Yeah, I guess the supplies are now just dealing with
the last stuff seems to be things like power prices
and rates and all that sort of stuff that they
have to deal with, right.
Speaker 3 (21:50):
I think there is room and it's been interesting watching
the process in Australia. There is room to make sure
that particularly our global supplies are treating New Zealand fairly. Yeah,
you know, we've had a lot of scrutiny. You know,
our numbers are prett in trails have been well well
sort of laid out.
Speaker 1 (22:05):
So is that one of the reasons that you would
argue for scale.
Speaker 2 (22:09):
I think scale for buying matters, you know.
Speaker 3 (22:11):
And if you think about the market in New Zealand,
our direct competitor is Australasian, so they bring Australasian scale.
The other players that are part of the New Zealand
competitive landscape now so Costco, massive global and very respected retail.
Speaker 2 (22:24):
They do a very good job.
Speaker 3 (22:26):
And other entrants to New Zealand will probably come with
global scale. Even new players like the Warehouse Group are national.
So when we sit here and go what do we
need to do to do better pricing for our customers,
that's where the merger comes from.
Speaker 1 (22:40):
And at the HERA, we've been writing stories about Aldi
coming in for about twenty years. Yes, do you think
that'll ever happen.
Speaker 3 (22:46):
It can happen tomorrow if they want to. Yeah, there
there is no barrier to them coming. They will just
I assume assess the opportunity to deploy the capital, because
this is a large capital, lower margin game compared to
many business models. When you get it running well and
when you're very efficient, when you have enough scale, you
can get four cents in the dollar return, and that's
(23:06):
that can be a fair return and enables you to invest.
You know, every time we open a new store, that
is tens of millions of dollars of investment.
Speaker 1 (23:13):
Yeah, And I mean you'll know from the telco industry
that often it is difficult in the country the size
to get beyond say two big players and a third
challenger brand kind of thing. There's just issues with the
size of the population for some of these.
Speaker 3 (23:28):
You know, you keep thinking, we're a little bit over
five million, the same physical size as Japan. So the
case to invest is different here and needs different things.
The barriers that make a difference to the cost in
New Zealand would be you know, what's the Foreign Direct
Investment rules, what's Overseas Investment Act doing for people who
might want to come to New Zealand, what's land availability,
(23:49):
the RIMA and just basically being a simple country to
do business.
Speaker 1 (23:53):
And this government is talking about changing some things that
so maybe that.
Speaker 3 (23:58):
Very positive principles being gust We think that makes the
biggest difference to getting competition here is to make it
simpler for people to come and set up.
Speaker 1 (24:06):
Yeah, how do you feel about ideas like GST or
fruit and veggies? Would that make a difference you think?
Speaker 3 (24:11):
Look, I think we love the simplicity of New Zealand's
GST system. So you know, firstly, if the government made
any government made a change in that area, then it
would be transparently passed through, no debate about that. However,
the cost to deliver it the you know, you watch
the Australian model where you know, if a salad's handmade
in store versus bagged, there are GST differences and you
(24:33):
sort of go, that's a complexity that is hard for
customers to understand, hard for stores to understand to get
right all of the time. You know, does it genuinely
add the value as opposed to let's look at the
core cost drivers of getting fresh produce on shelf and
said we can make those better.
Speaker 1 (24:48):
Yeah, we were talking earlier about that. You know that
the receipt from nineteen ninety four that they had a
story on and the different changes and prices are the
categories of do you see the change in prices? You know,
not just the ups and downs, but are the trends
in food pricing that you know? It looked like with
that story that processed foods and frozen foods were a
(25:10):
lot cheaper now than they used to be in relative terms,
sometimes even nominally actually, and it looked sort of like
fresh stuff is more expensive. Do you dares to see
that trend?
Speaker 2 (25:20):
Yeah?
Speaker 3 (25:21):
Look I saw and I saw your article land that
now I know. It made us reflect on a few
things because we spotted the same things, which is clearly
the costs and fresh produce have risen as fast, if
not faster than inflation through that time. You then look
at what are the cost drivers, So what's land cost,
what is production costs and people cost? And then what
are global markets doing in terms of driving price for
(25:41):
global products? Whereas the technologies that can be employed in
making processed food has a slightly negative tone. Unfortunately, a
lot of the product now is amazing quality and taste
and amazing nutrition. And one of the great developments through
COVID was people were asked to shop once a week
and were asked to keep things in animals. People had
a little bit of a hey, I better keep more
(26:02):
food in the house just in case. So frozen food
in particular has gone through a massive boom and the
product quality and the other thing a sort of cool
thing that happened was unfortunately hospitality was lockdown, but people
learned to get restaurant or pub style food at home.
So the rise of the air fryer in the flavored
chicken pieces and all of that stuff has been quite
(26:23):
a change. So when we design a store now, we're
designing a lot more frozen retail, so a lot more
stand up fridges and a lot more product range and
trying to deliver to the value, nutrition and taste profiles
that are being got out on new products. So we
deliver nearly eight thousand new products a year into our stores.
Speaker 1 (26:42):
So there's a lot of competition to be on the shelf.
So we talk about I guess the intense sort of focus.
You get from a consumer point of view, but there's
a bit there from the supplier point of view too, Right.
They're all very competitive and they consider it quite hard
work to get on the shelves with you guys. Is
that fair?
Speaker 3 (26:57):
Look you hear that I speak to one hundred of
our supplies a month. We run a regular digital catch
up where we get about five hundred attending. Three times
a year. We bring them into our place, six hundred
people or so. We just ran a supply survey. We
do it every six months, and since we propose the merger,
we've tripled the net promoter score from our suppliers for us.
(27:17):
So we're sort of going, there's more to do, But
when communicating, we're answering any question. There is now a
code of conduct in the new grocery industry competition that
sets the rules for the playing field. So a lot
has changed in that space and a lot has come forward.
The other thing, you know, it's our stores don't get
bigger because a supplier comes up with five new products,
So every time they do, we have to decide what
(27:38):
comes out so it can go in that process. Also,
we range based on the data from our customers and
that's the thing we've worked hard on the last three years.
Speaker 1 (27:47):
And that must be you know, I know with the
media that we get that the analytics get pretty good, right,
so you must get really good data on what people
are buying.
Speaker 3 (27:54):
In the essention, there's a lot of talk about AI.
We've been involved in a process where we've pumped years
OFDUCT sales data into an AI lead machine and basically
it's telling us in every category what products must be
on shelf, what products are choices on shelf, and then
where the positioning and value needs to be to work
for customers.
Speaker 2 (28:13):
So that's there's a lot.
Speaker 3 (28:13):
Of science now in the ranging and when we do
a review of a category to come up with an outcome,
that's what we're using a customer driven data to do it.
Speaker 1 (28:27):
Back to some of these quick far questions when I
keep asking people, regardless of their wealth, is do they
still buy a lot of tickets or do they imagine
winning lotto?
Speaker 3 (28:36):
Don't buy tickets to imagine, So that's a exercise.
Speaker 1 (28:40):
Oh yeah, you get to imagine for free? Yeah yeah, yeah?
How much do you imagine winning?
Speaker 2 (28:45):
Not? Not that much?
Speaker 3 (28:46):
I loved I think was it the fifty million or
so went out to seven or eight people.
Speaker 2 (28:51):
Yeah, I think that's a great app So.
Speaker 1 (28:52):
Worry that people win, you know, that kind of money
Suddenly it actually up ends their life a bit, doesn't it.
Speaker 2 (28:58):
Yeah.
Speaker 3 (28:58):
You do hope that people got the support and advice
and the right people around them when that happens, and
I really hope they go on to do very well
as a result.
Speaker 1 (29:05):
Yeah, there's a lot of good part of business for supermarkets.
I mean, I know they often have a stand look like.
Speaker 3 (29:11):
A lot of things that's shifting more and more digital,
you know, and supermarkets it's constantly about is that space
getting through.
Speaker 2 (29:18):
What customers need.
Speaker 3 (29:20):
And certainly in the many small communities, you know, having
lotto is quite important to the community, so you keep
it for that. Probably in our largest cities less so,
so that'll keep evolving, you know. And Loto grew digitally
a lot during COVID because people aren't going to make
a trip just for that, so you know, we keep
talking to the team at Lotto about that.
Speaker 1 (29:40):
Yeah. When you think about money now and your career
and things, do you do you know, do you think
it's been a driver for you making money or is
it more of a by product of doing business and
what you've been trying to do.
Speaker 2 (29:53):
It is a byproduct.
Speaker 3 (29:54):
You don't if any leader is running their business for
you know, the scorecard that they have been, the money
they receive. That's a pretty sad place to be, to
be honest, I think it's an enabler. So it is
a privilege to be at a point we have choices
where you can do things for friends and family and
do things that our experiences and matter and not be
(30:16):
worried day to day. But also it also frees up
some time in your mind to think about, so what
are we doing in the communities that we have the
privilege to earn a return in and be part of
rather than take a return from. So our team and
how they're looked after ready matters. And that's everything from
the way we reward and pay and the way we
(30:37):
employ and the way we treat people and our engagement
all the way through to our Foodies foundation to look
after families when they get into trouble. Someone could get sick,
someone could have a relationship problem, got an amazing facility
there that they can get help within twenty four hours.
To the tune of five thousand dollars and We do
it hundreds of times a year to help our team
through to what we do for food into communities and
the social supermarket idea which thirty four thousand families encounting. Yeah,
(31:02):
love that it's an all around wrap and that thousands
of those families know no longer need the help.
Speaker 2 (31:07):
That's the key that it makes that difference.
Speaker 1 (31:09):
When you think about some of that, you know, poverty
that's out there and how tuugh it is out there,
I mean and generally through society. What's your view on
sort of what the big drivers of wealth versus poverty are.
What would you like to see change in the way
people think about I.
Speaker 3 (31:24):
Think there's three or four things that matter. You know,
health and education do matter. You know, you see where
if those systems aren't working best for people, then it
doesn't set the platform going forward. I know they're big
Gnali problems, but they take as long as they're going
to take to fix. And if you don't start and
don't start with an intent, they'll still be that far away.
I think family and relationships have a huge role, so
(31:47):
I think wealth has no effect on that. Actually, I
think a great family with good relationships see people do
better over time. So I think every family has a
bit of responsibility there, and I think for New Zealander
is just having.
Speaker 2 (31:59):
Some more spiration.
Speaker 3 (32:00):
Yeah, you know, I'm still involved in the startup world,
you know, and like to invest in little ways there
and like to be close to it because I love
the spirit of all of those leaders. We need more
of that. We need to celebrate their success, we need
to be proud of it, and we need to be
okay when they do very very well.
Speaker 1 (32:18):
Yeah, well, there's a question i'd actually well I don't
usually ask, but I'd love to ask you because I've
been thinking about it. You know, the Fitch Ratings people
who wrote something a week or two ago and they
were just warned that some of the drivers of New
Zealand's economy China and dairy and tourism weren't going to
be the growth drivers that they were even you know,
they will still be big. And then the question is
(32:38):
sort of what next, and so do you I mean,
from that startup side of things and the tech side
of things, can we generate enough momentum from that to
be a big driver of wealth for New Zealand? Is
I know they'll say there is already billion dollars or something,
But you know, can it actually be transformational?
Speaker 3 (32:55):
It can, And it's about attitude and about approach and
about all of society New Zealand being up for what
it means. So, you know, I had the opportunity to
go to Ireland last year. It's a bit of a
long story because my grandparents came from Island, sodthe an
Irish passport and joined a business visit their New Zealand initiative.
You know, five million people sound familiar an Ireland and
(33:18):
you know what they've done around foreign direct investment, around
encouraging company investment for the long term through tax system,
what they've done around making sure the money they receive
from that goes into education, it goes into infrastructure, it
goes into facilities. It's a model we can learn from.
We went to Switzerland two or three years before that,
very different high end, high value brands, but small countries
(33:42):
doing very well by focusing their innovation into you know
where they can take it global. We have such an
amazing agritech sector, we have an amazing entrepreneurial sector.
Speaker 2 (33:52):
We can we need to get resolved.
Speaker 1 (33:54):
So just the final question really, but if I was
to put you on the spot and say we could
make you Prime Minister for a day. You get to
focus what will be the one policy that you'd really
love to see implemented or change to help drive some
of that.
Speaker 2 (34:08):
Look two things.
Speaker 3 (34:10):
One, I think it's about welcome, making business an okay
thing to be successful in. And I think that you know,
we're hearing a lot of principles about that emerging, so
very interested to see progress yet on that front making
us an easy, simple place to do. We're never going
to have scale, We're never going to be big and
interesting from our customer based point of view, so we
need to be innovative, smart and agile.
Speaker 2 (34:30):
The other thing that.
Speaker 3 (34:31):
Is critical, and there is lots of good talk about it,
is education. Just lifting our game and education so that
we have talent that can do amazing things.
Speaker 1 (34:39):
Yeah, Chris Quinn, thank you very much. Thank you, Liam, cheers,
thanks for listening to this episode of Money Talks. If
you want to get in touch, drop me a line
at Liam dot Dan at nzme dot co dot nz
and you can read more from me at enzidherld dot
co dot nz. Thanks to my producer Ethan Sells and
(35:00):
sound engineer lia An McDonald follow Money Talks on iHeartRadio
or wherever you get your podcasts, with new episodes available
every Thursday.
Again.
Speaker 2 (00:06):
Hi.
Speaker 1 (00:07):
I'm Liam Dan, New Zealand Herald Business Editor at Large
and welcome to this episode of Money Talks. This is
a podcast about money, but we're not going to tell
you how to get rich, and we're not going to
try and pick the next interest rate move. In this series,
I'll be talking to interesting New Zealanders about how money
has shaped their lives and what they've learned over the years.
(00:30):
For today's podcast, I'm joined by Chris Quinn, CEO of
food Stuff's North Island. They run Pack and Save New
World and for Square Supermarkets. Chris is also the CEO
designate of the proposed merger of food Stuffs North Island
and South Island Cure. Chris, Welcome to Money.
Speaker 2 (00:45):
Talks, Thanks Liam, and thanks for having me. Yeah.
Speaker 1 (00:47):
Look great. Look we'll dive into the usual money talk stuff.
But I guess maybe because it is a bit of
the elephant in the room, what's up with the Commerce
Commission proposal at the moment you're sort of watch and
wait at the moment.
Speaker 3 (01:00):
So we've been in a clearance application process for the
Comments Commission since middle December. There is three possible stages
in those applications, so they've chosen just last week to
go to a third stage, which is a statement of
unresolved issues. So they feel that there are still a
narrow set of issues that need to be spent more
time on. So they've just advised us last week that
(01:22):
they need about three months to do that. So that
will take us through to the first of October, where
will get the next update on their decision around clearance.
We've had our shareholders vote nine percent in favor of
doing this. We've done our other work, so we're very
keen to get on with the benefits of this for
our customers, but we need to respect the process and
work through it.
Speaker 2 (01:43):
Yeah.
Speaker 1 (01:43):
Sure, I mean there's obviously a lot of scrutiny about
supermarkets and the feeling that is there enough competition and
because we've just been through this inflationary period, prices have
been really in the spotlight. How much do you think
the average shop is going to notice this merrige? Is
it a back end? You know? To what extent is
it actually going to have a meaningful impact on one
(02:05):
way or the other? Do you think?
Speaker 2 (02:07):
Yeah?
Speaker 3 (02:07):
Look, firstly, we get the scrutiny and the prominence I
guess of the sector. There's not many organizations that are
a New Zealand household deals with two and a half
times a week. And we know in a cost of
living time where things are tough for a lot of households,
you know, our percentage of what makes up weekly household
cost is decent. It depends on where the house is
at in terms of mortgage or rental or ultricity, in
(02:29):
various things. But we're right amongst the top household bills.
So we understand and we respect it, and we need
to be accountable back to New Zealanders for what's happening
in terms of food price, in terms of this merger,
you know, we number one thing for New Zealanders right
now by far, and choosing where to shop is price.
You know, they look around for the deals. It's a
very competitive.
Speaker 2 (02:48):
Market from the point of view.
Speaker 3 (02:49):
If you can shop in another store tomorrow, there is
nothing binding you to one of our stores. There's also,
in our view, nothing in the way of anyone entering
this market if they see an opportunity. And you know,
in a time where we're talking about infrastructure quite a lot,
you know the capital required.
Speaker 2 (03:06):
I don't think many New.
Speaker 3 (03:07):
Zealanders probably understand the size of these businesses, you know,
a medium to large supermarket employees hundreds of people, deploys
tens of millions of dollars of capital, and in the end,
we return about four cents in the retail dollar in
terms of profit back into the business. So we understand
the scrutiny. That's why we've been quite transparent about price
versus price increases and cost increases. And while we're proposing
(03:32):
this merger because it's the biggest thing we can see
to cut our back end costs, but make no difference
to the number of stores in New Zealand, who owns
those stores, the level of retail competition. We will still
have the same family in the same community own the
same store after the merger. We'll just cost lest as
a business to run that must make a difference over
time to the price of products.
Speaker 1 (03:53):
Sure, yeah, okay, Look, we can come back to a
bit of you know, chat about groceries and things. But
I want to jump right back now and ask you
if you've got a very early memory of money, what's
the first memory you have of sort of holding money
in your hand and that sort of thing.
Speaker 3 (04:07):
Look, it's interesting, I don't know that I can remember
the first time I held money. I remember post office
savings bank.
Speaker 2 (04:12):
Pass box at school.
Speaker 3 (04:14):
I remember the handwritten numbers, which you look back now
and think it was never wrong. So you know, maybe
technology hasn't helped us that much. And I do remember
it wasn't money, but it was sort of trading in business.
So when I was at intermediate school, we're talking seventies,
late seventies here. You know how fads go through, so
it's trading various things. Marbles was the big currency at
(04:35):
the time.
Speaker 1 (04:36):
Marbles comes and goes in cycles, didn't.
Speaker 3 (04:38):
Yeah, And morning break and lunchtime was you were straight
to the courtyard to play marbles games with all your mates,
and I remember that sort of It taught you a
lot of the basics. So if you set up a game,
you had to be the most attractive game, so marketing help.
Speaker 2 (04:52):
You had to rig the odds as much as you
could so you did well.
Speaker 3 (04:55):
I even remember building a basic wood sort of pinball machine.
You know, probably five years later, found bags and bags
of marbles at home and thought what was that about.
Speaker 1 (05:04):
So you're quite good at the trading and the you know,
you deal for what were they called? Again? There was
the sort of silvery one.
Speaker 2 (05:11):
Yes, there was here.
Speaker 3 (05:12):
There was the sort of ball bearing type ones, and
there was the big ones and small ones. And it's
funny you reflect on it. It taught you marketing, customers, trade,
you know, sort of how to grow. What it didn't
teach you was marbles would have no value beyond time.
Speaker 1 (05:26):
Yeah, but did you grow up in a family where
money was discussed and where you you know, it was
sort of business and things was a part of life.
Speaker 3 (05:35):
Looks it's interesting my parents, you know, I lost relatively young,
so they were fifty and sixty. I was twenty one
when my father passed. But they were you know, white collar,
normal New Zealand. So my dad was a health inspector.
We lived in Auckland, Hawks Bay, then Lower Hut. He
moved from being sort of frontline to teaching them by
(05:57):
correspondence my mum. After you know, there were three of us,
I'm the oldest. After you know, school started for all
of us. Kids started a job at insurance company offers so,
you know, money. They were very community minded people. They
had a great set of friends. I don't remember money
being a pressure, but I never remember feeling like we
were in any way wealthy.
Speaker 1 (06:18):
You know.
Speaker 3 (06:18):
I remember Dad sort of thought he'd really made it
when he got an eight year old commodore.
Speaker 2 (06:23):
You know, that was sort of that was the big time.
Speaker 1 (06:25):
And in those days, get new cars were sort of
out of the question.
Speaker 3 (06:28):
And those yeah, that was not imaginable. But they taught
good values. They were never you know, I got the
sense they were careful but not under pressure day to day.
Speaker 1 (06:39):
Yeah. Do you remember much about the supermarkets or going
down to four square or something in those days? I
just before we were on here, we were talking about
that nineteen ninety four receipt that they found and how
food prices have changed since then. But when you think
back to the differences with the say the late seventies,
walking around those they sort of little super values and
(07:01):
all squares and things. You know, what do you see
as the big big differences and what do you recall
from from that era?
Speaker 3 (07:08):
Look, I remember, you know, if you said where was
home and when you grow up, I'd say Lower Huart
because we moved there sort of late primary school. So
that's sort of my best memories. So I remember a
new New World opening in Lower Hut opposite where Queen's
Gate is now, and that was the big deal. The
Pack and Save opening and Patoni. You know, these things
were big moments in terms of in your community. You
(07:29):
sort of notice them and people talked about it. I
don't think I was entrusted with the household shopping at
any point. So, but my first after school job that
paid any money was in a paint and wallpaper retail
shop called each See where he and sons and Queen's
Drive and Lower Hut. The college I went to had
Wednesday afternoons off and Saturday mornings on classes. Because the
(07:50):
borders there was no retail on the weekend, right, so
wednes was when you got a haircut or bought a
new shirt or whatever you needed to do. So I
do remember working in that shop, paying two dollars fifty
an hour, and you know, labeling paint cans, occasionally been
trusted to advise a customer on something, doing deliveries, and
(08:10):
then went on my uncle and aunt in a funny
twist of fate, thirty years later owned the New World
and walk Worth. Oh well, my university holidays four years
in a row.
Speaker 2 (08:20):
I worked there.
Speaker 1 (08:20):
Yeah, when you first started getting just a little bit
of money, like from the paint shop, job and things
were the things that you were passionate about that you
were saving up for. Were you savor or you spend
it all?
Speaker 2 (08:30):
I was I was closer to spender than savor.
Speaker 3 (08:32):
Yeah, yeah, you know, and classic key we teenage boy,
it was about cars and for me, you know, my
mates we were tramping in camp. You know, we lived
close to the towers, so I've had a full part
of New Zealand. We were doing that pretty regularly. So
you bought, you know, a new pair of boots or
a new pack or you know, and then cars when
the time came. My first car I think cost five
(08:53):
hundred dollars, so let's you know.
Speaker 1 (08:54):
Keeping them perspective during what it was.
Speaker 2 (08:57):
It was a reno ten, which is sort of embarrassed.
Speaker 1 (09:01):
Yea, often a disaster, isn't it?
Speaker 2 (09:03):
Pretty much? Yeah, I learned a lot about fixing them.
Speaker 1 (09:05):
Yeah. Yeah that At school, were you academic and do
you think you sort of at that time had an
idea that business might be for you? Yeah?
Speaker 3 (09:14):
If I look back, you know, I was sort of
focused on more business topics, so maths, accounting, economics dropped
the sciences towards the end, you know, probably physics through
the sixth form. I remember what do they call that
now year twelve, which is I reflect because both my
kids went technology and science. Ones are ecatronics engineer ones
are clinical embriologists. So they thought business was a bad idea.
(09:39):
But you know, I think, you know, focused on business
and university. I did accounting in law, but went into
an accounting role as my first full time job.
Speaker 1 (09:50):
And you think, you know, some of those jobs, part
time jobs that you had, did that sort of help
make you think about Look.
Speaker 3 (09:55):
I think what they taught me, particularly working from uncle
and aunt, was how to work hard, right, you know,
and the value of hard work and the hard work
supported success of their business. And also you know, this
was in Walkworth at the time. That was a small
sleepy you know, well outside of Auckland Town. It would
get very busy in summer because there was the beaches.
But it taught you about community, It taught you about
(10:19):
people and stuff. I learned about standards.
Speaker 2 (10:21):
You know.
Speaker 3 (10:21):
My uncle was very store had to be clean front
and back. You know, you looked after things, and even
in a very very small way, you know, retol crime
was a thing then, and you know I saw him
deal with those incidents. So he learned a lot about
hard work and a lot about community.
Speaker 1 (10:37):
Yeah, and look, losing your parents so young, it's a
pretty big shock, especially at twenty one. Yeah, did that
sort of change your outlook on life generally?
Speaker 2 (10:46):
Yeah?
Speaker 3 (10:46):
I think it built some independence pretty quick. You know,
you sort of go, hey, you kind of have to
go and make this for yourself, younger siblings to.
Speaker 2 (10:55):
Keep an eye on.
Speaker 3 (10:56):
Yeah, and you know, so I think in a sad way,
you know, you sort of pull yourself up and so
you've got to get on with it. Yeah.
Speaker 1 (11:04):
Yeah. So coming out of university, did you go, you know,
straight into a job or did you travel or anything.
Speaker 3 (11:09):
I was in my fifth year of study. I wasn't
wasn't bad. I was trying to do two to.
Speaker 2 (11:15):
Right. I went part time because.
Speaker 3 (11:19):
I just got to a point where you go, actually,
I'd rather have a job and start creating a career.
And there was good opportunity at the time to do
that sort of dual learning, where you were in a
job but also going to university, you know.
Speaker 2 (11:30):
Two or three hours a week, so that that worked
really well.
Speaker 3 (11:33):
And the first company I worked for was ICI Paint,
so it was in their paint manufacturing plant and Gracefield
and low Hut.
Speaker 2 (11:40):
And it was a great job because it taught you
the basics of.
Speaker 3 (11:43):
Business raw materials, manufacturing, cost processing, quality, wholesaling, retailing, end
to end view of business.
Speaker 1 (11:51):
Yeah, and you know you've got It's gone on to
be a very successful career. Was there a point at
which you feel like, you know, you made a bit
of a leap up gone into the workplace. When did
you feel like, well, oh, okay, actually now this is
getting pretty serious and start managing people and things like that.
Speaker 3 (12:08):
Yeah, look, I think that was mid to late twenties.
I look back in on you often. Sometimes you get
asked to speak to groups and say, you know, how
did your career come about? And I always find it,
you know, sort of how don't know that I've got
that much to teach people, But I do remember at
school in sixth form, I was shoulder tapped by one
of the senior teachers saying are you coming back next year?
(12:28):
And if you are, would you be up for being
head day boy at the school. You look back now
and go, that was a head hunt, right. There was
no offer and no money, but you know, you reflect
and go wonder how that came about, and then people,
you know, people say, what do you think makes up
your ability to have a career. One first thing is
what you've learned at university will not be what you do,
(12:51):
but it does teach you to think, It teaches you
to learn, and it teaches you to work hard.
Speaker 2 (12:57):
But then you know.
Speaker 3 (12:57):
Once I moved from a company called my I Tell,
a small tech company only seventy people that ended up
through the late eighties and all of the economic things
that were going on closing in New Zealand, and I
was part of the team that sold the distribution rights
for the product to Telecom. Telecom was five telecoms at
the time before it merged, and that worked out pretty well.
(13:18):
And I joined the sales and marketing group in Telecom
Wellington Limited. But at the time there were no competitors,
but I knew they were coming because we'd been selling
tech to enable them.
Speaker 2 (13:27):
So you started getting involved with people and sales.
Speaker 3 (13:31):
And I have a vivid memory of in the Mitail Times,
a European GM who was someone in the audience at
a team catch up was complaining that the salespeople earned
more money than he did, and he said, well, you're
welcome to try, but you go to a low base,
you take the risk on commission and if you failed
two quarters in a row, you lose the job. And
just reminded me reporting is one thing, creating the results
(13:54):
as another.
Speaker 1 (14:01):
You've actually held a lot of director's roles and chairman
roles as well. You know, how do you find that
role and also how did you make the leap into
getting involved with being on boards as well.
Speaker 3 (14:13):
The first board things was ice House, so Telecom was
a partner of ice House. One of the things we
regularly did was put a director on and someone I
still work without in the in the startup community, a
lot gy called Rod Snodgrass sort of was it.
Speaker 2 (14:27):
He came to me and said, I'm going to step down,
would you like to do it?
Speaker 3 (14:31):
I was fascinated by what startup meant and what innovation
and tech investing in New Zealand looked like. I don't
think I knew anything about being a director at the time,
and it's been great actually, And I would firmly recommend
senior leaders to hold a board position while you hold
an executive position because in a funny way, you get
to see yourself. So around the board you see what
(14:51):
a management team show up like and the good and
the bad of that.
Speaker 1 (14:54):
Sometimes sides of the fence look at myself.
Speaker 3 (14:56):
Of now board and going yeah, I can see why
I frustrate them some days. And also as an executive,
as a senior leader, you go, I think I understand
what a board need from me. I think the key
about boards is, you know, nose and hands out, enable
the leadership team to be accountable and support them to deliver,
(15:16):
but be their critical friend. And you learn a lot
about where boards should start and stop and where leadership
needs to step in. So it's been really developmental.
Speaker 1 (15:25):
Yeah, so what are the ones that people might know
that you're involved with at the moment.
Speaker 3 (15:29):
So I've been on the board of Loyalty in New Zealand,
although there is a change coming with that which we've
just announced. I'm on the board of New Zealand Initiative,
and I chair the board at the Giltrap Group. Just
being an incredibly big year with a very sad passing
of Sir Colin Yeah.
Speaker 2 (15:43):
A New Zealand business legend.
Speaker 3 (15:45):
Yeah, you know, and I know when people say you've
taken over from Colin, you go no, no, no, No
one can take over from Colin. You know, I'm just
loving supporting the two sons that own the business and
being part of that industry, which is a fantastic intersection
of passion and business for me.
Speaker 1 (16:03):
So you're quite passionate about cars, aren't you. And you're
talking about the racing earlier.
Speaker 3 (16:07):
The thing that keeps you permanently poor. Yeah, but it is,
you know, it's a passion and so it's a privilege
to be part of a really cool New Zealand business
like that.
Speaker 2 (16:16):
That is growing and grown and grind.
Speaker 1 (16:18):
Yeah. What do you drive now? Do you drive something
that you're.
Speaker 2 (16:21):
A Volkswagen to rig?
Speaker 3 (16:22):
You know, you know, something that can put mountain bikes
on the back of cantire trailer. It's sort of you know,
it's a yeah, perfect thing for me.
Speaker 1 (16:31):
Yeah, sure, sure, I've got a few quick fire questions.
We always ask what's the poorest you ever been? Oh?
Speaker 3 (16:38):
I think it was the day I moved into my
first house, which was on the western hills of Lower
hut was back when you could buy a house for
you know, I think it was one hundred and five
thousand dollars brand new house built by Fletcher Building on
a small piece of land on the western hills above
Lower Hut. I put the five thousand dollars on a
credit card because I didn't have it, and know you
(17:00):
looked at it and went, gosh, that mortgage is I
could never imagine paying it off.
Speaker 2 (17:05):
So good to get the start and lived.
Speaker 3 (17:07):
In it for a year with you know, the driveway,
no landscaping, because anything you had to do you had
to do yourself. You couldn't afford to pay someone. So
that was probably the moment where you went, well, this
is you know, going to have to take this on.
Speaker 1 (17:20):
Yeah. Yeah, when you were feeling that poor, you know,
did that affect your choices and the way you were
spending And I'm thinking about the supermarket shop probably.
Speaker 3 (17:27):
Yeah, it's almost embarrassing them that I can't recall what
supermarket shop felt like so much. Then obviously I was
doing it. I was living you know, in the in
the place on my own, just before I got married.
Later about you know, six nine months after I bought
the house.
Speaker 1 (17:41):
But of a blur, isn't it.
Speaker 3 (17:43):
It was sort of you know, probably at other things
on your mind as priorities. This was at a time
where interest rates were in the teens. Yeah, so you know, I.
Speaker 2 (17:50):
Certainly felt that probably most Yeah.
Speaker 1 (17:53):
That's right. How about flipping it around, what's the most
indulgent purchase you've ever made?
Speaker 3 (17:58):
Oh, look, it would be it's probably a car thing,
you know, a sports car for fun. You know, my
son did a reasonable amount of motorsport and that's a
that's a passion that you know, coll admiration for people
that go all the way on the investment in that.
It's you know, of all the sports, it's the most
hardest to solve economically.
Speaker 2 (18:15):
Yeah, so it would.
Speaker 1 (18:16):
Probably myself, like a business, just to survive.
Speaker 3 (18:19):
You need a lot of support, yeah, and just complete aside.
But New Zealand is punching so far above its weight
and isn't it? And particularly given the lack of economic
power we have. You know, you look at the big
players in the world. They're coming with the billions of
large countries. We should be really proud of us.
Speaker 1 (18:34):
Yeah, yeah, absolutely, And so do you can you work
on engines and fixed cars.
Speaker 3 (18:40):
Time is probably the biggest barrier, but I can. And
what I love about doing it now versus doing it
when you're young. You needed to fix it that night
because you drive it to that one that's not driven
every day. You can do it a little slower and
have a little more fun.
Speaker 1 (18:54):
Yeah. Sure. One we've been asking and so Christopher Luxan
on the campaign trail was asked about what he spent
on supermarket shopping. You probably saw the story and I
think he kind of misread the question a bit to
be honest that he said sixty dollars because he's down
in Wellington and basically topping up in coffee and things.
But what does your supermarket shop look like? Are you
a big supermarket shopper?
Speaker 3 (19:15):
Look, I go, I'm in stores very often, but not
you know, doing a household shop. You know that generally
is sort of mid twes to three hundred a week
from what I see, and that's you know, supermarkets is
part of what goes into the house. But very conscious
that the you know, it's very real to me what
happen has happened with food price inflation, what's happened with
(19:37):
supply costs to us, and what's happened with our pricing.
We've tried to be really transparent about that because we
feel that accountability to New Zealand households we get we
sit high on this spend list we've got to show
them we're doing all we can to suppress the impact
of what's going on.
Speaker 1 (19:51):
I mean, it was it was a shock in the
sense that New Zealand or the world, we hadn't really
had that kind of inflation for decades and then suddenly
it hits, and you know, I guess I sort of
underestimated how much people hate it. They you know, that
the pain of it, that there was a lot of
anger and all that sort of stuff. Did you guys
feel that, I mean, it's sort of I would say,
(20:13):
looking at the economics of it, the food side is
coming back down to sort of normal levels of inflation,
but there was a real spike there, especially fruit and
veggies for a while.
Speaker 2 (20:22):
Yeah, there was.
Speaker 3 (20:23):
And look, you know, so the good news right now
is we're down well below one percent for the last
three months. You know, our retail price increases sitting at
a round point four point five, supply costs increases to
us still sitting in the threes three percent or so,
and food price inflation somewhere around the same as our
retail prices. We've been lower in two and higher and one.
(20:43):
But you go back you know, thirteen fourteen months, we
were talking about twelves, you know, in terms of percent
increase month compared to month a year ago. When you
look back at it, you know, COVID threw us into
the limelight. There was only two things on the news.
There was COVID and so making place, and any small
thing we did, good or bad, got coverage. And you
(21:04):
just got to You've got to accept in return for
the privilege to operate in every community, comes comes the
scrutiny and the transparency, and it's okay, we need to
stand up to it. But if I look at it now,
you know, I think in hindsight we're going Actually, the
weather events did have an impact on products.
Speaker 1 (21:19):
You can see it now with the fre not a
surprise coming down so much right.
Speaker 3 (21:22):
And globally there's been so many things go on. You know,
Coco's up three hundred percent, Olive oils up three hundred percent, and.
Speaker 1 (21:28):
You go to the olio.
Speaker 2 (21:30):
How do we suppress that in New Zealand.
Speaker 3 (21:32):
You know, in the end, you go, you buy as
well as you possibly can, respect your supplies, make sure
that it's fair. But you've got to do the job
because our customers are expecting us to buy.
Speaker 2 (21:41):
Well.
Speaker 1 (21:41):
Yeah, I guess the supplies are now just dealing with
the last stuff seems to be things like power prices
and rates and all that sort of stuff that they
have to deal with, right.
Speaker 3 (21:50):
I think there is room and it's been interesting watching
the process in Australia. There is room to make sure
that particularly our global supplies are treating New Zealand fairly. Yeah,
you know, we've had a lot of scrutiny. You know,
our numbers are prett in trails have been well well
sort of laid out.
Speaker 1 (22:05):
So is that one of the reasons that you would
argue for scale.
Speaker 2 (22:09):
I think scale for buying matters, you know.
Speaker 3 (22:11):
And if you think about the market in New Zealand,
our direct competitor is Australasian, so they bring Australasian scale.
The other players that are part of the New Zealand
competitive landscape now so Costco, massive global and very respected retail.
Speaker 2 (22:24):
They do a very good job.
Speaker 3 (22:26):
And other entrants to New Zealand will probably come with
global scale. Even new players like the Warehouse Group are national.
So when we sit here and go what do we
need to do to do better pricing for our customers,
that's where the merger comes from.
Speaker 1 (22:40):
And at the HERA, we've been writing stories about Aldi
coming in for about twenty years. Yes, do you think
that'll ever happen.
Speaker 3 (22:46):
It can happen tomorrow if they want to. Yeah, there
there is no barrier to them coming. They will just
I assume assess the opportunity to deploy the capital, because
this is a large capital, lower margin game compared to
many business models. When you get it running well and
when you're very efficient, when you have enough scale, you
can get four cents in the dollar return, and that's
(23:06):
that can be a fair return and enables you to invest.
You know, every time we open a new store, that
is tens of millions of dollars of investment.
Speaker 1 (23:13):
Yeah, And I mean you'll know from the telco industry
that often it is difficult in the country the size
to get beyond say two big players and a third
challenger brand kind of thing. There's just issues with the
size of the population for some of these.
Speaker 3 (23:28):
You know, you keep thinking, we're a little bit over
five million, the same physical size as Japan. So the
case to invest is different here and needs different things.
The barriers that make a difference to the cost in
New Zealand would be you know, what's the Foreign Direct
Investment rules, what's Overseas Investment Act doing for people who
might want to come to New Zealand, what's land availability,
(23:49):
the RIMA and just basically being a simple country to
do business.
Speaker 1 (23:53):
And this government is talking about changing some things that
so maybe that.
Speaker 3 (23:58):
Very positive principles being gust We think that makes the
biggest difference to getting competition here is to make it
simpler for people to come and set up.
Speaker 1 (24:06):
Yeah, how do you feel about ideas like GST or
fruit and veggies? Would that make a difference you think?
Speaker 3 (24:11):
Look, I think we love the simplicity of New Zealand's
GST system. So you know, firstly, if the government made
any government made a change in that area, then it
would be transparently passed through, no debate about that. However,
the cost to deliver it the you know, you watch
the Australian model where you know, if a salad's handmade
in store versus bagged, there are GST differences and you
(24:33):
sort of go, that's a complexity that is hard for
customers to understand, hard for stores to understand to get
right all of the time. You know, does it genuinely
add the value as opposed to let's look at the
core cost drivers of getting fresh produce on shelf and
said we can make those better.
Speaker 1 (24:48):
Yeah, we were talking earlier about that. You know that
the receipt from nineteen ninety four that they had a
story on and the different changes and prices are the
categories of do you see the change in prices? You know,
not just the ups and downs, but are the trends
in food pricing that you know? It looked like with
that story that processed foods and frozen foods were a
(25:10):
lot cheaper now than they used to be in relative terms,
sometimes even nominally actually, and it looked sort of like
fresh stuff is more expensive. Do you dares to see
that trend?
Speaker 2 (25:20):
Yeah?
Speaker 3 (25:21):
Look I saw and I saw your article land that
now I know. It made us reflect on a few
things because we spotted the same things, which is clearly
the costs and fresh produce have risen as fast, if
not faster than inflation through that time. You then look
at what are the cost drivers, So what's land cost,
what is production costs and people cost? And then what
are global markets doing in terms of driving price for
(25:41):
global products? Whereas the technologies that can be employed in
making processed food has a slightly negative tone. Unfortunately, a
lot of the product now is amazing quality and taste
and amazing nutrition. And one of the great developments through
COVID was people were asked to shop once a week
and were asked to keep things in animals. People had
a little bit of a hey, I better keep more
(26:02):
food in the house just in case. So frozen food
in particular has gone through a massive boom and the
product quality and the other thing a sort of cool
thing that happened was unfortunately hospitality was lockdown, but people
learned to get restaurant or pub style food at home.
So the rise of the air fryer in the flavored
chicken pieces and all of that stuff has been quite
(26:23):
a change. So when we design a store now, we're
designing a lot more frozen retail, so a lot more
stand up fridges and a lot more product range and
trying to deliver to the value, nutrition and taste profiles
that are being got out on new products. So we
deliver nearly eight thousand new products a year into our stores.
Speaker 1 (26:42):
So there's a lot of competition to be on the shelf.
So we talk about I guess the intense sort of focus.
You get from a consumer point of view, but there's
a bit there from the supplier point of view too, Right.
They're all very competitive and they consider it quite hard
work to get on the shelves with you guys. Is
that fair?
Speaker 3 (26:57):
Look you hear that I speak to one hundred of
our supplies a month. We run a regular digital catch
up where we get about five hundred attending. Three times
a year. We bring them into our place, six hundred
people or so. We just ran a supply survey. We
do it every six months, and since we propose the merger,
we've tripled the net promoter score from our suppliers for us.
(27:17):
So we're sort of going, there's more to do, But
when communicating, we're answering any question. There is now a
code of conduct in the new grocery industry competition that
sets the rules for the playing field. So a lot
has changed in that space and a lot has come forward.
The other thing, you know, it's our stores don't get
bigger because a supplier comes up with five new products,
So every time they do, we have to decide what
(27:38):
comes out so it can go in that process. Also,
we range based on the data from our customers and
that's the thing we've worked hard on the last three years.
Speaker 1 (27:47):
And that must be you know, I know with the
media that we get that the analytics get pretty good, right,
so you must get really good data on what people
are buying.
Speaker 3 (27:54):
In the essention, there's a lot of talk about AI.
We've been involved in a process where we've pumped years
OFDUCT sales data into an AI lead machine and basically
it's telling us in every category what products must be
on shelf, what products are choices on shelf, and then
where the positioning and value needs to be to work
for customers.
Speaker 2 (28:13):
So that's there's a lot.
Speaker 3 (28:13):
Of science now in the ranging and when we do
a review of a category to come up with an outcome,
that's what we're using a customer driven data to do it.
Speaker 1 (28:27):
Back to some of these quick far questions when I
keep asking people, regardless of their wealth, is do they
still buy a lot of tickets or do they imagine
winning lotto?
Speaker 3 (28:36):
Don't buy tickets to imagine, So that's a exercise.
Speaker 1 (28:40):
Oh yeah, you get to imagine for free? Yeah yeah, yeah?
How much do you imagine winning?
Speaker 2 (28:45):
Not? Not that much?
Speaker 3 (28:46):
I loved I think was it the fifty million or
so went out to seven or eight people.
Speaker 2 (28:51):
Yeah, I think that's a great app So.
Speaker 1 (28:52):
Worry that people win, you know, that kind of money
Suddenly it actually up ends their life a bit, doesn't it.
Speaker 2 (28:58):
Yeah.
Speaker 3 (28:58):
You do hope that people got the support and advice
and the right people around them when that happens, and
I really hope they go on to do very well
as a result.
Speaker 1 (29:05):
Yeah, there's a lot of good part of business for supermarkets.
I mean, I know they often have a stand look like.
Speaker 3 (29:11):
A lot of things that's shifting more and more digital,
you know, and supermarkets it's constantly about is that space
getting through.
Speaker 2 (29:18):
What customers need.
Speaker 3 (29:20):
And certainly in the many small communities, you know, having
lotto is quite important to the community, so you keep
it for that. Probably in our largest cities less so,
so that'll keep evolving, you know. And Loto grew digitally
a lot during COVID because people aren't going to make
a trip just for that, so you know, we keep
talking to the team at Lotto about that.
Speaker 1 (29:40):
Yeah. When you think about money now and your career
and things, do you do you know, do you think
it's been a driver for you making money or is
it more of a by product of doing business and
what you've been trying to do.
Speaker 2 (29:53):
It is a byproduct.
Speaker 3 (29:54):
You don't if any leader is running their business for
you know, the scorecard that they have been, the money
they receive. That's a pretty sad place to be, to
be honest, I think it's an enabler. So it is
a privilege to be at a point we have choices
where you can do things for friends and family and
do things that our experiences and matter and not be
(30:16):
worried day to day. But also it also frees up
some time in your mind to think about, so what
are we doing in the communities that we have the
privilege to earn a return in and be part of
rather than take a return from. So our team and
how they're looked after ready matters. And that's everything from
the way we reward and pay and the way we
(30:37):
employ and the way we treat people and our engagement
all the way through to our Foodies foundation to look
after families when they get into trouble. Someone could get sick,
someone could have a relationship problem, got an amazing facility
there that they can get help within twenty four hours.
To the tune of five thousand dollars and We do
it hundreds of times a year to help our team
through to what we do for food into communities and
the social supermarket idea which thirty four thousand families encounting. Yeah,
(31:02):
love that it's an all around wrap and that thousands
of those families know no longer need the help.
Speaker 2 (31:07):
That's the key that it makes that difference.
Speaker 1 (31:09):
When you think about some of that, you know, poverty
that's out there and how tuugh it is out there,
I mean and generally through society. What's your view on
sort of what the big drivers of wealth versus poverty are.
What would you like to see change in the way
people think about I.
Speaker 3 (31:24):
Think there's three or four things that matter. You know,
health and education do matter. You know, you see where
if those systems aren't working best for people, then it
doesn't set the platform going forward. I know they're big
Gnali problems, but they take as long as they're going
to take to fix. And if you don't start and
don't start with an intent, they'll still be that far away.
I think family and relationships have a huge role, so
(31:47):
I think wealth has no effect on that. Actually, I
think a great family with good relationships see people do
better over time. So I think every family has a
bit of responsibility there, and I think for New Zealander
is just having.
Speaker 2 (31:59):
Some more spiration.
Speaker 3 (32:00):
Yeah, you know, I'm still involved in the startup world,
you know, and like to invest in little ways there
and like to be close to it because I love
the spirit of all of those leaders. We need more
of that. We need to celebrate their success, we need
to be proud of it, and we need to be
okay when they do very very well.
Speaker 1 (32:18):
Yeah, well, there's a question i'd actually well I don't
usually ask, but I'd love to ask you because I've
been thinking about it. You know, the Fitch Ratings people
who wrote something a week or two ago and they
were just warned that some of the drivers of New
Zealand's economy China and dairy and tourism weren't going to
be the growth drivers that they were even you know,
they will still be big. And then the question is
(32:38):
sort of what next, and so do you I mean,
from that startup side of things and the tech side
of things, can we generate enough momentum from that to
be a big driver of wealth for New Zealand? Is
I know they'll say there is already billion dollars or something,
But you know, can it actually be transformational?
Speaker 3 (32:55):
It can, And it's about attitude and about approach and
about all of society New Zealand being up for what
it means. So, you know, I had the opportunity to
go to Ireland last year. It's a bit of a
long story because my grandparents came from Island, sodthe an
Irish passport and joined a business visit their New Zealand initiative.
You know, five million people sound familiar an Ireland and
(33:18):
you know what they've done around foreign direct investment, around
encouraging company investment for the long term through tax system,
what they've done around making sure the money they receive
from that goes into education, it goes into infrastructure, it
goes into facilities. It's a model we can learn from.
We went to Switzerland two or three years before that,
very different high end, high value brands, but small countries
(33:42):
doing very well by focusing their innovation into you know
where they can take it global. We have such an
amazing agritech sector, we have an amazing entrepreneurial sector.
Speaker 2 (33:52):
We can we need to get resolved.
Speaker 1 (33:54):
So just the final question really, but if I was
to put you on the spot and say we could
make you Prime Minister for a day. You get to
focus what will be the one policy that you'd really
love to see implemented or change to help drive some
of that.
Speaker 2 (34:08):
Look two things.
Speaker 3 (34:10):
One, I think it's about welcome, making business an okay
thing to be successful in. And I think that you know,
we're hearing a lot of principles about that emerging, so
very interested to see progress yet on that front making
us an easy, simple place to do. We're never going
to have scale, We're never going to be big and
interesting from our customer based point of view, so we
need to be innovative, smart and agile.
Speaker 2 (34:30):
The other thing that.
Speaker 3 (34:31):
Is critical, and there is lots of good talk about it,
is education. Just lifting our game and education so that
we have talent that can do amazing things.
Speaker 1 (34:39):
Yeah, Chris Quinn, thank you very much. Thank you, Liam, cheers,
thanks for listening to this episode of Money Talks. If
you want to get in touch, drop me a line
at Liam dot Dan at nzme dot co dot nz
and you can read more from me at enzidherld dot
co dot nz. Thanks to my producer Ethan Sells and
(35:00):
sound engineer lia An McDonald follow Money Talks on iHeartRadio
or wherever you get your podcasts, with new episodes available
every Thursday.
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