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The BulletinJuly 16, 2024

What’s going on at The Warehouse?

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And how it’s emblematic of the broader state of the economy. Stewart Sowman-Lund writes in today’s extract from The Bulletin. To receive The Bulletin in full each weekday, sign up here.

A serious restructure 

Before the weekend, Katie Bradford at 1News reported job cuts were on the way at The Warehouse’s head office. Just how many redundancies are on the cards isn’t known, but over a thousand people work in the head office. The news isn’t entirely surprising, given a wave of recent negative headlines about the iconic New Zealand chain and the broader retail market in general. Nevertheless, at least for me, it feels extra shocking when the brand in the firing line is one so intricately woven into the fabric of our country. Retail analyst Chris Wilkinson told The Post’s Rob Stock that The Warehouse needed to “win back the hearts and minds” of customers, and, repurposing a phrase we’ve heard from Christopher Luxon in recent months, “regain its mojo”.

What’s happened?

The financial signposts have been there for a while. RNZ’s Susan Edmunds, in a recent piece bluntly titled “what went wrong for The Warehouse”, listed off some of the fiscal challenges being faced by the big box retailer. Firstly, the brand sold off the sports store Torpedo7 for just $1. It also closed down its online operation TheMarket, a brand it had hoped could evolve into something like Amazon. It’s also been competing for a share of an increasingly fragmented market. Where once The Warehouse stood relatively alone, there are now Kmart stores popping up across the country. The Australian-owned retailer has made significant dents in The Warehouse’s business, becoming synonymous with cheap and often “viral” products that have earned it increased business. Here’s a recent article on The Edge about a “dupe” Dyson Airwrap being sold by Kmart. I can’t remember the last time a Warehouse product was being shared far and wide, and viral success has got to count for something. Ikea is also on the horizon, while cheap online retailers like Temu, which The Spinoff’s Shanti Mathias wrote about last year, have also come onto the scene.

The Warehouse’s biggest gamble was in tackling the grocery sector, a move that may be paying off, reported BusinessDesk’s Gregor Thompson. Last year, when it briefly lost the ability to sell Weet-bix, it criticised the lack of a “third entrant” into the grocery market. But it’s clearly not been enough to stave off job cuts and restructures. The discount grocery market is also challenging, with Costco planning an expansion around the country after opening in Auckland in 2022.

Where to from here?

These financial challenges haven’t just appeared out of thin air. Rebecca Stevenson at BusinessDesk wrote scathingly back in May about a recent visit to The Warehouse, describing “rows of unremarkable clothes” and a “sad assortment of fridges”. It could have been The Warehouse of 10 years ago, Stevenson wrote. Something needed to give, and it has. The Warehouse Group isn’t just The Warehouse, it’s also Noel Leeming and Warehouse Stationery. It’s these three “core” brands that the company intends to focus on in the future. “We need to be leaner,” said the group’s interim chief executive John Journee earlier in the year. “We’re taking quick and decisive action to improve our performance and better serve our customers.” Around the time, reported Simon Shepherd for Newshub, The Warehouse Group revealed annual earnings had fallen by about $61m.

It’s not just The Warehouse

The Herald’s Jamie Gray reported the slump for The Warehouse was emblematic of the wider state of the economy. Other well-known retailers are doing it tough, too, and have been for some time. Auckland department store Smith and Caughey’s announced it would be closing its doors after 144 years, while even major international brands like Sephora have been struggling in New Zealand – the cosmetics giant will be vacating its Queen Street store in a few weeks’ time. The difference is that those retailers are largely victims of a lack of inner-city foot traffic, a lingering after-effect of the Covid-19 lockdowns, while The Warehouse can be found in suburban shopping malls nationwide. Stats NZ figures paint a grim picture for the retail sector in general, as reported here by RNZ’s Jemima Huston. They show electronic card spending fell 0.6% in June, while the value of sales had dropped 4.9% on a year ago. In short, it’s a tough time to be a retailer wherever you are, though Retail NZ’s Carolyn Young told Huston that the government’s impending tax cuts along with any long-awaited changes to interest rates might help to minimise business losses.

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(Image: Getty Images)
(Image: Getty Images)

The BulletinJuly 15, 2024

Trump attack could help former president return to the White House

(Image: Getty Images)
(Image: Getty Images)

In this extract from today’s edition of The Bulletin by Stewart Sowman-Lund: the day the US presidential race changed forever. To receive The Bulletin in full each weekday, sign up here.

Yesterday started off as any normal Sunday, but will now forever be remembered as the day that an attempt was made to kill Donald Trump. This piece on The Guardian breaks down the key events of July 13 (US time) and includes footage of the dramatic moment Trump was pulled off stage by the secret service, appearing to mouth the words “fight, fight” while pumping his fist into the air, blood running down his right cheek. The photos of the alleged assassination effort were quickly shared around the world, upending the already contentious race for the White House. It’s the first attempted assassination on a US president in more than 40 years. At least one attendee of Trump’s rally was killed and two were left seriously injured, while the gunman, identified as 20-year-old Thomas Matthew Crooks, was killed by law enforcement.

Politicians unify in condemnation

The attack has seen lawmakers around the world unify in their condemnation of political violence. In the US, president Joe Biden, who has been under pressure from members of his own party to step aside from the presidential contest, spoke to Trump by phone. Earlier, Biden told reporters there was no place in America for violence like this. “It’s sick, it’s sick,” he said. “It’s one of the reasons why we have to unite this country.” Speaking today, Biden reiterated this call, saying “nothing is more important” than unity at this point. The shooting has seen efforts to replace Biden as the Democratic candidate for president put on pause, reported NBC, while the Biden campaign has stopped television ads attacking Trump.

Closer to home, New Zealand’s prime minister Christopher Luxon, who has just been in the United States, condemned the attack. “No country should encounter such political violence.” With Luxon on personal leave this week, the acting prime minister David Seymour said that “non-violence” was essential to democracy, sentiments echoed by others like foreign minister Winston Peters and Labour’s Chris Hipkins.

Trump supporters rally behind former president

While the immediate aftermath of the attack was centred around how the gunman was able to pull off his attack, and how serious the former president’s injuries were, discussion now turns to what it could mean for the US presidential election in November. Everything has changed, the Daily Telegraph’s Tony Diver wrote in this piece republished by the Herald. “The attempt on Trump’s life is a stark reminder of how a single, groundbreaking, moment can upend an already tempestuous campaign.” The Post’s Luke Malpass makes a similar argument this morning, noting that Trump will be emboldened by this attack and capable of engineering it to his political advantage.

It’s not just commentators making these claims. This report from Politico suggests that some Republicans view the attack as giving Trump a leg up for the presidency. “This will energise the base more than anything,” said one Republican congressman. Photos of the former president cover newspaper front pages around the globe. The image of Trump, fist raised in defiance, is an “indelible portrait of our era of political crisis and conflict”, writes Benjamin Wallace-Wells for the New Yorker. It’s in many ways akin to the president’s mug shot from last year. Both are shocking in distinct ways, and both may see fans of the former president rally behind him with greater intensity. This report from the Washington Post earlier in the year looks at how the image of Trump’s scowl as he was indicted became a powerful image for his supporters, even being printed on merchandise.

Attack symbolises a peak in political tension

The moment Donald Trump was shot feels like it will be one of those events that you forever remember where you were when you found out. But should any of us be surprised that the political temperature in the United States hit this dramatic boiling point? RNZ’s Tim Watkins argued no, writing that while it’s inarguably a shocking moment, “we reap what we sow and the bitter division and cynicism apparent in America’s public debate has been all too obvious for some time”. Even as politicians from across the spectrum unanimously condemn the attack on Trump, some have decided now is the moment to blame Biden, reports the New York Magazine. One Republican, Mike Collins of Georgia, outright accused the incumbent president of sending “the orders”. It illustrates the divided time we live in.

We’ve seen flickers of that polarisation here in New Zealand too, like in the fiery scenes outside parliament during the 2022 occupation or the horrific abuse and imported conspiracy theories targeted at some of our political leaders. But even in those moments, New Zealand avoided gun violence. The alleged shooter in the US reportedly used an AR-style semi-automatic rifle. They were outlawed here in the wake of the 2019 Christchurch terror attack, but some could return to gun ranges under the coalition government. The attempted assassination of a former president should be an opportunity to try and bridge any political rifts, but perhaps it threatens to tear them wide open as we head towards November 5. Trump’s initial response to the attempt on his life was posted on social media platform Truth Social, in calm and concerned language – whether he remains that way as he returns to the campaign trail, we’ll soon find out.

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