22 Sep 2009

Supermarket giant counting down to brand merger

3:27 pm on 22 September 2009

New Zealand's second largest supermarket company says a rebranding exercise will create up to 3,000 permanent jobs and deliver lower prices to customers.

Seeking to take more market share from its main rival, Foodstuffs, which operates New World and Pak'n'Save, Progressive Enterprises is dropping its Foodtown and Woolworths brands in favour of a single chain of Countdown supermarkets.

The Australian-owned company, which has 150 supermarkets in new Zealand, is investing up to $1 billion to implement the change over five years, with new branding applied as existing stores are refurbished and new ones built.

Managing director Peter Smith says that up to five new Countdown supermarkets will be opened, and about 20 Woolworths, Foodtown and older Countdown stores will be converted to the new brand.

He says shoppers find multiple brands too confusing, and keeping the Countdown brand was an obvious choice, because of its popularity with customers and its spread across the country.

Mr Smith says the rebranding will provide thousands of job opportunities and lead to a better deal for customers. After the change, he says, prices are likely to drop at stores currently branded Foodtown.

Retail analyst Tim Morris says however that that remains to be seen.

He says Countdown's prices have recently risen, confusing its position in the market.

Union welcomes creation of new jobs

The union representing supermarket workers says that while there is nervousness about the rebranding the creation of up to 3,000 new jobs is good news.

National Distribution Union retail secretary Maxine Gay says that in the long term the the focus on just one brand could mean there are more resources to put into looking after staff.

She says some members are worried about possible closures or job cuts in places where two Progressive supermarkets of different brands are currently next door to each other, but the company has assured the union, she says, that it is not planning any cuts.