Kaufland stores in Victoria - Amazon S3...Kaufland stores in Victoria Addendum Report 3 Statement of...
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Kaufland stores in Victoria
Addendum Report
Statement of evidence of Anthony Dimasi
6 December 2018
Table of contents
Expert witness details 1
Addendum Report 3
Appendix 1: Curriculum Vitae 8
Kaufland stores in Victoria
Addendum Report 1 Statement of Evidence of Anthony Dimasi
Expert witness details
Name and address of expert
Mr Tony Dimasi
Economic Consultant
Dimasi & Co
12 Argent Court
Riddells Creek VIC 3431
Expert’s qualifications and experience
• Bachelor of Arts (Hons.), University of Melbourne
• Master of Arts, University of Melbourne
My CV is included as Appendix 1 to this statement of evidence. I have extensive
experience in the field of retail economics and analysis gained over the past 32 years,
having provided independent advice on numerous retail development projects and
proposals throughout all parts of Australia, to a broad range of clients.
Expert’s area of expertise
• I have practised as a consulting economic and retail analyst since 1982. During that
time I have worked in all states of Australia and also in New Zealand and Asia, and
have advised on many thousands of retail developments of all types and sizes.
• My assessments have covered demand and supply analysis, commercial feasibility
assessments and economic impact assessments, for many thousands of shopping
centres of all sizes and mixes, as well as numerous freestanding retail stores, including
supermarkets, discount department stores, toys category killer stores, book stores,
special apparel stores, smaller foodstores and packaged liquor stores of all sizes.
• I have appeared as an expert witness in the various jurisdictions across all states of
Australia and New Zealand on numerous occasions, including:
- The Administrative Appeals Tribunal (AAT) of Australia;
- The Land and Environment Court of New South Wales;
Expert witness details
Kaufland stores in Victoria
Addendum Report 2 Statement of Evidence of Anthony Dimasi
- Independent Ministerial Panels and VCAT in Victoria;
- The Planning and Environment Court of Queensland;
- The State Administrative Tribunal in Western Australia;
- The Environment, Resources and Development Court of South Australia;
- The Resource Development Planning Commission in Tasmania;
- The Liquor Licensing Court of South Australia; and
- The Petroleum Products Retail Outlets Board of South Australia.
I have also appeared as an expert witness before various government and ACCC
inquiries into the retailing of food, liquor and groceries industry in Australia,
including:
- the 1999 Joint Parliamentary Inquiry into the Australian Retail Sector (the Baird
Inquiry);
- the Inquiry into the Competitiveness of Retail Prices for Standard Groceries
(2008) undertaken by the Australian Consumer and Competition Commission
(ACCC); and
- the 2004 ACT Grocery Inquiry (the Martin Inquiry).
• Over the past 36 years I have provided, and continue to provide, research and
advisory services to a wide range of clients, including major retailers and most of
Australia’s shopping centre management and development groups.
• I have undertaken work on numerous occasions throughout Epping, Chirnside Park
and Dandenong, relating to both existing and proposed retail developments.
I have made all the inquiries that I believe are desirable and appropriate and no
matters of significance which I regard as relevant have to my knowledge been
withheld from the Panel.
Anthony Dimasi
6 December 2018
Kaufland stores in Victoria
Addendum Report 3 Statement of Evidence of Anthony Dimasi
Addendum Report
1.1 This Addendum Report presents further information relating to a number of points
which I am advised were raised in evidence by the Master Grocers Association
(MGA). Those points relate primarily to the claim by MGA that the likely impacts
on a number of businesses owned and operated by members of the MGA have
not been taken into account in the EIAs prepared by me for the proposed
Kaufland developments at Epping, Chirnside Park and Dandenong.
1.2 I deal with each of the three sites in question in greater detail below, however, as
a general comment which relates to all of the locations pointed to by the MGA
the following information is of relevance.
1.3 First, I am aware of, and have inspected, each of the various Foodworks outlets
which have been raised by MGA, and in a number of instances I have made
comment in the EIA’s which is pertinent to those premises. For example, in each
of the three EIA’s I make the following comment at Section 1:
For the purposes of this analysis supermarkets are defined as food & grocery
stores which are greater than 500 sq.m in size. Smaller food & grocery stores,
such as convenience stores and corner stores, also contribute to the total
retail turnover of the Supermarkets & Grocery Stores category as measured
by the ABS. However, those very small stores are not considered to be
competitive in a direct sense to larger supermarkets, as they operate in a
quite different manner to a full range supermarket, and are not, for the
great majority of the population, considered to be a viable destination for
the typical weekly food & grocery shopping trip. (p. 6)
1.4 In the Dandenong EIA I make the following comment at Section 3.3 of the report:
There are two quite small independent stores, an IGA foodstore located a
short distance west of Dandenong CBA and a Foodworks store at Doveton,
which are estimated to be larger than 500 sq.m., as well as a further two
smaller Foodworks stores, each less than 500 sq.m., in the northern part of
the trade area. (p. 29)
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Addendum Report 4 Statement of Evidence of Anthony Dimasi
1.5 As I discuss further below, in all of the cases raised by MGA the premises in
question are not what could reasonably be termed supermarkets, but rather are
generally convenience stores, and in all cases they are less than 500 sq.m GLA in
size. As I also make clear in the further information below, typically these various
FoodWorks stores are well presented, well stocked, and are operating effectively
even though in most cases they sit in the shadows of full-scale supermarkets, e.g.
as operated by Coles, Woolworths and/or Aldi.
1.6 These small convenience stores/foodstores are not substitutes for the typical
weekly supermarket shopping which the vast majority of Australian consumesr
would undertake on a regular basis. Rather, they operate as convenience stores,
with most purchases usually being generated as spur of the moment, emergency,
passing by, or walk-in trade. That is not to say that some consumers might not wish
to use them for all of their supermarket shopping – there might well be some
customers who, for whatever reason(s), prefer to shop at such small premises. In
those instances though, the reasons why those customers choose to use such
small foodstores in preference to the larger supermarkets will not change simply
because another large supermarket is added somewhere within the general
area.
Chirnside Park
1.7 In the case of Chirnside Park, there are three FoodWorks outlets which are
referred to by MGA, as well as two bottleshops and one IGA X-press store. The
IGA X-press store is situated at Croydon South, some 7 km by road from the site
for the proposed Kaufland store at Chirnside Park, and outside the expected
trade area I have defined for the Kaufland store. I consider that there is no
likelihood of any noticeable impact on the trading performance of such a small
facility, situated such a distance from the Kaufland store.
1.8 Similarly, for the two bottleshops raised by the MGA – Cellarbrations at
Mooroolbark and the Bottle-O at Croydon – I consider that on these small
businesses, located substantial distances in each case from the site of the
proposed Kaufland store and offering only packaged liquor (the range of which
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Addendum Report 5 Statement of Evidence of Anthony Dimasi
I would expect to be significantly more limited than that which would be
available in the Kaufland store) there will be minimal, if any, trading impact.
1.9 MGA has also raised three FoodWorks outlets for consideration in the Chirnside
Park matter – at Croydon (on Main Street); at Wonga Park; and at Lilydale.
1.10 The Croydon FoodWorks store, branded as FoodWorks Local, is approximately
400 sq.m in size based on my estimation. The store is located on Main Street within
the heart of the Croydon strip centre, which is a busy pedestrianised centre. The
store does not appear to have any dedicated carparking and has a frontage of
only some 5 metres to Main Street, with its packaged liquor offering is situated at
the front of the storeand the grocery aisles tucked away at the rear. The store is
also entered via a side entrance, and the facility generally slopes down away
from Main Street. As a possible alternative for typical regular supermarket
shopping, this store would be quite unattractive in my view – quite apart from its
very small size - and it is noteworthy that it already sits in the shadows of three full-
scale national chain supermarkets that are available in Croydon – Woolworths,
Coles and Aldi. Therefore, the future viability of this store will not be impacted by
the provision of a new Kaufland store at Chirnside Park, which in any case is
situated some 5 km away. The competitive overlap between what this store offers
and what the new Kaufland supermarket will offer will be minimal.
1.11 The Wonga Park FoodWorks store is situated approximately 6.1 km by road from
the site for the proposed Kaufland Chirnside Park store. Based on my inspection,
the FoodWorks store appears to be the only retail facility in Wonga Park, and it is
well located, well stocked and appears to be trading solidly. Wonga Park is a
relatively isolated residential area, set within a bushland context. This store, which
is an estimated 350 sq.m in size, will in my view continue to play its expected role
as a successful convenience shopping facility for Wonga Park, and is unlikely to
experience any trading impact from the new Kaufland store.
1.12 The third FoodWorks outlet referred to by MGA in relation to Chirnside Park is
FoodWorks at Lilydale. The former FoodWorks store at Lilydale, situated in what
was previously the Olive Tree Shopping Centre on Main Street, was long ago
closed (October 2015), and the site has since been redeveloped into a Bunnings
hardware store.
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Addendum Report 6 Statement of Evidence of Anthony Dimasi
Epping
1.13 The FoodWorks outlet identified by MGA in Epping is the FoodWorks Local which
is situated within Dalton Shopping Centre, on Dalton Road. The store is
approximately 400 sq.m in size, and it sits only a few doors away from the anchor
store of Dalton SC which is an Aldi supermarket. Clearly, the FoodWorks
convenience store is able to operate successfully as part of the same centre
which contains a much larger, full range supermarket, in essence because the
respective offers are sufficiently different that there is customer demand
available for both. Given this situation, and given the relevant other factors
relating to the Epping trade area generally – in particular the future growth in
trade area population as outlined in the EIA – there is no reason why the
FoodWorks convenience store at Dalton SC is likely to experience an impact
which would be higher than the average for existing Epping supermarkets as
outlined in the EIA, i.e. in the order of 5% - 6%. Rather, it is to be expected, and it
is certainly my expectation, that the likely impact on FoodWorks at Dalton SC will
be considerably smaller than the average, if there is any noticeable impact at
all.
Dandenong
1.14 There are two FoodWorks stores which are raised in the MGA response to the
Dandenong EIA – FoodWorks/Menzies Cellars which is located on Menzies
Avenue in Dandenong North, and FoodWorks Dandenong which is situated
approximately 2 km further to the north on Brady Road, also in Dandenong North.
1.15 Both of these stores are less than 500 metres in size, with FoodWorks/Menzies
Cellars estimated at approximately 400 sq.m based on my field inspection, while
FoodWorks Brady Road is approximately 350 sq.m in size.
1.16 FoodWorks/Menzies Cellars is part of a local strip shopping centre which is
situated directly opposite a community centre and associated playground
facility. The total strip centre is very well presented, and certainly appears to be
in excellent trading health. In addition to FoodWorks/Menzies Cellars, the strip
centre also contains a wide range of supporting retailers. The FoodWorks store is
itself very well presented and stocked, and appears to be trading strongly. The
FoodWorks Brady Road appears to be not quite as well presented as the Menzies
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Addendum Report 7 Statement of Evidence of Anthony Dimasi
Avenue store, nor to be trading as successfully, although it too, based on my
inspection, appears to be trading soundly. It forms part of a smaller strip centre
than Menzies Avenue, but which also contains a number of other retail stores and
services.
1.17 As I have pointed out at para. 1.4 above, the EIA which I prepared for the
proposed Kaufland store at Dandenong had regard for both of these stores, and
for all of the reasons that I have identified both in the EIA and in this Addendum
Report, I do not consider that the likely impacts on either of these two FoodWorks
store will be such as to, in any way, imperil their continued operation.
1.18 In my various inspections of all of the above facilities, as well as a number of other
smaller supermarkets, including numerous FoodWorks stores, which I have
undertaken as part of the field work research for both the three EIAs which have
already been submitted to the Panel, and further EIAs which I understand will be
submitted in the near future, I have observed that the presentation and apparent
trading performance of these various small convenience stores/ foodstores can
vary noticeably between premises. In my view, the management of these stores
is paramount in their trading success, and the examples that I have observed
which are well presented, well stocked and appear to me well managed –
usually with some point of difference from a typical Coles or Woolworths
supermarket – generally appear to be successful regardless of the competitive
context in which they operate. Again, I make the point that the customer offer
available in these smaller foodstores is very different to the offer of a full-scale/full
range supermarket, and the reasons why each attracts customers are quite
different. These two quite different offers co-exist across all parts of the Melbourne
metropolitan area.
Appendix 1: Curriculum Vitae