Future of dairies, convenience stores hangs in the balance

Sunday, 18 March 2018

The owner of Hillcrest Mini Supermarket dairy was hit over the head with a hammer by a robber on Saturday morning.

The future of dairies is unclear as tobacco-driven crime skyrockets, the convenience stores association boss says.

Aggravated robberies jumped 87 per cent in the year to May 2017, with more than 1200 nationwide. Cigarettes were among the main targets.

Some dairy owners have stopped selling cigarettes to try to deter robbers, but are now paying the price.

Dave Hooker, the executive director of New Zealand Association of Convenience Stores which mainly represents service stations, said the future of dairies and convenience stores were 'at best uncertain and in many cases frightening'.

Tao Liu says the decision to stop selling cigarettes is costing his business $700 a week.

* Dairy owners repeatedly hit by thieves stop selling ciggies, but pay the price

* Dairy owners will be able to up their security thanks to Government subsidy

* Under siege - no way out for dairy owners**

On Saturday, three teenagers robbed a dairy in Hamilton armed with hammers. One member of the hoodie-wearing trio held the lone shopkeeper down while the others stole cash and tobacco.

A fog cannon installed above the drinks fridge in one south Auckland dairy.

Last month, an Auckland dairy owner was attacked with a wrench by someone who wanted cigarettes.

In 2014, Auckland dairy owner Arun Kumar, 57, died after being attacked by a then-14-year-old and his 12-year-old friend.

And last Tuesday, a Hamilton East dairy owner was severely injured by a machete-wielding robber.

The Te Kowhai Food Centre, subject to at least 10 robberies, has since stopped selling tobacco, costing its owner $700 in sales a week.

Police Minister Stuart Nash says the cost of security systems meant they were still out of reach for many dairy and superette owners.

Hooker said tobacco accounted for up to 40 per cent of business.

'The value of their business is being eroded through risk of violence. Even at the current low gross profit margin, this turnover and income is almost impossible to replace quickly.'

Robberies were an 'unintended consequence' of the year-on-year excise tax that has been put on tobacco since 2010, he said.

The average price of a 20-pack of cigarettes was about $11 in 2010, and was now about $25.50.

Tobacco taxes were a 'real-world example of how the best policy intentions can go wrong', he said.

'Tobacco has become a high value commodity that can quickly and easily be on sold for cash. It's all about cash.

'With the odds of being captured and prosecution being low, this sort of thieving could be a means to an end at the expense of small business owners.'

Hamilton shopkeeper Sandip Patel has a fractured skull after being struck with a machete in an aggravated robbery.

Retail analyst Chris Wilkinson agreed.

'There is an increasing 'no fear, no logic' element to these aggravated robberies, so countering them with a strategic approach is not always going to win,' he said.

'We're seeing across retail, more unpredictable situations, which is concerning both for a safety and commercial-loss perspective. It's best described as no fear.

'Many of the areas dairies exist will become too expensive to remain and have more profitable uses.'

However, Retail New Zealand spokesman Greg Harford said dairies were 'far from dead', but owners needed to take security issues very seriously.

'Tobacco products are a key target for criminals, and it's important that dairy owners take steps to keep their customers, employees and family members safe.

'It's important for dairies to lay out their stores in a way to discourage crime, ensure good lighting and visibility throughout, and to look at crime prevention technology such as cameras, alarms and fog cannon to help deter crime.'

Twenty dairies have installed fog cannons so far.

Last year, the National government announced dairies and superettes could be kitted out with ultra-sonic sirens, fog cannons and DNA spray as part of a police crackdown on violent robberies.

But new Police Minister Stuart Nash said the way the funding was set up last year did not go far enough, and the security systems were still out of reach of many dairy and superette owners.

The previous scheme required businesses to contribute 50 per cent of the cost but that was beyond the reach of many, Nash said.

A fog cannon could cost about $4000, while a DNA spray system could be more than $3000, and an audible alarm can be around $1700.

The new government had not put any additional funds into the scheme, but had tailored it to make the security systems much cheaper for the most at-risk stores. Essentially, it was a more targeted approach.

The updated scheme meant at-risk business owners would contribute no more than $250 towards a fog cannon.

To date, 20 dairies have had fog cannons installed, with another 17 signed up.

However, fog cannons did not always work.

On March 8, armed thieves were not curbed by a fog cannon released as they forced entry into a Hillcrest Caltex service station. The staff member fled into a staff room, and the men left with cigarettes and the till.

A spokeswoman for Imperial Tobacco, which sells cigarettes under brands including Winston, JPS and West, said the company was 'very concerned' at the ongoing level of robberies and the risk to businesses, owners and staff.

'These stores, often run by families, are unfortunate victims of the unintended consequence of the government policy of tobacco excise increases ramping up the price of a packet of tobacco and fuelling an expanding black market.

'With tobacco excise legislated to increase by 10 per cent a year through to 2020, this issue is set to worsen, and it's wrong that any retailer should feel forced by fear of crime to stop selling their customers a legitimate product.'

Imperial had spoken to its retailers about the range of measure they could taken to reduce risk and harm, she said.