Stock levels 'lowest ever' at Southland department store

Tuesday, 16 March 2021

The H&J Smith department store building on the corner of Don and Kelvin Streets in Invercargill.

A major Southland department store is operating on the lowest low stock levels it has ever had due to worldwide fallout from the Covid-19 pandemic, a boss says.

H&J Smith chief executive John Green said he had always been mindful that the main impact of Covid on the business would be on supply, and that had proven to be the case.

“The impact is quite significant, we are operating on the lowest inventory levels we have ever operated on,” he said.

Some categories were impacted more than others.

* Closing the door on 100 years of historic retailing in Gore

* Coronavirus: Opening doors 'would be safer than click and collect'

Fashion deliveries for the winter were running late, footwear deliveries had been “very late” and they were having trouble getting in outdoor products to sell.

The supply shortage was an issue for businesses throughout the country.

“The whole supply chain is log jammed around getting product out of China, getting product into New Zealand, shortage of capacity on ships, shortages in containers, globally it’s a real problem,” Green said.

He had spent a lot of time tracking stock and talking to suppliers and looking for alternatives.

“It’s an incredibly time-consuming and concerning area.”

H&Js has closed three southern stores and downsized its Gore store in recent months due to a range of factors including Covid-19, increasing wage and compliance costs, an ageing store network, supply issues and more competition.

But Green said sales at its Invercargill H&J store had fired up after lockdown ended in April 2020 and had continued, due in part to New Zealanders spending their money at home instead of overseas.

Spending levels at the store were only now working back towards pre-lockdown levels of 2019.

“We are holding at those levels but it’s getting patchy and varies by category [due to supply issues].”

Another city businessman, Rob McMurdo, of Wensley Cycles, said business was booming, but he could not get enough stock to keep up with demand.

McMurdo had been unable to get kids bikes into his store to sell for Christmas 2020 for the first time in 40 years due to the nationwide supply issues.

And this week, he said he was still struggling to import bikes to sell, while importing bike parts to do repair work was also proving difficult.

However, he was not complaining, saying the supply issues were offset by strong sales which had continued since New Zealand came out of Covid-19 lockdown in 2020.

“I have been here 40 years and seen good and bad times, and dare I say it, this is good,” he said.

“But I don’t want to make a big thing of it because there are people who are hurting.”

The marketing manager of another Invercargill business, Fat Bastard Pies, said it had bounced back after lockdown 2020 thanks to its loyal customers.

“Coming out of lockdown last year and leading up to Christmas we had huge support from our customers which let the business survive. Without that we are gone,” Simon Owen said.

Covid-19 lockdown had reinforced the need to future proof the business and Fat Bastard Pies, which sells from its Invercargill store, had planned to launch an online service to households throughout the South Island early this year.

Fat Bastard Pies marketing manager Simon Owen said they still required infrastructure for both the baking and website to make it a reality, and launch date would be sometime in 2021.

Covid-19 had stressed the importance of being reliant on ore than just “lunchtime retail”, he said.

“It is future proofing, Covid’s made everyone look at how they can future proof their business.”