ATTACK ON CHAIN STORE SYSTEM

Evening Star, Issue 22440, 10 September 1936, Page 14

ATTACK ON CHAIN STORE SYSTEM

“ PICKING THE EYES" OF BUSINESS PARLIAMENTARY COUNCIL HEARING EVIDENCE [Per United Press Association.] WELLINGTON, September 9. The suggestion 'that retail stores should be licensed to prevent chain stores from operating in New Zealand and also to prevent bargain stores from stocking small quantities of certain'lines was made to the Industries and Commerce Committee of the House of Representatives when the first of the evidence on the petition from the retailers in Blenheim was heard. The petition alleged that the chain-store system was not in the interests of the community in general and asked for legislation to protect the interests of individual traders. <

The evidence and examination of the first witness called occupied the morning, and it is expected that the whole investigation will extend over a long period, as several hundred witnesses are to be called. • It was 'stated to-day that bargain stores were “ picking the eyes " out of the lines stocked by all classes of retailers and consequently spoiling business for other people. It was also claimed that unfair competition was made possible by reason of the buying power of the chain-store organisations, and legislation was suggested to control both these features. By questions one counsel established the fact that individual traders had combined their buying power to reduce the cost. Two penal taxes were suggested by a supporter of the petition. The first was ,a straight-out trading tax, increasing steeply as the number of stores increased, so steeply that the witness admitted a tax of £1,943,000 would have to be paid for a chain of 10 stores. The second would provide a similar tax unless at least 00 per cent, of the articles required for a particular trade, as for instance drapery, was stocked. The first tax, witness said, would limit the buying power, and tho second would prevent bargain stores from picking the eyes from other traders’ fines.

Mr J. D. MMlobie. of Blenheim, in support of tho petition, contended that chain or bargain stores employed a large proportion of girls and only a small proportion of senior labour, individual stores employed women who were not able to secure employment. Chain stores employed young girfs, and when they were old enough to receive the top rate of wages they were discharged. They were discharged at the average age of 91, and at that time of life they were not wanted by other stores, it was then too fate to study another trade, so what was left for them? They were placed in an unfortunate position because work in factories was not available for them. The same thing applied to youths. Only a few wei’e kept on for executive positions.

Mr M'Robie went on t 6 deal with the aspects of trade where chain stores wore able to purchase their goods more cheaply than independent traders, and as a result were able to place them before the public at a much lower price. It was a striking fact that no proprietors or managers of chain stores took part in civic activities, he added. The Minister of Industries and Commerce (Mr Sullivan) said that when he was Mayor of Christchurch both the managers of Woolworths and McKenzie's worked hard on his Relief Committee.

Before the chain stores were opened, Mr M'Robic said, the profits ot business had been spread, but now the profits of business were going to big combines instead of individuals. in Blenheim four grocers 'had been put out of lousiness, and prices to-day were higher than they had been, while other grocers were being forced out. If that sort of thing were to go on three-quarters of the retailers would be shut down and the council would he at its wits’ end to get its rates. The chain, stores claimed they had reduced the cost of living. He admitted that goods were cheaper, but it had been done by forcing manufacturers to take uneconomic orders and by encouraging “ backyard ” factories. The inquiry was adjourned till tomorrow .