Foodstuffs may reduce Gilmours, Toops wholesale footprint, in talks with 128 staff

See also: More than 100 Foodstuffs workers laid off

Foodstuffs North Island, part of the cooperative group that makes up New Zealand's biggest supermarket operator, is in talks with 128 staff at five Toops and Gilmours wholesale stores which are facing the axe.

The Auckland-based grocery group last week announced a review of its Cash'n Carry wholesale business, which sells grocery items to retailers, and operates the Toops and Gilmours outlets. The key focus of the review was the division's footprint across the North Island. Foodstuffs North Island plans to shut the Toops stores in Napier and New Plymouth and its Gilmours stores in Panmure, Henderson and Rotorua, and has entered into talks with affected staff, it said in an emailed statement. Stores in Albany, Mt Roskill, Manukau, Hamilton, Tauranga, Palmerston North and Wellington aren't affected by the proposal, although remaining Toops outlets would be rebranded as Gilmours.

"It is important for us to understand the impact any decision we make has on both our staff and customers and this consultation process is about making sure we listen and meet the needs of all parties concerned," Foodstuffs North Island general manager retail Doug Cochrane said.

Foodstuffs North Island was formed through the merger of the Auckland and Wellington cooperatives in 2013 in a bid to bring down costs in the face of growing competition. In the 2014 annual report covering the 56 weeks ended March 31, 2014, the grocery chain said both Gilmours and Toops increased their share of the wholesale market, which "delivered very positive results both in terms of goodwill and the bottom line."

The wholesale Cash'n Carry division sells grocery items to retailers, who can either go to their local store or get it delivered to their premises.

First Union, which represents about 20 of the workers facing the cut, urged Foodstuffs to reconsider the proposed rebrand, saying stores in the upper North Island that had already transitioned to the new owner-operator model showed "little to no improvement in business," general secretary Robert Reid said in a statement.

Reid told BusinessDesk he expects a final decision on Friday, and is hopeful the Napier store may dodge closure after a groundswell of support from local businesses to keep the outlet open.

"The employers have been having demonstrations outside, which is wonderful," Mr Reid said. "Normally it's us who are demonstrating, not business owners."

(BusinessDesk)