Kmart making move south to Andersons Bay site

The site of the new temporary Kmart store. Photo: Google Maps

The Australian retailer has been allowed to take over the Smiths City site in Andersons Bay Rd for four years, while it searches for a permanent home.

Kmart did not reopen in Meridian mall after Alert Level 4 this year, citing concerns about required seismic strengthening.

A Dunedin City Council consent allowing it to operate from the Smiths City site was issued on August 31, on a non-notified basis.

It will swap places with Smiths City, which is expected to open in the Meridian at the end of September.

It is not known when the new Kmart will open.

The consent approves 126 parks on site and specifies detailed traffic management requirements, to be implemented before the shop opens and independently reviewed after six weeks of operation.

A report from independent commissioner Gary Rae notes an assessment by Insight Economics Ltd, provided by applicant Otago Land Group Ltd, into the economic effects of allowing the larger retailer into the Andersons Bay area, which is removed from Dunedin’s central business district (CBD), found it was unlikely to have "any notable impact on the health, vitality and future vibrancy of the CBD".

It calculated the CBD would have a reduction of less than 1% of its core retail sales, which it considered to be a "less than minor" effect.

That report was externally peer reviewed by council-appointed economics consultant Derek Foy, who said while he agreed with Insight Economics the impact on the South Dunedin shopping centre would also be less than minor, he thought Kmart’s arrival could create some changes.

It was "entirely possible that a small number of retail stores there might in fact close as a result of the new trade competition introduced by the Kmart," Mr Foy said.

But he did not believe it would be detrimental to the South Dunedin business area as a whole "given the centre’s relatively poor health and limited core retail presence now".

The Insight Economics assessment said the benefits of keeping Kmart in Dunedin, by allowing it the temporary consent, included the employment of 80 staff and wages of close to $3million.

It estimated Kmart would have a turnover of $15million a year at Andersons Bay.

The consent notes that following the expiry of the four-year period, it is proposed activity allowed at the site would revert to large format retail.

Martin Dippie, of Otago Land Group Ltd, referred questions to Kmart.

Kmart was approached for comment, but had not responded last night.

Otago Chamber of Commerce chief executive Dougal McGowan while he did not know all the details, to hear Kmart was moving to Andersons Bay was not a surprise.

"What I do know is having Kmart move out of the centre and heart of the city would have an effect on other businesses, there is no doubt about it."

However, it was a positive that Kmart staying meant many jobs would be retained and possibly more added, he said.