THE MANAGEMENT INTERVIEW Ted van Arkel – Super Marketing Man talks shop

Ted van Arkel’s career history seems almost inextricably woven with that of supermarket retailing in New Zealand – and both go back nearly half century.
In the same year that van Arkel, then 15-year-old Dutch immigrant, was getting his first taste of the retail industry selling Christmas cards at Woolworths, Tom Ah Chee and Norman Kent opened New Zealand’s first supermarket at Otahuhu.
“That was in 1958 and I can clearly remember what an amazing store it was – how good an operation,” says van Arkel.
This first Foodtown store proved so successful that second was opened in Takanini just three years later – trumpeting such specials as box of Weetbix for just 19 cents. By then van Arkel had abandoned notions of further tertiary education in favour of the cadet training scheme at Woolies.
“Much to the horror of my parents, I was talked out of being teacher and got involved in business at very basic level. But it was an excellent training scheme and I learned to do the basics very well. I’ve always maintained that if you do the basics well, then the rest will follow.”
What followed for van Arkel was some 20 years with Woolworths during which he worked his way up the management ladder to take on senior roles both in New Zealand and Australia before leaving the company in 1980 to venture first into wholesaling then timber. It was further 18 years before series of coincidences returned him to grocery retailing.
Meanwhile, the Foodtown supermarkets founded by Tom Ah Chee and partners had segued into Progressive Enterprises (PEL) – the company that in 1998 took Ted van Arkel on as its deputy CEO. The rest, as he says, is history.
However, it does seem very apt that van Arkel was at the helm when Progressive finally made it through veritable minefield of legal obstacles to acquire Woolworths – thus putting him in charge of the company that had introduced him to retailing 44 years earlier.
It also gave him chance to meet up with one of his career mentors – Tom Ah Chee (who died just couple of years ago aged 72).
“I’d heard lot about Tom in days gone by and tried not only to meet up with him – which I had the privilege of doing couple of times – but to bring back some of his philosophy into the business. He was visionary who had the ability to listen and talk to people at all levels in the company. And that is something I’ve tried to do.
“When you’re sitting at the top of the tree – whether as store manager or CEO – you can never underestimate the power of people in your organisation. If they can trust you and you can bring them on board in terms of your thinking and direction then that starts to create major force.”
He describes his management style as participative. “I like talking issues through with the team and being very upfront. But once agreement has been reached and it’s been signed off, there has to be pretty good reason why we would change an agreed direction.”
And one of the management lessons he’d like to pass on is the value of mentor.
“I think any young executive looking to move forward should try and select someone to look up to, who can inspire your own actions and direction.”
Someone who inspired much of his own attitude both toward business and life was the late American preacher and author Norman Vincent Peale (of The Power of Positive Thinking fame) who’s been called an “apostle of the positive”.
“I used to run the Woolworths annual conferences and one I remember well included film in which Peale was talking about having positive mind and sense of commitment. And those two things have certainly been drivers in my personal career path.
“It’s easy to be negative these days but there is always opportunity to get through difficult issues or when there are differences of opinion to find resolution. You just have to keep working at it rather than getting stuck in stalemate.
“I like being positive about things – even though at times the results don’t seem very positive.”
It’s quality that undoubtedly stood Van Arkel in good stead during the drawn-out legal stoush to acquire Woolworths.
“That was tremendous management lesson. Whilst I’d had plenty of experience in terms of company mergers, this was the most challenging. It was not just going through the whole due diligence process but having legal challenges every step of the way.”
The challenges came from PEL competitor Foodstuffs which disputed Commerce Commission approval of the acquisition in courtroom odyssey that went right up to the Privy Council. Van Arkel has clear recollection of the 3.30am call he got from lawyers in the UK in June 2002. It proved brief.
“We’d won – after all the High Court and Appeal Court hearings, the challenges, the millions that had been spent – the Privy Council took only 20 minutes to decide in our favour.”
But that wasn’t the end of it.
“After getting the green light we went to the market for fundraising and were about three days from closing the books when Foodstuffs slapped an injunction on the sale in the High Court. All hell broke loose and we worked from that Wednesday afternoon almost continuously with QCs and lawyers to try and find resolution.
“The injunction was lifted Friday morning, then we went hell for leather to finalise the deal between Dairy Farmers (then owners of Woolworths) and ourselves at 8.30pm on Sunday June 15. So finally we could go to management and say we’re now together.”
On the positive side, the year’s worth of frustration had also allowed year’s worth of planning how best to implement the merger. Both organisations were about the same size; inevitably there were structural duplications that had to be resolved and Woolworths staff had already gone through long period of uncertainty about the company’s future ownership.
“We knew we had to move on the implementation process quickly and make decisions earlier rather than later. When things are in state of flux, people want to know where they stand.”
Successfully merging the two organisational cultures was less of an issue as they were in many ways quite similar. More challenging, says van Arkel, was the merging of Winstone’s into Fletcher Merchants – it seems the concrete and timber cultures were further apart.
Which highlights the fact that van Arkel’s career hasn’t been confined to the big food retailers but ranges from variety and wholesaling to tourism and timber – including six-year stint running PlaceMakers store in Papakura.
That arose from his role at Fletcher Merchants which involved setting up the joint venture PlaceMaker stores based on Canada’s Beaver Lumber model.
“It went really well and after couple of years I could see owner operators were starting to make some real money so I thought maybe there’s something other than this suit and tie work. Why not roll up my sleeves and get in my own operation.”
He did – and in 18 months lifted store turnover from $4.5 million to $17 million – admittedly during fairly buoyant period in the housing market. And there he might have stayed had not the arrangement with Fletchers turned little sour when the company opted not to renew its contract with him after he’d taken the opportunity to buy what had been the store’s leased premises.
When negotiations proved fruitless he decided to “walk” – and didn’t have to go far. Just down to the local shopping centre, in fact, where he bumped into some old mates from the supermarket industry. It proved timely meeting that, van Arkel relates, led within few months to his interview with the board of Progressive.
“The rest, as they say…”
Although van Arkel is stepping down from the CEO role at the end of this year, he’s not severing his ties with grocery retailing as Progressive, now owned by Australia-based Foodland Associated (FAL) is keeping him on as adviser to the group. And his recent appointment to the Auckland Regional Transport Authority – the body set up to help relieve Auckland traffic woes – offers welcome new challenges.
While retailing has been consiste