Retail Institute Annual Report 2011

Retail instituteannual report

2011

Retail Institute is New Zealand’s Industry Training Organisation for everyone

working in the retail, wholesale and distribution industries.

We are a government funded organisation that has been set-up to advise on

training, set standards and develop national qualifications.

Our focus is on the 30-40,000 supervisors, managers and business owners who

work with the thousands of staff who make up New Zealand’s retail and distribution

industries. Everything we do aims to empower managers to train and upskill their

‘front line’ staff in order to improve productivity, and increase the bottom line.

contents

chaIRmaN’s RepORT ................................................ 3

chIef execuTIve OffIceR’s RepORT ....................... 6

2011 hIghlIghTs ....................................................... 8

peRfORmaNce TReNds ............................................ 10

bOaRd Of dIRecTORs ............................................... 14

fINaNcIal sTaTemeNTs ........................................... 16

Income statement .................................................... 16

Statement of changes in equity ................................ 16

Cash flow statement ................................................ 16

Balance sheet .......................................................... 17

Summary notes to the financial statements .............. 18

Audit report ............................................................. 19

ReTaIl INsTITuTe dIRecTORy ................................... 20

professionalsstronger sales

‘those that have participated in this have seen instant successes. development in key areas has meant that staff have become stronger sales professionals, and more competent staff members.’

Hayden PieRce - stoRe ManageR, Bond+Bond, dunedin

chairman's Report • 3

chairman’s reportPHiliP sHewell

The past financial year has produced its fair share of challenges for Retail Institute.

It was a difficult year economically for New Zealand in general, the retail sector in

particular, and the industry training area as a result. The Tertiary education commission

(Tec), the government’s industry training funding arm, was stretched and set revised

educational performance Indicators (epIs) for all ITOs, which upped the benchmarks

for ITO performance. Tec also indicated its desire to see a smaller number of high-

performing, larger ITOs. an interesting year indeed!

I am pleased to be able to report that your ITO

responded well to these turbulent conditions

and recorded a successful result for 2011.

Although trainee numbers were down, training

outcomes, in terms of completion of courses

and credits achieved, were much improved

and exceeded the EPIs that had been set for

us. Financially the year was sound with a

small surplus leaving a robust balance sheet

and Members’ Funds of $3.7 million.

Retail Institute is in a good position financially,

structurally and strategically to continue to

perform at a high and improving level in the

coming year.

The changes made to the business operating

model in 2010 were bought to fruition over

the past 12 months with a positive impact

on trainee progression and achievement

as recognised by TEC. There was a lower

number of trainees but with higher results,

particularly in the number of full National

Certificates that were achieved. Despite these

achievements, Retail Institute’s funding from

TEC declined by 22% in 2011 for two reasons;

the government’s total contribution to industry

training funds is decreasing and secondly,

2011 funding was based on the ITOs

performance in 2009.

The New Zealand retail economy remains

sluggish in its recovery, with the country still

suffering from tough economic circumstances.

The economic climate affects the Government’s

appetite to spend, noted in the 2011 and the

2012 Government budgets with declining

investment in the Industry Training Fund.

The economy is also taking its toll on the

retail trade, with many retail operations

contracting both their physical presence and

their staff numbers.

We firmly advocate that preparing skilled

workforce employees for an economic

recovery should be a priority of Government

and employers for all sectors, including those

that are unregulated such as the retail and

wholesale sectors.

Retail Institute believes that the workplace

is a valid and dynamic classroom for the

more than 50% of employees in the retail

and wholesale sectors that have either NO

high school qualification, or at best, Level 1

NCEA. The skills learnt in the service sectors

and more importantly, a positive experience of

industry training and tertiary education, will

influence the pathways the young people in

retail and wholesale choose throughout their

working life.

4 • Retail Institute annual Report 2011

Training youth in the retail sector is about

developing New Zealand’s future employees,

as 80% of employees across all sectors have

worked in the service sector at some time.

The financial results for the organisation

remain sound largely due to expenditure being

kept in check following internal reorganisation,

but also through increased industry cash

contribution. In a year when some Industry

Training Organisations have had to pay back

to TEC significant amounts of funding, Retail

Institute was found, through TEC audits, to be

using funding appropriately.

Towards the end of 2011 Retail Institute

further explored the opportunities of a closer

relationship with HSI (Hospitality Standards

Institute) and ATTTO (Aviation Travel and

Tourism Training Organisation), the other

significant ITOs operating in the services

sector. While the establishment of SITA

(Service Industry Training Alliance) across the

service sector Industry Training Organisations

some years ago has increased collaboration

it has not provided the benefits of shared

services that we had anticipated and desired.

Given the similarities of the three ITOs (ATTTO,

HSI and Retail Institute), we see real benefits

of a stronger advocacy voice for industry

training due to their combined contribution to

New Zealand’s GDP and the size of the

combined workforce. The similarities of the

three ITOs’ existing practises offer some

efficiencies, but more importantly we are

looking for improved outcomes for trainees

and the industry sectors through a closer

working relationship. During 2012 Retail

Institute, in association with HSI and ATTTO,

plans to fully investigate the potential of a

merger of the three ITOs.

Following four years of very positive input

as the organisation’s Chief Executive, John

Meeuwsen retired to a slice of paradise on

Waiheke Island. We are hopeful that he isn’t

lost to the industry training sector completely

and feel sure that he will continue to

contribute. I would however like to take this

opportunity to recognise and thank John for

the major work that he did in making Retail

Institute the successful organisation that it

is today and his being instrumental in the

creation of the SITA group.

I would also like to offer my thanks to

Desleigh Jameson who took up the Chief

Executive responsibilities half way through the

year. She and her team have worked tirelessly

to record last year’s achievements and to

position the organisation for the future. We

are all grateful to have such a talented and

committed team.

Aston Moss retired from the Board following

a career move away from the retail industry.

His contribution over his years on our Board

was significant, particularly the leadership of

our People and Performance Subcommittee.

Finally I would like to offer my thanks to my

fellow Board members for their support and

continued commitment over the past year.

‘We firmly believe that preparing skilled Workforce employees for an economic recovery should be a priority of government and employers for all sectors.’

confidenceincreased

‘We are seeing distribution centre staff display greater confidence, shoW innovation and leadership, and communication betWeen the distribution centre and all areas of the business has vastly improved.’

adaM sands, PeRfoRMance develoPMent coacH, officeMax


chief executive officer’s reportdesleigH jaMeson

To convince retailers and wholesalers to continue to train and develop staff when

turnover and revenue is below the heady days of 2007, and current growth in the sector

is marginal, is a challenge for Retail Institute. however those that do invest in their staff,

and do so comprehensively with training programmes that offer a pathway from the

shopfloor or the inwards goods dock to the chief executive’s office, are experiencing

staff who stay in their employ longer, are far more productive, and have a greater range

of skills to offer their workplace.

The Christchurch earthquake affected many

retail and wholesale businesses, yet through

this devastating time Christchurch remained,

and continues to be, one of New Zealand’s

strongest regions for retail and distribution

training. Employers were able to keep staff

engaged through training, while finding

alternative positions for staff when stores

could no longer be opened. Retail Institute also

worked with local providers to create off

job workshops.

Retail Institute’s Christchurch staff spent most

of 2011 in temporary office accommodation

due to the 2010 and 2011 earthquakes. I

would like to pay particular homage to our

Christchurch staff who remained positive and

provided fantastic support to the retail and

wholesale communities in Christchurch, well

beyond the expectations of their roles.

Since 2009 Retail Institute has been working

with a new ethos. Everything we create,

facilitate and advise on, considers that well-

rounded supervisors and managers will

have the greatest impact on productivity in

the retail and wholesale sectors. Based on

the concept of the ‘Thinking Supervisor’,

a phrase coined at the Retail Chief Executive’s

forum in 2010, Retail Institute launched several

new initiatives in 2011 that focussed on the

development of supervisors and managers,

and the development of a learning culture in

the workplace.

The National Certificate in Retail (Level 3)

was relaunched during 2011, to reflect the

outcomes of the Chief Executive forum and

develop ‘thinking supervisors’. This resource

aims to prepare supervisors and assistant

managers for senior store management

positions. Over four modules (Knowledge is

Power, Store Performance, Staff Management,

and Managing Stock) trainees learn how to

effectively manage their staff, resources

and stock.

To support the National Certificate in Retail

(Level 4), Retail Institute launched a nationwide

network of tutors to help managers who

are studying. Those completing the National

Certificate in Retail (Level 4) get access to

12 hours of tutoring. This creates a self paced

training programme, with many managers

working autonomously on the topics they are

confident with, and using their tutor for those

topics they are more anxious about.

chief executive Officer's Report • 7

The outcome of these new initiatives and the

refining of Retail Institute’s services has seen a

significant and demonstrable improvement in

the Educational Performance Measures used by

the Tertiary Education Commission.

In May 2011 Retail Institute introduced a

Service Delivery Model. The aim of this model

is to offer a tailored service that adds value

to the businesses we work with. The Service

Delivery Model helps employers and Retail

Institute to measure outcomes. By recognising

that we are offering a service and delivering

on it, we are enhancing the Retail Institute

brand as we become a trusted partner of

retail and distribution employers. Income from

the Service Delivery Model is monthly and

employers only pay for the period of time that

a trainee is active on a programme and they

are utilising our services.

While the performance of trainees improved

notably, the number of trainees involved in

Retail Institute training dropped almost

10% from 9,829 in 2010 to 8,854 in 2011.

The reasoning behind the reduction in trainee

numbers isn’t readily identifiable as there are

several factors to consider:

• Marketing budgets were reduced due to

the lower rate of funding in 2011

• Limited Credit Programmes were abolished

due to future funding restrictions and

not being included in early performance

methodologies by the Tertiary

Education Commission

• Many existing clients moved their new hire

policy to fixed term or part time contracts

where funding is not available, indeed the

number of unfunded trainees increased.

In closing we recognise that 2011 was a

time of significant upheaval for Retail Institute

through audits, a restructure and change

of Chief Executive. It was also one of great

achievement where trainee performance

exceeded previous years, with remarkable

increases in credit achievement, programme

completion and customisation of services.

These results were achieved because of

the committed and engaged team at Retail

Institute. I’d like to acknowledge their

perseverance and resolve to make a difference

to the employers and employees in the

retail and wholesale sectors through skill

development and recognition.

‘offering the supervisory and management qualifications in conjunction With our oWn internal training provides a clear career development pathWay’.

jason Mccrae, training Manager, Repco


governance, management, and strategy: good

the quality of the assessment is excellent

the value of the outcomes for employers and their trainees is excellent

confident in the performance of retail institute

collaboration with other itos: excellent

resource development: excellent

Retail ModeRn aPPRentice of tHe yeaR 2011

The Retail Modern Apprentice of the Year

award recognises the hard work apprentices

have put in to developing their retail careers.

There were eight finalists in the 2011

competition. Erin Booth from The Dining Table

in Hamilton was the overall winner.

‘The skills Erin has learnt in the workplace have

given her the confidence and knowledge to

manage her own store.’

Katrina collins, Training adviser,

Retail Institute

nZQa exteRnal evaluation and Review

In 2011 Retail Institute underwent an

‘External Evaluation and Review’, carried out

by the New Zealand Qualifications Authority.

The purpose of the review was to provide

a public statement about the organisation’s

performance and capability in self assessment.

The outcome of the review was extremely

positive with no recommendations for

improvements:

Erin Booth

2011 highlights

2011 highlights • 9

‘With the help of Retail Institute we have

been able to develop the most comprehensive

training material I have seen in my 20 years of

retailing. I do not make that claim lightly.’

andy mcpherson, central Retail manager,

Resene paints ltd

‘The workbook is well set out, user friendly

and fun for the students and the trainer.

Retail Institute has met the needs of the

students by producing this workbook.’

shona hurndell, great hospitality

industRy tRaining RegisteR (itR)

In March 2011 we became one of the first ITOs to integrate with TEC’s ‘near real time’

ITO compliance and reporting system, the Industry Training Register (ITR). The ITR was

created to provide a transparent two-way view between the TEC and an ITO’s performance.

To maximise the use of the tax payer’s dollar, we co-led a consortium of 15 ITOs to share

costs and learnings in the integration project. The resulting collaboration resulted in

significant savings for all members ITOs and ensured that all ITOs in the consortium were

able to successfully link into the ITR.

ResouRce develoPMent

In 2011 Retail Institute developed and launched a significant number of new resources.

These included the National Certificate in Retail (Level 3 and 4), two new school’s programmes,

and customised resources for Resene.


performance trends

TRaININg agReemeNTs

2011 new training agreements entered: 4,080

The number of training agreements decreased in

2011 as Government funding was reduced and

trainees signed up to longer programmes.

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

1,606

2,3582,221 2,103

4,826

1,884

2,582

2,282

3,661

4,080

sTaNdaRd TRaININg measuRes achIeved

A Standard Training Measure (STM) is the unit

TEC uses to fund ITOs. One STM equates to a

120 credit programme.

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

2200

2000

1800

1600

1400

1200

1000

800

600

400

200

0

performance Trends • 11

INdusTRy peNeTRaTION RaTe

2011 number of trainees: 7,180

2011 penetration rate: 3.26%

‘Penetration rate’ means the number of

people in training at some point in the year

as a proportion of the people employed in

the retail industry.

2007 2008 2009 2010 2011

3,7131.8%

3,6551.7%

4,9352.5%

7,995 (3.82%) 7,180

(3.26%)

peRceNTage Of maORI aNd pasIfIKa TRaINees

Maori engagement remains steady and

we are seeing steady growth in the number

of Pasifika trainees.

2007 2008 2009 2010 2011

11.4%

5.6%

12.3%11.4%

11.9% 11.6%

6.4%

8.8%9.3% 9.3%

Maori

Pasifika

cRedIT achIevemeNT peRceNTage

2011 percentage: 57.07%

Credit achievement is a Tertiary

Education Commission (TEC)

published Educational Performance

Indicator. In 2011 57% of available

credits were completed by trainees,

increased from 39% in 2010.

2011 cRedIT achIevemeNT

2011 total: 127,467

In 2011 our trainees achieved

127,467 credits, a 22% increase on

2010. Trainees now achieve credits

as they progress through their

programme which is helping towards

earning their qualification.

140,000

120,000

100,000

90,000

80,000

70,000

60,000

50,000

40,000

30,000

20,000

10,000

target

2008 2009 2010 2011

31.20%

14.94%

38.69%

57.07%


cOmpleTION Of pROgRammes

2011 completion percentage: 52.93%

Programme completions increased from

22% in 2010 to 53% in 2011. This is also a

TEC Educational Performance Indicator and

demonstrates that significantly more trainees

are completing their qualifications.

2008 2009 2010 2011

30.66%

12.24%

21.71%

52.93%

performance Trends • 13

‘2011 Was a time of great achievement With remarkable increases in credit achievement and programme completion. these results Were achieved because of the committed and engaged team at retail institute.’

desleigh jameson, ceo, Retail institute

NaTIONal ceRTIfIcaTe aNd lImITed

cRedIT pROgRamme cOmpleTIONs

2011 completions: 4,163

The total number of programme

completions increased by 27% from 2010,

with significant increases across our Level 3

and Level 4 programmes.

2007 2008 2009 2010 2011

1,4901,242 1,093

3,290

4,163


TRevOR dOuTheTT | chaIRmaN – audIT & RIsK cOmmITTee

After nearly 35 years at LV Martin & Son Trevor has recently led the acquisition of the Babycity chain.

Trevor is a Finance graduate from Victoria University (BCA) and has become a career retailer with a strong interest in training and the work of Retail Institute. His retail focus is strongly centred around customer service based on knowledgeable and committed teams.

He is the Chair of the organisation’s Audit and Risk Committee.

phIlIp shewell | chaIRmaN

Philip is a professional company director following 30 years of retail management experience in NZ, Australia and the UK. His last executive position was that of Managing Director of Kirkcaldie & Stains Ltd in Wellington.

Currently, he is a trustee of the Wellington Museums Trust, and an independent director of Kircaldie & Stains Ltd.

TRIsh mcleaN | chaIRmaN – peOple & peRfORmaNce cOmmITTee

Trish McLean is a founding Director and CEO of Retailworld Resourcing, a specialist recruitment company with offices throughout Australasia.

Her skills in developing a niche brand and dedication to the retail industry have led Trish to win numerous awards; awards include the 2007 Business Woman of the Year from Her Business, Ernst & Young Entrepreneur of the Year in the service category and have led Retailworld to win the annual NZ Seek recruitment industry awards consecutively since 2003.

Trish is a strong advocate for retail as the career of choice and has developed the Retail Positioning Programme (RPP); a national PR campaign to secondary schools, training providers, tertiary institutes and the wider community promoting retail as a viable and smart industry, full of opportunities. She founded a networking group, Executive Women in Retail and continues to drive initiatives, like the Retail Career Map and Career Guide, to benefit and promote the retail industry.


board of directors

maxINe gay

Maxine is Retail Sector secretary of FIRST Union (representing workers in finance, industrial, retail, stores and transport sectors). She has gained extensive experience in the trade union movement since joining the staff of the Clerical Workers Union in 1983. Prior to her current position Maxine was secretary of the Clothing, Laundry and Allied Workers Union and was General Secretary and then President of the New Zealand Trade Union Federation.

board of directors • 15

maRy maRshall

Mary is currently the Employment Relations Manager for The Warehouse Ltd. She has over 20 years experience in the retail industry and this year she celebrated her eighth anniversary with The Warehouse. As a dedicated supporter of training, Mary has been involved with Retail Institute since its inception.

Mary is also the immediate Past International President of POWERtalk International, a worldwide training organisation. She is also a member of Executive Women in Retail.

In 2001 Mary was a joint winner of the EEO Trust Work, Life and Family ‘Walk the Talk’ Award.

desleIgh JamesON

Desleigh accepted the role of Chief Executive Officer at Retail Institute in September 2011 having previously held the position of General Manager. Her executive career covers B2B and wholesale distribution in the consumer electronics industry and extends to the services sector with Tyco Corporation. On completion of an Executive MBA at the University of Auckland she continues her association with the business school as a mentor for young women who aspire to business careers and is a judge of Young Retailer of the Year for both Wares and Hardware Awards. Desleigh was elected to the Board of the Industry Training Federation in 2012.

board of directors • 15

chief executive officer

JOhN albeRTsON

John is currently Chief Executive Officer of the New Zealand Retailers Association. John has been CEO of the NZRA for nearly 16 years, coming from the role of Marketing Director of New Zealand’s largest specialty footwear chain, R. Hannah and Co. Prior to this John held a number of marketing and market research positions with leading New Zealand companies.

John is also on the board of GS1 (New Zealand).

JOhN sucKlINg

John is the Owner/Operator of Sucklings Shoe Store, Christchurch. He is a second generation retailer, taking over the family business in 1977 after a career as an economist with the Department of Trade and Industry, NZIER and the Social Welfare Department in Wellington.

As a well respected ‘thinker’, he has a high profile in the industry in Christchurch and has served on the board of the New Zealand Retailers Association and the board (and now Advisory Committee) of the NZ Retail magazine. He gives Retail Institute South Island representation as well as a SME focus.


income statementFor the year ended 31 december 2011

Income 2011$000’s

2010$000’s

Government Grants 4,740 6,091

Industry Contribution 263 287

Moderation & Other Income 391 189

Investment Income 201 191

Total Income 5,595 6,758

expenditure 2011$000’s

2010$000’s

People Costs 3,089 3,610

Operating Costs 1,404 1,662

Training Costs 661 980

Depreciation 137 182

Total expenditure 5,291 6,434

Net surplus 304 324

statement oF movements in equityas at 31 december 2011

2011$000’s

2010$000’s

Net Equity Brought Forward 3,574 3,250

Add: Net Surplus 304 324

Net Equity Carried Forward 3,878 3,574

cash Flow statementFor the year ended 31 december 2011

2011$000’s

2010$000’s

Net Cash Flows from Operating Activities 644 462

Net Cash Flows from Investing Activities (190) (510)

Net Increase in cash held 454 (48)

Cash at the beginning of the year 1,990 2,038

Net cash carried forward 2,444 1,990

financial statements • 17

balance sheetas at 31 december 2011

asseTs

current assets 2011$000’s

2010$000’s

Cash & Cash Equivalents 20 140

Term Deposits 2,425 1,851

Marketable Securities 1,451 1,399

Accounts Receivable and Other Debtors 328 489

Total current assets 4,224 3,879

Non-current assets 2011$000’s

2010$000’s

Property, Plant & Equipment 529 553

Total Non-current assets 529 553

Total assets 4,753 4,432

lIabIlITIes

current liabilities 2011$000’s

2010$000’s

Accounts Payable 193 225

Other Creditors and Accruals 619 529

GST Payable 63 104

Total current liabilities 875 858

Net assets 3,878 3,574

equity 2011$000’s

2010$000’s

Retained Earnings Brought Forward 3,574 3,250

Add: Net Surplus 304 324

Total equity 3,878 3,574


For the year ended 31 December 2011

1. Retail Training New Zealand Inc (“Retail Institute”) is the industry training organisation for the retail and

wholesale (distribution) industries. The organisation is a registered charity by virtue of its educational

purposes.

2. Retail Institute is an incorporated society. These financial statements have been prepared in accordance

with the Incorporated Societies Act 1908 and New Zealand Generally Accepted Accounting Practice.

The functional and presentation currency for Retail Institute is in New Zealand Dollars, rounded to the

nearest thousand.

3. The summary financial statements have been extracted from the full financial statements. The financial

statements of Retail Institute including Statement of Financial Performance, Statement of Financial

Position, Statement of Movements in Equity and Statement of Cash Flows cannot provide a full

understanding due to their summary nature. This understanding can be obtained only by reference to

the annual financial statements of the Retail Institute.

4. A copy of the full financial statements may be obtained on request from the Retail Institute’s Wellington

Office (Telephone 0800 486 738), P O Box 24341, Wellington.

5. The annual full financial statement of Retail Training New Zealand Incorporated have been audited by

BDO Wellington who have issued an unqualified audit opinion in respect to the financial statements on

30 March 2012. BDO Wellington have audited these summary financial statements and found them to

be consistent with the Annual Financial Statements.

6. These summary financial statements are in compliance with FRS-39.

Approved on behalf of the Board:

Philip Shewell Date

Chairman

Retail tRaining new Zealand inc

summary notes to the financial statements

audit Report • 19

To the Readers of Retail Training New Zealand Inc.

The accompanying summary financial statements, which comprise the summary statement of financial

position as at 31 December 2011, the summary statement of financial performance, summary statement

of movements in equity, and summary statement of cash flows for the year then ended, and related notes,

are derived from the audited financial statements of Retail Training New Zealand Inc. for the year ended

31 December 2011. We expressed an unmodified audit opinion on those financial statements in our report

dated 30 March 2012.

The summary financial statements do not contain all the disclosures required for full financial statements

under generally accepted accounting practice in New Zealand. Reading the summary financial statements,

therefore, is not a substitute for reading the audited financial statements of Retail Training New Zealand Inc.

directors’ Responsibility for the summary financial statements

The directors are responsible for the preparation of a summary of the audited financial statements in

accordance with FRS·39: Summary Financial Reports (FRS 39).

auditor’s Responsibility

Our responsibility is to express an opinion on the summary financial statements based on our procedures,

which were conducted in accordance with International Standard on Auditing (New Zealand) (ISA (NZ))

810, “Engagements to Report on Summary Financial Statements.”

Other than in our capacity as auditor we have no relationship with, or interests in, Retail Training New

Zealand Inc.

Opinion

In our opinion, the summary financial statements derived from the audited financial statements of Retail

Training New Zealand Inc. for the year ended 31 December 2011 are consistent, in all material respects,

with those financial statements, in accordance with FRS 39.

bdO wellington

wellington

report of the independent auditor on the summary financial statements


address Level 2, CMC Building 89 Courtenay Place PO Box 24 341 Wellington New Zealand

Telephone 04 381 1880

facsimile 04 381 1899

email [email protected]

website www.retailinstitute.org.nz

directors Philip Shewell (Chairman) Trevor Douthett John Albertson Maxine Gay Trish McLean Mary Marshall John Suckling

chief executive Officer Desleigh Jameson

bankers ANZ Banking Group (New Zealand) Limited Lambton Quay Wellington

auditor BDO Spicers Wellington Chartered Accountants 99-105 Customhouse Quay Wellington

retail institute directory

0800 486 738Level 2, CMC Building89 Courtenay Place PO Box 24 341Wellington 6142

TEL 04 381 1880FAX 04 381 [email protected]

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Retail Institute Annual Report 2011

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