Retail Success Story - New Zealand Regional Grocery Chain Retail Capex Investments.

A regional grocery chain in New Zealand operating 4 suburban locations was facing performance issues at one of its longest-running stores. One of the site had seen declining foot traffic and increasing maintenance costs. Management was evaluating whether to invest NZ$1.2 million in a major store refurbishment or divest and relocate to a newer, high-traffic retail precinct, requiring a NZ$2 million investment.‍ They engaged CapX Solutions to provide financial clarity and guide the retail CAPEX investments decision. The Challenge • The existing store was 15 years old and located in a residential area with ageing demographics. • A nearby commercial centre offered higher footfall and co-location with popular anchor tenants. • Refurbishing would improve layout and equipment but might not resolve customer attrition. • No clear financial framework existed to compare the long-term value of both options. What CapX Solutions Did‍

1. Developed a tailored DCF model‍ We built a 10-year discounted cash flow model for both the refurbishment and relocation options, incorporating: • Revenue projections by category (fresh, dry, FMCG) • Operating cost differentials (labour, utilities, rent) • CAPEX spend, equipment lifespans, depreciation • Lease terms and escalation clauses • Make-good obligations 2. Ran IRR and payback analysis CapX Solutions worked closely with the client’s finance and operations teams to map out the long-term financial implications of both options. We identified key cost drivers, revenue levers, and operational trade-offs, and translated these into a clear value narrative. This helped the client understand not just which option performed better on paper, but why—and how each aligned with their strategic goals. 3. Conducted scenario testing • Sales sensitivities (e.g. +10% from improved co-tenancy footfall) • Rental increases post-lock-in • Cost savings from newer, energy-efficient equipment 4. Delivered a strategic investment case • Executive summary with clear side-by-side comparison • Visual charts highlighting NPV and breakeven scenarios • Recommendation aligned to company’s growth strategy The Result‍ ✅ The retailer proceeded with relocation, supported by stronger long-term returns and customer growth potential. ✅ CapX’s model showed the relocation’s higher upfront cost was offset by stronger margin and customer uplift. ✅ 8 months post-opening, the new store saw a 17% increase in basket size and 9% uplift in foot traffic. ✅ The retailer has since engaged CapX Solutions to review others locations in its network. Services Provided • 📊 DCF Modelling & ROI Analysis • 🔍 Scenario & Sensitivity Testing • 📄 Investment Case Consultation • 🧠 Capital Planning Strategy