Our grocery market
The state of competition in
New Zealand
Consumer groups have complained for years about the high price customers pay at the supermarket and the confusing, often misleading, pricing practices of our supermarket duopoly, Woolworths and Foodstuffs.
The Commerce Commission’s own supermarket study completed in 2022 found a concentrated market, high prices and unfair competition. Its key findings included that the intensity of competition between the major grocery retailers is muted and doesn't reflect workable competition. The study noted if competition were more effective, the major grocery retailers would face stronger pressures to deliver the right prices, quality and range to satisfy a diverse range of consumer preferences. And it said the profitability of the major grocery retailers appeared too high.
More recently, the OECD agreed. It found profits were too high for the supermarket owners, who then exerted pressure on suppliers and passed on the costs. It suggested regulators be given more power to force the duopoly to divest some shops to allow for more competition and better prices for Kiwis. We agree.
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The Commerce Commission is also inquiring into the pricing practices of Foodstuffs for incorrect and misleading shelf pricing.
The Grocery Action Group sees this situation as a social and economic emergency. It needs to be dealt with by our regulatory authority NOW - not a generation or two down the track.
Key Issues

Competition
In NZ we don’t have enough of it, that is why we are paying some of the highest prices in the world for food.
The Commerce Commission 2022 supermarket study found the grocery sector was highly concentrated and not working well for consumers or suppliers.

Supplier relationships
A significant imbalance of power means suppliers are scared to speak up about poor practices, for fear of being stripped off supermarket shelves. It also allows supermarkets to push costs on to suppliers; part of why Foodstuffs’ North and South Island merger was blocked.