Discount supermarket chain canvassing launch in Aotearoa

By Will Trafford

Aotearoa could soon welcome a third major supermarket chain as the government cracks down on the sector, dominated by Countdown owner Woolworths NZ and Pak'nSave and New World owner Foodstuffs.

Finance Minister Grant Robertson told RNZ this morning there are a number of interested players canvassing the New Zealand market, including German budget grocery chain Aldi.

"Aldi is one of the players but I am not going to announce things to people today." Robertson told RNZ this morning.

"We've got interest from a number of other players.”

Robertson said people could look across the ditch to get an idea of other chains also looking into launching in New Zealand.

New legislation will force Woolworths and Foodstuffs to provide third-party supermarkets access to their wholesale supply chains, with a regulator to oversee fair pricing, Robertson said.

Two weeks ago the government introduced legislation to prevent supermarkets from landbanking properties and putting covenants on them to prevent other chains from opening in the same area.

The latest moves come amid soaring grocery inflation of close to 10 per cent for foods including meat, poultry, kaimoana and fresh fruit and veggies; and on the back of a March report from the commerce commission which found the grocery sector is not working well for New Zealand consumers.

“We have found that the intensity of competition between the major grocery retailers who dominate the market, Woolworths NZ and Foodstuffs, is muted and competitors wanting to enter or expand face significant challenges,” Commerce Commission Chair Anna Rawlings said at the time.

Aldi opened its doors in Australia in 2001, and has helped to drive down prices but after more than 20 years it still remains only the country's third-largest player, battling Countdown NZ’s owner Woolworths at number one, and Coles Group at number two.

If Aldi were to launch in New Zealand, it would join American giant Costco which is scheduled to open its first store in Auckland's Westgate in August or September.

The Warehouse Group says it’s also "seriously considering" its grocery options after the country's duopoly came under fire in the Commerce Commission report, and an Iwi-consortium led by 2Degrees founder Tex Edwards is also canvassing a move into the grocery market.

Meanwhile, an online-only supermarket in Auckland, Supie, has built a subscriber base to 20,000 within a year.