Paddock to Pantry’s NZD 25 million expansion programme is set to create up to 1,000 jobs and bring more supermarket competition to underserved communities over the next five years.
As the business aims to become the country's third-largest grocery retailer, it has also called for a government-backed Supermarket Growth Fund to provide low-interest loans to privately owned grocery operators, arguing it would be a comparatively low-cost way to accelerate competition by helping existing independent operators expand more rapidly.
Paddock to Pantry, which recorded a 197 percent increase in sales over the past year, plans to open more than 20 new grocery stores at a rate of approximately one every three months, beginning with Kinloch, near Taupō, in December 2026, followed by new locations on the North Island’s East Coast and South Auckland in the first quarter of 2027.
The expansion would take its physical retail network from two stores in Karaka and Kahawai Point, Glenbrook, to more than 22 nationwide, while transforming the business from a predominantly online grocery operator into a national bricks-and-mortar supermarket chain.
E-commerce currently accounts for around 90 percent of the company's sales, but is expected to fall to approximately 33 percent within five years as its physical network grows.
The company will target communities underserved by existing supermarket competition, introducing the same competitive grocery promotional pricing across its stores regardless of location. This will help reduce geographic price disparities and put pressure on established supermarket operators in areas where consumers have limited choice.
The five-year investment programme includes about NZD ten million for new retail stores, a proposed 5,000sqm distribution centre, and an expansion of the company's delivery fleet to 25 vehicles.
John Kennerley, Paddock to Pantry business manager, mentioned that the strategy was focused on locations where limited supermarket choice has historically reduced competitive pressure on grocery prices, including both regional centres and metropolitan suburbs.
Paddock to Pantry's growth followed changes to wholesale grocery access arrangements, which enabled the company to establish the purchasing volumes needed to negotiate directly with major manufacturers. These supplier relationships and the scale of its existing online operation provide the foundation for its physical store expansion.
“We're not building a handful of speciality food stores. Our ambition is to become New Zealand's third-largest grocery retailer and provide a genuine alternative to the two dominant supermarket groups,” said Kennerley.
“We've demonstrated that we can compete online on price, range and service. The next stage is translating that into a physical network that brings those benefits directly into more communities.”
The retailer's established foodservice operations will also help support the expansion, allowing smaller stores to combine traditional grocery retailing with prepared food and other services suited to local demand.
Larger sites will operate more like conventional supermarkets, while smaller stores will have more flexibility to tailor their offerings to individual communities.
Kennerley added that improved road infrastructure between Auckland, Hamilton and Taupō has also made expansion more commercially viable by enabling more efficient distribution across wider geographic areas.
The company's proposed new 5,000sqm distribution centre will increase capacity beyond its existing infrastructure, servicing both its growing brick-and-mortar network and nationwide online grocery operation.
Further expansion mainly depends on securing premises, fitting out stores, and recruiting staff.
“The groundwork has already been done through the changes to supermarket competition settings. Those reforms have opened the door for independent operators like us to compete, and we've demonstrated that the model works,” said Kennerley.
“We've already done much of the heavy lifting. We have the distribution infrastructure in place, direct relationships with the major grocery manufacturers and a pricing model that allows us to compete. Suitable retail sites are available, and we've identified locations where we believe there's sufficient demand for another supermarket. “
He added that scaling largely depends on securing the capital to fit out stores, stock shelves, and employ local people, and that access to low-interest funding could make an immediate difference.
“We're not asking the Government to fund the creation of a new supermarket business. We're talking about helping established operators replicate a model that's already working,” he said.
Kennerley believed a Supermarket Growth Fund could let New Zealand's second-tier privately owned grocery competitors double or triple their expansion rates, bringing forward investment, employment, and pricing benefits that might otherwise take years to achieve.
He said the Government wouldn't need to build or operate supermarkets itself, but could instead provide commercially assessed, repayable loans to businesses with established operations and credible expansion plans.
Unlike the major supermarket groups, Kennerley highlighted that privately owned operators don't have access to the same financial resources, so they have to fund expansion gradually. With access to low-interest, repayable loans, he believed it could at least double the current rollout and potentially triple it, meaning more supermarkets opening and more jobs being created over the same period.
“We don't necessarily need another major overhaul of supermarket competition policy. The existing settings are starting to work, but it takes time for independent competitors to build scale.”
Rather than waiting for another international supermarket chain to enter New Zealand and build a national network from scratch, the Government could, for a relatively modest financial commitment, unlock substantially greater private investment, bring meaningful competition to underserved communities much sooner, and accelerate the growth of businesses already operating here.
“Every new supermarket represents local employment, investment in commercial property and additional demand for transport and distribution services, as well as greater choice for consumers,” he said.
“We believe New Zealand's next major source of supermarket competition can come from the privately owned operators already in the market. The opportunity now is to give those locally owned businesses the means to grow much faster.”
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