Warehouse Keen to Compete with Supermarket Chains

The Warehouse Group has announced it would be "very happy" to fully compete with the big two grocery chains that dominate the New Zealand market, providing measures are put in place to ensure a level playing field.

The Commerce Commission's review of the sector stopped short of a radical shake-up of the sector, despite finding market competition between Woolworths and Foodstuffs was not working well for New Zealanders.

“We're very interested to see where that whole investigation finally lands and we want to be there for Kiwis, and we want to be able to bring down the cost of groceries," The Warehouse Group chief executive Nick Grayston said.

“And so if we can play a part in that will be very happy to.”

The Warehouse currently offered a limited supply of dry goods and other pantry items, but its attempt to fully compete with the big supermarket chains in 2006 failed to achieve the scale required.

"It does depend on where the whole thing lands," Grayston said adding the commission had pulled back from an initial report, which contemplated a potential breakup of the sector.

Grayston said any new entrants would need access to competitive cost prices to enable them to take smaller margins as they scaled up to size.

"Which is something that we've had to do to make sure that the customer is not exploited and that they're offered a fair price.”

The government was reviewing the commission's grocery report and would decide what reforms should be made.

First published on RNZ and republished with permission.