A Shift in the Supermarket Sector
Boy oh boy, did the supermarket sector look different in 2001. Auckland and Christchurch shoppers had eight different retailers on offer, while Hamilton and Dunedin had five. Price Chopper, 3 Guys, Foodtown, Write Price – even Big Fresh and its animatronic vegetables – are all but a distant memory.
Over the past 24 years, mergers and acquisitions between grocery giants have chipped away at the options. Now, just two players remain, dominating 90% of the market.
The Grocery Commissioner’s Warning
In his first annual report in 2024, the Grocery Commissioner confirmed that further and sustained intervention is required to drive competition and better consumer outcomes.
Nothing illustrates the poor outcomes consumers are experiencing better than supermarkets and their conduct around pricing. Big picture, we continue to pay way more for groceries than we should thanks to the supermarkets’ fat margins. At a customer level, the supermarkets’ consistent failure to display shelf prices correctly and their confusing and, in some cases, downright misleading discounting practices show they aren’t worried about annoying or deceiving their customers because they know those customers have nowhere else to go. Despite the Grocery Commissioner’s warnings to the supermarkets, Consumer NZ still receives frequent examples of dodgy supermarket pricing.
A Long Road Ahead
It’s hard to uncook a chicken. Fixing the grocery sector will take time. It will likely require a new player to enter and shake things up, as well as heavy regulatory oversight from the Commerce Commission and government.
In the meantime, consumers can fight for fairer prices by learning about these super-marketing strategies and becoming savvy shoppers.
Loyalty Cards: Don’t Always Mean Cheapest Prices
We think loyalty programmes are primarily designed to track your spending habits, not necessarily provide the best deals. A recent Consumer NZ investigation of a 22-item grocery basket found Pak’nSave was the cheapest – even without a loyalty programme. Instead of trading your (valuable!) data for small discounts, focus on buying only what you need and comparing prices across stores.
Specials: Might Not Be So Special
We regularly hear about dodgy pricing, with “specials” costing more than the usual price, misleading multibuys, and shelf prices that don’t match what’s charged at the till. The Grocery Commissioner estimates consumers are losing millions of dollars each year through such unfair practices. We recommend always carefully checking prices and receipts.
Home Brands: Might Not Be All They’re Cracked Up to Be
Our recent investigation found Pam’s Value Cream Style Corn contains just 40% sweet corn, while Watties’ has 80%! Always check the ingredients lists on budget items.
We’re also concerned that the increasing number of home-branded products might push out other suppliers and brands – reducing choice, quality, and competition. While the Grocery Commissioner is keeping an eye on home brands, be aware that choosing a bargain home brand today could limit future choices.
About Consumer NZ
Consumer NZ is an independent, non-profit organisation dedicated to championing and empowering consumers in Aotearoa. Consumer NZ has a reputation for being fair, impartial and providing comprehensive consumer information and advice.
Help fund more research, investigations, and campaign work like this. Join at consumer.org.nz.
SPONSORED
