The New Zealand Commerce Commission has published its second Annual Grocery Report, which monitors key measures of competition to present a macro-level view of the country’s grocery sector.

Grocery Commissioner Pierre van Heerden says the latest report shows there is some progress, but many of the issues already identified continue to stifle significant improvement in competition. 

“In 2024 retail grocery prices appeared to have stabilised after years of significant growth, which was reflected in a slowing of the major supermarket’s gross margin growth, however, grocery prices remain higher than the OECD average,” he said.

“Recent data shows retail prices increasing again in 2025, highlighting that prices were easing, there is more work to be done to improve competition.”

Market share

The report found the major supermarkets have maintained their national market share of 82%, but the Comission has seen movement within this. Pak’nSave has increased its market share while Woolworths has had a continued decline in market share over the past five years, says Mr van Heerden.

“When we dig deeper, we can see geographical differences in the supermarkets’ dominance. Consumers in Auckland and other main cities have a range of options, but consumers in smaller towns and rural areas typically have minimal to no choice within their locality, with some stores in small towns functioning as a localised monopoly,” Mr van Heerden said.

In Auckland the major supermarkets hold 71% of the market compared to 88% in the rest of New Zealand. 90% of Kiwis are within a 10 minute drive from one of the major supermarkets. The top of the South Island, West Coast, Otago, Waikato, and Taranaki are regions where the major grocery retailers continued to have the most dominance.

The report shows that barriers to entry for new competitors remain, particularly the time and cost associated with complying with Overseas Investment Act and the Resource Management Act. 

Power imbalance

The report also reinforces that the major supermarkets continue to wield their power over smaller suppliers, and the wholesale market is not supportive of new entrants to compete against the major supermarkets.  

“I know there is appetite for change, and it can’t come quick enough for Kiwis who are feeling the pinch at the checkout. Change in an industry this large and entrenched will take time and deliberate, co-ordinated effort,” Mr van Heerden said.

“The best value the Commission can provide within its current powers is to continue our work to address the supplier and retailer power imbalance, support a more effective wholesale market, enforce compliance with consumer and competition law, and shine a light on the industry,” Mr van Heerden says.

Foodstuffs North Island reinforces commitment to value, fairness and reform

Foodstuffs North Island (FSNI) – the local family-owned grocer co-op behind New World, PAK’nSAVE and Four Square stores – says it is making solid progress across key areas of regulatory reform while continuing to deliver value, service and innovation for customers across the North Island.

Commenting on the report, CEO Chris Quin said FSNI backs the intent of the still relatively new regulatory framework, to drive competition, efficiency and better outcomes for New Zealand consumers.

“We’ve taken that responsibility seriously from day one and have put in place a broad programme of work to meet our obligations and make the system work well for customers, suppliers and retailers alike.

“Much of this work has been underway for some time, and it’s being delivered alongside our day-to-day focus on serving millions of customers a week, investing in new stores and technology, and keeping our supply chain efficient and resilient.” 

Mr Quin says FSNI is pleased the Commission has recognised that competition is strongest where demand and population support it, and that concerns about land holdings are not borne out by the evidence. 

“We’re focused on opening new stores and providing new jobs in small, remote and growing communities where the need is clear – that’s a priority for us and our owner-operators. The joint investment by family grocers, that underpins the co-op model, enables us to be in many small communities.”