The Commerce Commission has today published the second Annual Grocery Report, which monitors key measures of competition to present a macro-level view of New Zealand's grocery sector.
Grocery Commissioner Pierre van Heerden says this 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," Mr van Heerden says.
"Recent data shows retail prices increasing again in 2025, highlighting that prices were easing, there is more work to be done to improve competition.
"The major supermarkets have maintained their national market share of 82%, but we've 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.
"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 says.
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.
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 says.
"We're using all the tools available to us across the Commission to promote this change, but it's crucial we do it strategically and sustainably. These annual reports give us, and others, the information and transparency of the industry to make the decisions and changes that are necessary.
"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.
Background
The full report can be found here.
