Supermarket competition not working well – commission report
Te Whanganui-a-Tara - The Commerce Commission says that competition is not working well for consumers in the retail grocery sector (supermarkets.
It recommends a suite of changes to increase competition and help improve the price, quality and range of groceries and services available to New Zealanders.
In November 2020, the government asked the Commerce Commission to carry out a study into whether competition in the grocery sector is working well, and if not, what can be done to improve it.
As part of the study the commission looked at a range of things including: how retailers deal with their suppliers such as manufacturers, producers, farmers and growers; competition at the supplier level of the grocery market; who consumers buy groceries from and who supplies those retailers; competition between retailers when selling groceries to consumers; and what retailers charge consumers for groceries and how they decide on their prices, as well as the associated levels of service, product ranges and quality of groceries.
The commission has engaged with and gathered information from a wide range of stakeholders, including retailers, suppliers and consumers.
Information relating to the study, including the draft report, external reports we commissioned for the study, submissions, and transcripts from our consultation conference, are publicly available.
The price and quality of groceries have an impact on all of New Zealanders. Groceries are a major expense for households, with more than $22 billion spent at New Zealand supermarkets and grocery stores annually.
New Zealand has one of the most concentrated retail grocery sectors in the world. If retail competition is working, our study would expect to see grocery retailers competing to win customers based on factors such as price, quality, choice, and service.
The commission study has provided an opportunity to consider whether competition in the sector is working for the benefit of New Zealand consumers, and if not, how it could be improved.
Lisa was born in Auckland at the start of the 1970s, living in a small campsite community on the North Shore called Browns Bay. She spent a significant part of her life with her grandparents, often hanging out at the beaches. Lisa has many happy memories from those days at Browns Bay beach, where fish were plentiful on the point and the ocean was rich in seaweed. She played in the water for hours, going home totally “sun-kissed.” “An adorable time to grow up,” Lisa tells me.
Lisa enjoyed many sports; she was a keen tennis player and netballer, playing in the top teams for her age right up until the family moved to Wellington. Lisa was fifteen years old, which unfortunately marked the end of her sporting career. Local teams were well established in Wellington, and her attention was drawn elsewhere.