Moving to a new future in New Zealand chain supermarket retailing
New Zealand's grocery prices have become a political issue that no government can ignore. Since the Commerce Commission's 2022 market study found the sector was not workably competitive, both Labour and National-led governments have tried to fix it. They have passed the Grocery Industry Competition Act, appointed a Grocery Commissioner, blocked the proposed Foodstuffs merger and courted overseas entrants. Breaking up the duopoly is now openly discussed, on both sides of the Tasman.
The Ministry of Business, Innovation & Employment (MBIE) commissioned Coriolis to help it advise ministers on restructuring the grocery sector to improve competition. That included a rigorous evaluation of three demerger options for Foodstuffs and Woolworths.
MBIE has since released the five reports under the Official Information Act, with some redactions. Together they run to more than 580 pages.
Preliminary Discussion Slides for Minister Willis
These are work-in-progress slides prepared for a meeting with Minister Nicola Willis. They set out the Coriolis proposed answer on one page, a four-part plan: stop causing inflation, remove structural causes, back alternative formats such as a hard discounter, and decide whether to move the duopoly to three or four groups. Early versions of the demerger and market share cap options are included.
Apr 2025
The Path Forward: Theory & Practice
This is the main report. It asks the hard questions: what is a supermarket, how do supermarkets compete, and why isn't there more competition? Its answer is that there are no easy fixes. Splitting the chains alone would cut prices by about one cent in the dollar. Attracting a limited-assortment discounter like Aldi is the standout opportunity. New Zealand's two-group market is also benchmarked against global peers.
Sept 2025
The Situation Outside the Duopoly
This report maps the 254 non-duopoly supermarkets: independents, Indian and East/Southeast Asian chains, and gourmet and organic stores. Together they turn over about $2.3b. It also sizes the wider $34.3b FMCG ecosystem, including convenience, closeout and specialist retail. The conclusion is that these players add real niche value but lack the scale, range overlap or positioning to discipline the duopoly.
Sept 2025
Costco and the New Zealand Market Opportunity
This report profiles Costco, the US$254b global wholesale club operator that has now opened in New Zealand. It covers how the format works: membership fees, a limited range of about 4,000 items, bulk packs and a no-frills, low-cost model. It also explains why, unlike other discount formats, Costco attracts high-income shoppers. The New Zealand assessment is withheld from the public release.
Jul 2025
Three Demerger Options
This report evaluates three structural reform options in detail: a Foodstuffs-only split into New World and Pak'nSave; a full split of both groups, creating a Woolworths spin-off "Newco"; and a 27.5% market share cap, with excess stores going to a new entrant. For each option it models store-level impacts, consumer price effects (an estimated 0.5% to 1%), timeframes, execution and legal risk.
Sept 2025