Walk into your local New World or Countdown and you might notice your weekly shop is hurting your wallet more than ever. Meanwhile, friends across the Tassie are posting TikToks showing $2 avocados and half-price specials that make eN-Zed shoppers quietly weep into their flat whites. So, what’s going on?
eN-Zedders consistently pay more for groceries than Ozzies despite living in a country that produces world-class food in abundance. Why?
It’s a simple matter of Economics…
The Duopoly Problem
In eN-Zed, two companies dominate the grocery market: Foodstuffs (New World, Pak’nSave, Four Square) and Woolworths NZ (Countdown, SuperValue, FreshChoice). Together, they control over 90% of the grocery retail market.
This lack of competition gives these companies enormous power to set prices, control supplier contracts, and influence what products reach shelves.
In contrast, Oz has more retail diversity. Coles and Woolworths are still dominant, but players like ALDI, Costco, and newer entrants like Amazon Fresh and IGA keep prices more competitive. Private-label goods are also more common and often cheaper across the ditch.
Geography, Logistics – and Isolation
Yes, eN-Zed is remote and has rugged terrain. But so does Oz. Still, Ozzie supermarkets benefit from economies of scale: bigger population equals more volume, which means cheaper distribution per unit. They also have more direct supply chains and a bigger pool of local and imported products to draw from.
Meanwhile, eN-Zed’s lower population and tight supply chains make it harder to introduce competition or pressure on wholesalers. That isolation inflates logistics costs, even for food grown here.
The Resource Management Act and Red Tape
Many people assume that complex environmental and land use rules under eN-Zed’s Resource Management Act (RMA) are pushing prices up.
There’s some truth to this; building new large-format stores can be slowed by zoning rules and community consultation, especially in urban areas.
But it’s important to clarify: consultation with Māori under the RMA is not the main barrier. In most cases, iwi are collaborative and supportive of commercial development, particularly when cultural sites or guardianship (kaitiakitanga) are respected.
The real delays come from planning complexity, local government bottlenecks, and urban land prices.
Why Don’t Foreign Supermarkets Enter eN-Zed?
Many eN-Zedders wonder why ALDI, Costco, or Lidl don’t just open stores here. The answer is a wee bit complicated.
Market size: NZ’s small population means smaller profit potential.
Tough competition: Breaking the existing duopoly would require deep pockets and patience.
Land acquisition: Between the Overseas Investment Act and local zoning rules, getting land for large retail stores is expensive and slow.
Supply chain control: Existing supermarkets already dominate warehousing, distribution, and even product sourcing.
In short: it’s not easy money, and the barriers to entry are high.
Shouldn’t We At Least Pay Less for eN-Zed grown Produce?
You’d think so, but local producers often get squeezed by supermarket purchasing power. Farmers sell at rock-bottom prices while markups in stores stay high. Meanwhile, supermarkets invest heavily inn loyalty schemes and promotions that mask true costs.
What’s Being Done?
In 2022, the Commerce Commission completed a major market study into supermarkets. It found that the duopoly was earning excess profits and that competition was not working well.
Some recommended changes included making it easier for new grocery retailers to access wholesale supply chains, requiring transparency in pricing and supplier contracts, and introducing a grocery code of conduct.
But meaningful structural change has been slow.
So, Will Prices Drop?
Don’t hold your breath.
While reforms are in motion, and a third supermarket chain (possibly government-supported) is being considered, real change will take years, not months. Until then, eN-Zed households will continue to pay more for basic groceries than their Ozzie cousins.
What Can We Do?
Supermarkets are seductive and they use strong techniques to ‘manipulate’ you into buying and spending more. Apply discipline and common sense when shopping and don’t buy unnecessary items.
Shop around: Local markets, fruit & veg stores, and ethnic supermarkets often beat big chains.
Buy in season: Imported out-of-season produce is where prices spike most.
Grow your own food and cook your own meals.
eN-Zed 