Warehouse mulls plan to sell more groceries

The Warehouse is “seriously considering” its grocery options after the country’s two big supermarket chains came under fire for their pricing behaviour.

The discount retail chain already offers a limited range of grocery items.

“While the cost of goods continues to increase, we’re holding or dropping prices where we can across essential grocery and pantry items like bread, milk, cereal and pasta as well as essentials to keep families warm such as children’s flannelette pyjamas and merino clothing,” chief executive Nick Grayston said.

“Kiwi families tell us that they’re not getting good value from supermarkets and they want to have more grocery options available at The Warehouse.

“It’s something we’re seriously considering and we’re watching with interest to see what steps the Government will take to make a difference to New Zealanders and allow other players like us to enter the grocery market in a bigger way.”

The big supermarket chains came under fire in the wake of a Commerce Commission report on the retail grocery sector, which recommended a suite of changes to increase competition.

Commission chair Anna Rawlings said in the report — released in March — that competition in the grocery sector “is not working well for New Zealand consumers”.

“We have found that the intensity of competition between the major grocery retailers who dominate the market, Woolworths NZ and Foodstuffs, is muted and competitors wanting to enter or expand face significant challenges,” Rawlings said.

In recent days Woolworths and Foodstuffs have outlined measures to try to offset the impact that very high inflation is having on their customers.

The Warehouse, in a business update, said its third quarter was a mixture of Covid-affected earnings, increased online and grocery sales, along with improved margins.

It said group sales for the 13 weeks to May 1 were $771.6 million, down 2.5 per cent compared to the third quarter of 2021, but up 31.6 per cent on Q3 2020.