14 Sep 2021

Foodstuffs North Island takes action after critical Commerce Comission study

5:55 pm on 14 September 2021

The large supermarket chain, Foodstuffs North Island, is making changes in response to a market study by the Commerce Commission.

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File image. Photo: RNZ / Richard Tindiller

The commission recently found competition was not working well for consumers in the retail grocery sector, in a draft report published 26 July.

Foodstuffs North Island (FSNI), a New Zealand-owned co-operative, has 323 owner-operated stores, including the Four Square, New World, Pak'nSave and Gilmours brands.

Chief executive Chris Quin said the company would ensure its pricing was simplified and its loyalty programme clarified.

"As our submission makes clear, we accept the clear challenge to do better for New Zealand consumers and we and all of our stores are committed to making changes that improve outcomes for customers - meaningful change will happen faster as a result of this report."

It would also commit to a grocery code of conduct, and improve barriers to new entrants by beginning to remove restrictive land convenants and exclusivity provisions in leases.

"This is a substantial action plan that we believe will collectively drive better outcomes for customers and improve the competitive landscape," Quin said, adding FSNI did not agree with all of the commission's draft findings.

"In particular, the analysis on FSNI returns which is at the core of a number of the commission's draft recommendations is incomplete.

"Our calculations on profitability, drawing on independent analysis show that FSNI's average return on capital is less than half of what the commission has calculated it to be," he said.