Government to Fast-Track New Supermarkets to Boost Grocery Competition

The New Zealand Government is introducing new legislative and policy changes to fast-track supermarket development, aiming to increase competition in the grocery sector and ease cost-of-living pressures. Economic Growth Minister Nicola Willis announced the reforms following a feedback process involving both current market players and prospective entrants.
The government plans to introduce legislation in November that will make new supermarket developments eligible for fast-track approval, provided they improve competition. The current regulatory framework—criticised for being slow, costly, and overly complex—will be amended so that the impact on grocery competition becomes a key consideration for decision-makers. According to Willis, this is part of a broader effort to “create an express lane for new supermarkets to boost competition and deliver better deals for Kiwi shoppers.”
Under the planned changes, a single consenting authority will be designated to handle supermarket development applications, helping to standardise and streamline the process. Additionally, the Building Act will be updated to allow for easier use of pre-approved MultiProof standardised designs, reducing the time and expense associated with new builds. Currently, large supermarket chains like Woolworths report it can take up to four years and cost around $3 million just to obtain resource consent for a single store. The reforms aim to reduce that timeline to under a year.
These measures follow a Cabinet-issued Request for Information (RFI) earlier this year, which received 24 responses from existing companies, potential new entrants, advocacy groups, and other stakeholders. The feedback highlighted widespread frustration with existing zoning restrictions and regulatory hurdles that have made it difficult for new competitors to enter the market. Five new domestic players expressed interest in expanding, and existing retailers signalled credible growth plans. However, major European retailers Aldi and Lidl did not participate in the RFI process—something Willis described as “disappointing,” though she remains hopeful the reforms will encourage them to reconsider entering the New Zealand market.
Costco, which currently operates a single store in Auckland, confirmed that the fast-track consenting process would help facilitate its expansion in New Zealand. According to Willis, Costco sees potential for additional stores in the coming years.
The government is also looking at broader regulatory changes. Cabinet will soon consider strengthening enforcement and penalties under the Fair-Trading Act, while the Commerce Commission is working on stronger protections for suppliers through the Grocery Supply Code.
Although some feedback suggested that breaking up the existing supermarket duopoly—dominated by Foodstuffs and Woolworths—would be the most effective way to enhance competition, Willis said such a step would require careful analysis. A cost-benefit assessment is currently underway to evaluate potential restructuring options.
These reforms come amid growing public concern over the rising cost of living. Food prices in New Zealand are roughly 3% higher than the OECD average, and higher than those in Australia or the UK. Willis stressed that increasing supermarket competition is a key step toward reducing prices for consumers and creating a fairer, more dynamic grocery sector.-TIN Bureau